Managing risks in construction projects has been recognized as a very important management process in order to achieve the project objectives in terms of time, cost,quality, safety and environmental sustainability. There are main five listed Risks:
1. Cost related risks:
Tight project schedule
Design variations
Variations by the client
Unsuitable construction program planning
Occurrence of dispute
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2. Time related risks:
Tight project schedule
Design variations
Excessive approval procedures in
administrative government departments
Variations by the client
Incomplete approval and other
documents
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3. Quality related risks:
Tight project schedule
Inadequate program scheduling
Unsuitable construction program planning
Incomplete or inaccurate cost estimate
Low management competency of
subcontractors
Price inflation of construction materials
Excessive approval procedures in
administrative government departments
Incomplete approval and other
documents
Incomplete or inaccurate cost estimate
Unsuitable construction program planning
Inadequate program scheduling
Bureaucracy of government
High performance or quality expectations
Variations of construction program s
High performance or quality expectations
Variations of construction programs
Unavailability of sufficient amount of
skilled labour
Design variations
Lack of coordination between project participants
4. Environment related risks:
Tight project schedule
Variations of construction programs
Unavailability of sufficient professionals
and managers
Excessive approval procedures in
administrative government departments
Variations by the client
Inadequate or insufficient site information
(soil test and survey report)
Low management competency of
subcontractors
High performance or quality expectations
Inadequate program scheduling
Serious noise pollution caused by
construction
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5. Safety related risks:
Tight project schedule
Low management competency of
subcontractors
General safety accident occurrence
High performance or quality expectations
Unavailability of sufficient amount of
skilled labour
Unavailability of sufficient professionals
and managers
Mitigation of Risks:
Unsuitable construction program planning
Variations of construction programs
Design variations
Lack of coordination between project
participants
Among the economic risks associated with any construction project, payment risk
looms large. Money is the lifeblood of construction, and the withholding of payment can doom a project to failure.
1. Recognize the construction contract as the bed-rock of risk management
2. The insurance and the contract need to be coordinated
3. Don’t pay for coverage you don’t need.
4. Beware potential traps in waivers of subrogation
5. Insurance wraps are a way of life, but still poorly understood.
6. Insurance and contract need to be coordinated
7. Reading friendly policy.
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