Construction Project Management Risks

This assignment focuses on analyzing the various risks inherent in construction projects. Students are expected to explore different risk assessment methodologies, identify potential risks specific to construction, and analyze the impact of these risks on project success. Furthermore, the assignment requires students to evaluate and propose effective risk management strategies to mitigate identified risks.

Construction Management

TABLE OF CONTENTS
introduction...........................................................................................................................................4
Schedule A: Proponent’s Authorisation.................................................................................................4
Schedule B: Proposal.............................................................................................................................5
Schedule C1: Design Details- House and Land Packages 630...............................................................12
Schedule C2: Design Details: Multi Unit Development 630.................................................................14
Schedule D: financial Proposal.............................................................................................................14
Schedule E: Proponent Declaration.....................................................................................................15
Schedule F: Ethical Suplier Declaration................................................................................................17
Conclusion...........................................................................................................................................19
references............................................................................................................................................20

TABLE OF FIGURES
Figure 1: Gantt chart..................................................................................................................6
Figure 2: Network Diagram.......................................................................................................7
LIST OF TABLES
Table 1: Project plan for whole construction project.................................................................5

INTRODUCTION
Managing different types of construction is not an easy task because it requires to
manage multiple task at the same time. For instance, planning and scheduling is an important
section of construction management because these functions play an important role in
managing activities and help engineer to accomplish the whole construction in time and
specific budget. The current research proposal will focus on a construction project and main
objective of this project is to build 30 units for public housing. Purpose of this project is to
lead more appropriate accommodation configurations to meet the changing needs to tenants.
Along with this, it will also focus on better integration of the public housing unto community.
Appropriate management of construction will also try to reduce the maintenance cost and
operating cost. During the building of 30units engineer and construction manager needs to
focus on efficiency of water and power. In addition, this project will also ensure about the
delivery of property before the December 2018 for occupancy. Therefore, for completing all
these objectives the current research report will include the Proponent’s Authorisation, entire
proposal, design details, financial plans and ethical supplier declaration in the following
sections of this report.
SCHEDULE A: PROPONENT’S AUTHORISATION
Proponent Details
Proponent’s Name (in Full) Vaughan Construction
Address of Registered Office 880 Lorimer Street, Port Melbourne VIC
3207
PO Box 320, Port Melbourne VIC 3207
Postal Address 9A Commercial Road Kingsgrove NSW
2208
PO Box 451 Kingsgrove NSW 1480
Status It is a private construction company of
Melbourne.
Authorised on behalf of the Proponent
by:
Name ABC
Position Construction manager
Proponent registration Yes, proponent is a registered owner of the

properties.
Parties with financial interest:
City Bank Australia It is one of the most important resources for
finance. Proponent can take loan from the
City bank for raising the financial capital for
building 30 units.
HSBC Bank Australia Using this bank company can increase the
financial capital which will help in
satisfying the needs and requirements of
funds.
Rabobank Australia Limited It is also an important source of fund.
SCHEDULE B: PROPOSAL
Construction of 30 units public housing building is one of the bog project for the
organization. For completing this project in effective manner, construction manager will
develop a proper plan and it will include different stages which will help in completing the
project in effective manner. There are number of techniques that can assist in monitoring h
whole project but construction manager will use project schedule, Gantt chart and network
diagram for monitoring the whole project. The following proposal will be followed by
Vaughan Construction for developing 30units public housing building:
Table 1: Project plan for whole construction project
Task Name Duration Start Finish Predecessors
Building of 30 units for public
housing 14 mons Mon 06-11-
17
Fri 30-11-
18
Formulating aim and objectives for
taskforce 0.5 mons Mon 06-11-
17
Fri 17-11-
17
Deciding location and land 1 mon Mon 20-11-
17
Fri 15-12-
17 2
Surrounding amenities 1 mon Mon 18-12-
17
Fri 12-01-
18 3
ACT Territory Plan Zoning and Gross
Floor Area (GFA) 1 mon Mon 15-01-
18
Fri 09-02-
18 3,4
Analyzing existing site / Building 0.5 mons Mon 12-02- Fri 23-02- 5

details 18 18
Determining Site impact or suitability 1 mon Mon 26-02-
18
Fri 23-03-
18 5,6
Delivery program 1.5 mons Mon 26-03-
18
Fri 04-05-
18 7
Development consent status 1 mon Mon 07-05-
18
Fri 01-06-
18 8
Track record 1 mon Mon 04-06-
18
Fri 29-06-
18 8,9
Risk management 1 mon Mon 02-07-
18
Fri 27-07-
18 10
Developing design for house 2 mons Mon 30-07-
18
Fri 21-09-
18 11
Design for land package 1 mon Mon 24-09-
18
Fri 19-10-
18 12
Design of multi-unit development 0.5 mons Mon 22-10-
18
Fri 02-11-
18 12,13
Ethical supplier declaration 1 mon Mon 05-11-
18
Fri 30-11-
18 14
Figure 1: Gantt chart

