RISKS

Complex projects are always fraught with a variety of risks

Must manage the risks without allowing them to ruin the
project
Risks identification, evaluation and formulating risk
response strategies are the main steps of managing the
risks
Risks can be categorized based on their nature.
51 risks identified for Emerald Tower project

Categorization of
identified risks

Identified risks
Construction risks
Defective Construction procedure
Adverse weather conditions

Financial risks
Funding
Cash flow problems

Performance risks
Labour disputes
Productivity

Security risks
Vandalism
corruption

Contractual and legal risks

Delayed payments
Insolvency of the contractor or subcontractor

Identified risks
Physical risks
Natural catastrophes
Land acquisition

Political risks
Pressure from politicians
Changing rules and regulations

Design process risks

Wrong selection of materials
Frequent changes of the design

Environmental risks
Pollution and ecological changes
Changes in environmental changes

Organisational risks
Consultant or Contractor delays
Poor definition on project requirements

Analysis of risks
Risks can be analysed by a risk matrix based on their
likelihood and impact

Likelihood
Almost

Insignificant

Minor
16

certain
Likely
Possible

49

15
3,5

Impact
Moderate
1

Major
11

30
21
4,7,9,14,25,26 12,13,20,42,48

Severe

28
50

,31,39,40,41,4
Unlikely
Rare

6,10,32

647
2,8,17,18,19,2

27,34,43,44

29,23

4,33,35,38,45,
36,37

22

51

Risk treatments
Avoiding Risk- Not proceeding with the activity
which is likely to generate the risk, if it is
practicable.
Transferring Risk The risk is transferred to a
third party who can handle it with more concern
and expertise.
Mitigating Risk This will eliminate the risk or
reduce the impact or likelihood of the risk by
taking appropriate steps prior to the occurrence of
adverse effects of the risk.
Accepting Risk such risks are consciously
accepted and their adverse consequences are also
dealt when they are occurred.

Risk treatments for extreme risks

Code
11

Risk

Risk treatments already

Alternative risk treatment

taken

suggestions
Mitigating risk

Mitigating risk

Adverse impacts from the

environment or weather
condition

Construction program is scheduled Boost the construction progress in

by

considering

the

weather good

environment

patterns of the area for last few conditions,

years to avoid outdoor activities in weather

when

signs

are

or

weather

future
apparent

bad
in

order to minimise future costs and

rainy days.

effort on claims

28

Natural catastrophes

Transferring risk
The risk is transferred by insurance
policies.

50

Health and safety

Transferring and

hazards

mitigating risks

Avoiding certain hazards

Very

risky

activities

can

be

All the workers in the site and staff prevented or they can be replaced
members of Contractor are insured by safer steps or they can be done
for

health

and

Further, all possible

safety

measures

hazards. by the employment of experts for

health and those activities.

safety
are

taken

to

mitigate the risks. As an example,

safety wearing like helmets, boots
and jackets are mandatory for all

Risk treatments for high risks

Code

Risk

Risk treatments already

Alternative risk treatment

16

Changes in the scope of

taken
Accepting the risk

suggestions
Mitigating the risk

work ( variations / extra

work)

Developer

has

not

taken

any By

establishing

proper

special measure to avoid, transfer procedure to identify the need of

or mitigate the risk. When there is the
a need for a change or alteration most

developer
of

that has been carried out in almost avoided

all the incidents.

and

contractor,

the

changes

or

mitigated.

potential

changes

can
can

be

Such
be

identified well in advance and by

that
01

Inflation

Accepting the risk

Mitigating the risk

Developer has not been keen on Developer can mitigate certain

formulating

any

response

or elements

proactivity to face the adverse agreements

consequences of inflation.
30

Pressures from the

politicians or political
parties and interferences

Mitigating the risk

Construction is done by getting all
the approvals from the statutory
bodies and the houses are sold out
before the completion in order to
mitigate the influences by the
politicians to acquire houses for a

by
like

going

into

hedging

and

purchase agreements.
-

Residual risks
The risks which remain after risk treatments
Once, the risks are treated, project team will not be able
to completely eliminate all the risks, because it is simply
not possible

Risk of natural catastrophes

Health and safety hazards
Pollution and harm to the
environment