Presentaion about Risk Management

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RISK ASSESSMENT AND MANAGEMENT IN CONSTRUCTION PROJECTS :

RISK ASSESSMENT AND MANAGEMENT IN CONSTRUCTION PROJECTS Group Members Muhammad Ali Naseem 13002151002 Rizwan Khurram 12001151003 Shammas Mashaddi 12001151005 Asad Khan 12001151015 Aquif Nawaz 12001151019 Resource Person Wajih Nadeem Qamar

INTRODUCTION:

INTRODUCTION Project risk management is the processes concerned with identifying, analyzing, and responding to project risk. Risk is exposure to the consequences of uncertainty.

RISK ASSESSMENT:

RISK ASSESSMENT Risk assessment is defined as a technique that aims to identify and estimate risks to personnel and property impacted upon by a project. Construction involves many variables, and it is often difficult to determine causality, dependence and correlations. As a result, subjective analytical methods that rely on historical information and the experiences of individuals and companies have been used to assess the impact of construction risk and uncertainty.

The four major processes of project risk management:

The four major processes of project risk management Risk Identification Determining which risks are likely to affect the project and documenting the characteristics of each. Risk Quantification Evaluating risks and risk interactions to assess the range of possible project outcomes. Risk Response Development Defining enhancement steps for opportunities and responses to threats. Risk Response Control Responding to changes in risk over the course of the project.

General Sources of risk in construction projects :

General Sources of risk in construction projects Misunderstanding of contract terms and conditions Design changes and errors Poorly coordinated work Unskilled staff Poorly defined roles and responsibilities Natural hazards Political and legal problem

OBJECTIVE :

OBJECTIVE Infrastructure projects being huge in nature and involving a large amount of money, any sort of wastage (either time, resources etc) would lead to huge monetary losses. The losses are due to various risks associated with such mega projects. Research on risk assessment and management has been done by various people, mostly on developed countries.

PowerPoint Presentation:

The scope of this work is limited to the construction of large building projects like IT parks, Multiplexes, Malls, Large residential complex etc.

METHODOLOGY :

METHODOLOGY Study of literature related to Risk Analysis and Risk Management capabilities. Site visit to major construction project sites. Questionnaire survey and personnel interviews with in-charges and managers and collection of data from site. Qualitative analysis of data obtained from site and to identify the root cause. Remedial measures to be suggested and the present data to be recorded for future reference. Conclusions, recommendations and suggestions for future study.

Types of risk :

Types of risk Bankruptcy of project partner Loss due to fluctuation of inflation rate Loss due to fluctuation of interest rate Loss due to fluctuation of exchange rate Loss due to rise in fuel prices Changes in Bank formalities and regulations Financial risk

Legal risk:

Legal risk Breach of contract by project partner Lack of enforcement of legal judgment Improper verification of contract documents Uncertainty and unfairness of court justice

Management risk:

Management risk Change of Top management No past experience in similar projects Improper project feasibility study Improper project planning and budgeting Poor relation and disputes with partner Poor communication between clients Internal management problems Team work Time constraint

Policy and political risk:

Policy and political risk Cost increase due to changes of Govt policies Loss incurred due to corruption and bribery Loss incurred due to political changes Loss due to bureaucracy for late approvals

Technical risk:

Technical risk Design changes Equipment failure Errors in design drawings High degree of difficulty in construction Accidents on site Materials shortage Architect Vs Structural Engineer dispute Shortage of skilful workers

Environmental risk:

Environmental risk Any adverse impact on project due to climatic conditions Any impact on the environment due to the project

Conclusion:

Conclusion Shortage of skilful workers is the major risk faced by almost all the companies. This is because; the skilled workers are migrating between companies very often due to the high demand in the market/ Middle east countries. Since construction sector are in the boom side, construction companies are in move to make profit as soon as possible in current wave itself.

Conclusion…:

Conclusion… Inflation rate is very high and increasing proportionately with time, this causes the increase in prices of materials like cement, steel which intern causes financial risk to the developers and construction firms. Banks have also raised their interest rates for the loan given by them, this have affected the residential construction market hugely. Thus the financial part of risk is very high than any other risk.

Conclusion…:

Conclusion… Large companies are accepting that there are few environmental effects due to their project, but says that it is a global phenomena and it can not be nullified, but only can be reduced. Overall management and the financial risks are high when compared to other risks.

Suggestions to the companies: :

Suggestions to the companies: Risk management should be considered a primary tool to assess the project. From the survey we can understand that risk management is not followed in most of the companies as such but if followed also it is not done systematically. Immediate mitigation measures are not in place if a risk event happens. Financial part of the risk is a global phenomena and this risk should be handled carefully using financial consultants since this cannot be handled by engineers alone.

PowerPoint Presentation:

There is not a single company with a separate person in the manager level who handles risk management within the company and takes decision on his own. Thus a risk management body within the company should be formed. Most of the company’s management follow Top to down approach which is a traditional approach, but Down to top approach should be followed so that the employees’ voices are heard.

PowerPoint Presentation:

Thank you THANK YOU

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