Figure 2: Network Diagram
As per the above project plan, Gantt chart and network diagram the whole project will
be completed in 14 months only. As per the project objective it will be accomplished 30 units
building before December 2018. It is the shortest duration for completing such kind of big
projects.
ITEM PROPOSAL DETAILS
Location Victoria street, Melbourne
Title details In order to build multi-unit dwellings, the
entire land will be divided into various
sections. For this aspect, land will be
divided into 10 sections and in them 3
blocks will be made at each section. This
will hold all the 30 dwellings which are
going to build on them. Moreover, it will be
easy for the customers to identify their path
and their dwelling (Harris and McCaffer,
2013). Moreover, it will make the
construction in a more systematic manner.
Furthermore, every block will be given
separate titles for a better identification.
This will also give an attractive look to the

entire area and every house dwelling will be
separated from one another which will
create privacy for the house owner and his
family (Haddad and et al., 2012).
Surrounding Amenities There are plenty of things surrounded in
Victoria Street. There are numerous local
shops which would be required by the
residence on a daily basis (Hussain and
Windsperger, 2010). For example, there are
Folia House, n number of cafes, sport
amenities shop, parlour, red cross shop for
bags and apparels, Shen Chinese chemist
shop. Along with that, there is a huge Queen
Victoria flea market, various restaurants and
pubs for the entertainment. Further, Bike
tours Melbourne is also nearby where
activities could be done. Moreover,
Flagstaff Garden is nearby where residence
can spent their time. In addition to these,
there is a State Library of Victoria and
Melbourne Central (Halpin, 2010). Most
importantly, there is a church of St Mary
Star of the Sea is also located nearby. Thus,
it can be regarded as the ideal location for
the residence because all the required shops,
amenities, religious spot and recreational
activity is nearby and this will help the
people in engaging in day-to-day life (Zhi,
2015).
ACT Territory Plan Zoning and Gross
Floor Area (GFA)
The zoning of site in victoria street is done
into various parts. These zones are named as
mixed zone, general residential zone,
commercial zone, public park and recreation

zone, capital city zone, industrials zone and
public use zone. Thus, large part has been
allocated to mixed zone and next residential
zone. Therefore, building 30 units will not
be major problem in this street (McGeorge
and Zou, 2012).
Furthermore, the allowable GFA on site for
the present building would be 3,000,00
meter square. This will include the entire
area of a housing society such as flats, outer
area, play area, parking area, park, etc. In
addition to this, construction company has
to take care about the height of the building
and solar access is necessary in the building.
Without solar heater, a building could not
be constructed and for that purpose,
Vaughan construction will acquire high end
quality solar equipment for the perfect hot
water and also it will not give cold water
during winters (Kaming and et al., 2017).
Existing Site/Building Details There are few sites which are located
nearby and those are State Library of
Victoria which is an old library and many
people come there for reading. During the
construction the company will take care that
the noise of hustle and bustle does not
disturb the readers. Further, there is a
Flagstaff Garden where people come for
walk and playing so the dust of building
construction will not bother them as the
constructer will take care about this (Hardin
and McCool, 2015). Moreover, there is a
Melbourne Central nearby. So, before

starting a construction, the company would
remain careful about these existing sites.
Any of the heritage sites should not get
destroyed while building the 30 units.
Furthermore, the company will take care
about them during the entire construction
(Koskela, Stratton and Koskenvesa, 2010).
Moreover, more trees would be planted in
and around the society for the purpose of
greenery in the area. This will also give
fresh air to the residence of the 30 units and
it will also help in the absorption of noise
which will be created during the
construction at site (Kymmell, 2007).
Site Impacts/Suitability As the site is located at a very busy street so
it is likely to get impact due to various
mechanisms. For example, there are various
heritage sites situated nearby the victoria
street so the constructer has to take care
about the noise and dust so that other sites
does not get disturb due to the construction.
Furthermore, there are various shops nearby
which may also get impacted due to the
hustle and bustle (Fisk and Reynolds, 2011).
However, the people living in the
surrounding my put a stay order to the site
which is a major impact. Furthermore, he
site is also prone to the government decision
because chances are high that any time
government could change their rule
regarding the construction and this may
impact the site. The reason is that, political

