MITIGATING RISK

The research article "Implementation of Risk Management in Malaysian Construction Industry:

Case Studies" explores how construction projects in Malaysia deal with risks. It finds that many
companies don't have formal ways of managing risks, which leads to problems like projects
taking longer and costing more than planned. The study aims to understand how risks are
managed in these projects and how it affects project time and cost. Data was collected from
interviews in Kuala Lumpur.
The article points out the importance of having organized risk management practices in
construction. It helps in spotting, analyzing, and dealing with risks effectively. Risk management
is seen as a proactive way of making decisions to minimize risks and handle them well.
Managing risks is crucial for finishing projects within set limits of cost, time, quality, safety, and
the environment. The study identifies three main steps in risk management: spotting risks,
analyzing them, and responding to them.
It's noted that risk management isn't widely used in Malaysian construction. This is because
many workers aren't familiar with available methods. The research emphasizes the need to
manage risks throughout the project and involve everyone in this process. The article also talks
about the challenges the construction industry faces, like delays, going over budget, and lower
quality, all because of project risks.
In this case study, a government project aimed at constructing academic blocks and hostels for
Universiti Pertahanan Nasional Malaysia in Kuala Lumpur implemented risk management
processes effectively. The project manager utilized a workshop approach to identify and analyze
risks at the planning stage. Risks were identified for each phase of the project life cycle,
analyzed to determine causes and mitigation strategies, and prioritized based on their potential
impact. The project team focused on major risks with higher probabilities and impacts,
monitoring and tracking them throughout the project. By using a Risk Management Plan (RMP),
all risks were reduced to acceptable levels and managed efficiently. The RMP provided a
structured methodology for managing risks transparently and effectively, ensuring that risks
were controlled and mitigated to maintain project cost, schedule, and resource utilization within
acceptable limits. Regular monitoring using the RMP during site meetings, quarterly status
reports, and a final risk report at the project's conclusion facilitated proactive risk management
AVOIDING RISK

CASE STUDY TITLE: Supply Chain Strategy in Philippine Construction Industry: A

Case Study of Joint Risk Management Approach during the COVID-19 Pandemic
AUTHORS: Dante Silva 1, Aaliyah Maliuanag 1, Chanen Miranda 1, and Camil Mojedo
2

The paper explores how the construction industry deals with risks, especially during
COVID-19. It suggests a plan to handle these risks better by working together. They
looked at two construction companies to see how the pandemic affected them. Their
plan involves having meetings to talk about risks at different times during a project.
They stress the importance of talking openly and clearly to handle any problems in the
supply chain. The goal is to give people involved in construction projects a way to find
and deal with risks effectively.

In the context provided, a risk scenario could be the delay in the delivery of raw
materials due to disruptions in the supply chain caused by the COVID-19 pandemic. To
avoid this risk, the construction company XYZ Corporation adapted by implementing
effective planning, scheduling, time management, and good communication with each
project stakeholder. By proactively managing these aspects, XYZ Corporation was able
to mitigate the risk of delays in the supply chain and ensure the timely execution of their
projects. This approach helped them navigate the challenges posed by the pandemic
and maintain operational efficiency.
TRANSFERRING OF RISK
CASE STUDY TITLE: A RISK ASSESSMENT MODEL FOR HIGH-RISE SCHOOL
BUILDING PROJECT IN METRO MANILA, PHILIPPINES

AUTHOR: *Michael V. Almeida1 and Andres Winston C. Oreta2

The paper talks about the difficulties in assessing risks for school construction projects,
stressing the need to identify and understand different risks to avoid financial losses. It
points out the absence of formal risk management systems and suggests better risk
assessment methods are necessary. The study suggests a tool that combines Analytic
Network Process and Monte Carlo Simulation, which assigns weights to different factors
and simulates potential outcomes. This tool aims to offer a structured way to handle
uncertainties and subjective judgments in decision-making by merging qualitative and
quantitative approaches. The paper also looks at previous research, categorizes risk
factors, and explains how they plan to create the risk assessment framework.