condition of Australia is fluctuating and due
to this, new government could take new
decisions which may hamper the entire
construction. However, the site is located in
the heart of the city, thus, the suitability of
site is appropriate. Moreover, the new
construction will improve the look of the
area so there are low chances of any
restriction from the government side (Al-
Bahar and Crandall, 2010).
Delivery Program
Vaughan Construction has always delivered
its project on a given time and never
delayed any construction project. This is the
only firm which always deliver the
development at a promised date (Chan and
et al., 2010). Thus, there are complete
chances that this project will also be
delivered on a projected date and time.
Similarly, for the present construction
project following delivery program has been
mentioned.
Site availability: Site has been available
already and the entire legal procedure has
been completed regarding the construction
(Hu and Zhang, 2011).
Proposed on site start date: The project
will get start on 15th December, 2017
Proposed date of practical completion:
Occupancy will be available from
December, 2018.
Development Consent status Vaughan Construction has already applied
for the application and the proposal which
has been given to the investor includes an

approval letter from the government. The
reason for early application is that, not
much time will get wasted in the approval
and directly the work on the site could
began. Thus, the construction to be carried
out with the Vaughan construction is
completely safe (Fallah-Mehdipour and et
al., 2012). Furthermore, the development
application has been duly signed by the
government as the firm has already applied
for the construction to be carried out at
victoria street. As the working by Vaughan
construction takes place in a healthy manner
and this is the reason government signed the
letter and sent it back in less number of days
because not much enquiry for this firm is
required (Akintoye and MacLeod, 2017).
Track Record
It is important to track a record for the
construction of 30 units and for that
purpose, details have been provided as
follows:
Number of dwellings: There are in total 30
units which will get build on the defined
area. Out of which 15 units will be a house
and 15 will be a tall building or sky
scrapers. Each building will have 75 flats
and all the 15 units will have in total 1125
dwellings (Huang, 2011).
Location: 30 units residential society will be
located at Victoria Street, Melbourne.
Budget: The total budget will range between
AU$ 400-450 millions.
Risk While carrying out any project, risk also

accompanies. Similarly, in this project also
there are certain major risks which may
impact the delivery of the development (Hu
and Zhang, 2011). The first and foremost
risk is the change in government rule. This
is the major risk because anytime
government could change the construction
rule and this may impact the delivery of the
development on a given time. Furthermore,
the second risk is of the stay order form the
court due the disturbance cause by the
construction site to the nearby market and
other residential areas (Koskela Stratton and
Koskenvesa, 2010). This will delay the
delivery of the development. Further, non-
availability of the raw materials used for the
construction, may also cause the problem.
Along with that, the legal prosecution might
cause risk to the delivery of the
development.
In order to reduce or mitigate these risk,
Vaughan construction will take respective
measures:
1. The firm will make alternative measures
in advance so that during the change of
rules, the major impact will not be upon the
construction site (Fisk and Reynolds, 2011).
2. In order to avoid the stay order from the
existing buildings and nearby market, firm
will majorly do the construction work at
night and also much hustle bustle will not
be done during the construction (Brown and
Phua, 2011).

3. In advance prediction will be done
regarding the availability of raw materials
and pilling up of material will be done so
that shortage of material will not impact the
delivery date. It must be noted that hoarding
of the material will not be done illegally.
The company will seek the permission from
the government and then only it will pile up
its stock (Akintoye and MacLeod, 2017).
SCHEDULE C1: DESIGN DETAILS- HOUSE AND LAND PACKAGES
630
Generally, design details include all the minute details related to the design of the
house and its interiors. Further, there are various parts which come under this detailing. First
is the House and Land packages in this two steps are included in general. First is the buying
of the land and second is then building the house over that land (Osipova and Eriksson,
2011). It is also known that these days most new home constructions are done by the property
developers and they are those who acquire land when released by the government. Further,
those developers lay down the infrastructure such as roads, utilities, water and sewage. Either
property dealers could build the homes and sell them as a complete house and land deal or
they could offer a number of standard or customisable home designs, so that customer could
chose the block of land they want and the features they would like in their new house. It will
be beneficial for the customers in future of buying their new house as this way because it will
ensure to get a property which suits their needs. Further, purchasing a new home that could
also help in planning their finances with a great confidence, with lower maintenance costs
and no major repair expenses in the foreseeable future. Along with that, eco-friendly
materials and feature are usually a part of the package because sustainability has become a
benchmark in the industry. Furthermore, these package are always tailor-made for appealing
a specific group of buyers so it will be easier for the constructor to sell off all the dwellings
without any obstacle.
In addition to this, it can also be described that house and land packages which are
designed at a fixed price and no other hidden or addition cost (McGeorge and Zou, 2012).