One risk scenario mentioned in the text is the "Financial risk factor (F1)" in a high-rise
school building construction project. This risk factor has a probability of occurrence of
16.46% and a level of riskiness classified as HIGH. The possible impact of this risk
factor on the construction cost is estimated to be 10%, translating to a risk value of
1.65% amounting to PhP 4.95M. Transferring of risk in this scenario could involve the
project owner purchasing insurance to cover the potential financial losses associated
with this risk factor. By transferring this risk to an insurance company, the project owner
can mitigate the impact of the risk on their finances. In this way, the financial burden of
the potential loss due to the risk factor is shifted from the project owner to the insurance
provider. This transfer of risk through insurance is a common strategy used in
construction projects to protect against unforeseen events that could impact the
project's budget.

SHARING RISK

Miura, Hiroyuki & Midorikawa, Saburoh & Fujimoto, Kazuo & Pacheco, Benito &
Yamanaka, Hiroaki. (2008). Earthquake damage estimation in Metro Manila, Philippines
based on seismic performance of buildings evaluated by local experts’ judgments. Soil
Dynamics and Earthquake Engineering - SOIL DYNAM EARTHQUAKE ENG. 28. 764-
777. 10.1016/j.soildyn.2007.10.011.
The paper talks about how they assessed earthquake risks in Marikina City, Philippines,
using a two-step process. First, they looked at how a 7.0 magnitude earthquake would
affect regular buildings. Then, they evaluated important structures using the GESI
method to see how vulnerable they were to earthquakes. They compared the GESI
method with Japanese methods to see where they were similar or different. The study
predicted about 1900 casualties in the city using the GESI method. They also went out
into the field to check how well structures like the city hall, hospitals, schools, and
bridges could withstand earthquakes. They showed vulnerability curves in the GESI
method, which detailed different levels of damage from total collapse to minor damage.
The paper stressed the importance of involving stakeholders and considering
community needs when creating a seismic risk assessment plan.

In the context provided, a risk scenario could be the potential impact of a 7.0 magnitude
near-field earthquake disaster in Marikina City, Philippines, due to the West Valley Fault
system. Sharing risk in this scenario could involve the community, local authorities, and
stakeholders coming together to participate in a participatory seismic risk assessment
process. By sharing risk, the community members and stakeholders can collectively
identify vulnerable structures, assess the damage state of each structure, and work
towards developing disaster reduction goals and objectives. This collaborative approach
allows for the distribution of responsibility and resources among various parties to
mitigate the potential risks associated with the earthquake disaster.

RETAINING RISK
Safety Risk and its Impact to the Risk Management System in the Construction Industry at National
Capital Region Philippines

Jhonmonawel C. Joble1 Jesus P. Briones2

The paper looks into how construction companies manage risks, especially concerning
safety. They collected data from 118 people working in construction through
questionnaires. Most respondents were male, aged between 31-40, and held
supervisory roles with 4-9 years of experience. Many companies were working on
private projects, mainly building commercial properties. The study stressed the
importance of safety plans and evacuation procedures on construction sites. It also
suggested extra safety measures like regular training sessions, safety seminars, and
rewarding workers who prioritize safety. The conclusion emphasized that following
safety protocols is vital for reducing risks on construction sites. It recommended creating
detailed risk management plans, attending safety seminars to stay updated, and strictly
following safety regulations to ensure a safe workplace.

In the context provided, a risk scenario could be the possibility of a safety incident
occurring at a construction site due to inadequate safety protocols. Retaining risk in this
scenario would involve the construction company accepting the potential consequences
of the safety incident without transferring or mitigating the risk through insurance or
other means. To apply retaining risk in this scenario, the construction company would
acknowledge the possibility of safety incidents and their associated costs, such as
medical expenses, legal fees, and potential project delays. Instead of purchasing
insurance or implementing additional safety measures to mitigate the risk, the company
would decide to retain the risk and handle any incidents that may occur internally. By
retaining the risk, the construction company takes full responsibility for any safety
incidents that may happen on the job site. This approach could be chosen if the
company believes that the cost of transferring or mitigating the risk outweighs the
potential costs of dealing with a safety incident if it occurs. It's important to note that
retaining risk should be a conscious decision made after a thorough risk assessment
and consideration of the company's risk tolerance and financial capabilities.