Thus, Vaughan construction will also present the house and land package so that customers
will get the houses or flats at a fixed price. Furthermore, there are various benefits of
acquiring a house at house and land packages from Vaughan Construction and they are listed
below:
 100% fixed price guaranteed and it includes site costs, OH&S requirements, council
requirements, covenants and developer guidelines (Hussain and Windsperger, 2010).
 Personalised service for the stress free finding of the right house and land
combination which will best work for the customers.
 Inclusion of high quality standards.
 Lastly, the ability of a customer to personalise their home.
There are high numbers of benefits associated with the house and land package
system because it creates a win-win situation for both constructor and clients (Gomez,
González and Vazquez, 2010). Some of the house and land packages are described as below:
1. 2 bedrooms, 1 bathroom and 1 garage house: $346,700
2. 3 bedrooms, 2 bathrooms and 1 garage house: $387,300
3. 3 bedrooms, 2 bathrooms and 2 garage house: $397,800
4. 2 bedrooms, 1 living area and 1 kitchen flat: $242,300
5. 3 bedrooms, 1 living area and 1 kitchen flat: $289,700
SCHEDULE C2: DESIGN DETAILS: MULTI UNIT DEVELOPMENT
630
In a general manner, common areas means all those parts of a multi-unit development
designated or that is intended to designate as common areas which includes all relevant
structural parts of a building and it shall include in particular. Thus, this construction is done
in a multi-unit system so it is important for the construction firm to take in notice various acts
linked to it (Chen, 2010). The firm has got the permit to build a multi-unit building in a given
area. Moreover, it has been permitted that not more than 30 dwellings will be built on the
given area. Furthermore, the 30 dwellings will be built by keeping in mind the various
properties which are on either side and at the back. Further, the surrounding neighbourhood
will also be taken care of and lastly, the particular features and constraints of the site are also
noticed beforehand (Eroksuz and Rahman, 2010).

In addition to this, environmental sustainability has been taken care while making the
design of multi-unit. For instance, rain water harvesting has been included in the plan;
plantation has been started in an outer surrounding and also eco-friendly material will be
acquired for the construction so that it does not impact the health of the already existing
people (Harris and McCaffer, 2013). Along with this, the constructing company will also take
into consideration all the legal prosecution so that customer of the house does not have to
face any issue in future.
SCHEDULE D: FINANCIAL PROPOSAL
As per the above discussion 30 units building project is one of the big project and as per the
requirement construction manager needs to complete it within 14 months which is very small
time. So, for completing this project in effective manner Vaughan Construction needs to use
high number of resources such as human, operational and financial resources. It is a large
project so; company needs to arrange high amount of funds from different sources. The major
requirements of funds are as follows:
PROPOSED PRODUCT FIXED PRICE
(in $A and GST inclusive)
Assumptions
(if any, eg. any “Inclusions” or
additions that are not included
in the Fixed Price)
Land Only $10,00000AUD N/A
House and Land Package(s) $40,00000AUD N/A
Multi-unit Developments of no
more than 30 units
$5000000 N/A
Multi-unit Developments
where the proposal is for the
sale of part of the development
$5500000 N/A
As per the above financial table it can be say that total value of multi-unit
development project will be high. So, for managing the fund Vaughan Constructions needs to
obtain money from different internal and external resources. There are number of internal
resources by which organization can obtain money so, Major resources of funds which will
be used by this construction organization are retained earnings, share capital, bank loans,
sales of assets, etc. Retained earnings are one of the major internal resources in which
organization utilize remaining part of profit of the company. It is the best financial resource

because there is no specific interest and there is not needs to repay the amount of retained
earnings. So, it is a cost free financial resource which will reduce the burden of extra cost on
Vaughan Construction. Another source of fund for the organization will be bank loan. This
construction organization is one of the growing organization in Australia and its market
position is also very good. There are number of leading banks also from where it can get a
big amount of bank loan. It is one of the best financial resource because company can get the
high amount of money and can return after long time with interest. But, it is little bit costly
because company needs to pay extra interest on it. So, Vaughan will use this source of funds
for this project for increasing the financial capital.
Vaughan is one of the growing construction company and this multi-unit project is a
big project for company so, managing this project in effective manner and satisfying the
financial need of this project, company can sale old constructed buildings and lands which
are not as much worthy. It will help in getting more money for managing the whole project.
Therefore, using all this financial resource constructor manager will manage the 30 units
building project. Along with this, financial management will be a complex task for the
company. There are number of risks such as lack of funds and increment in cost, etc. so, for
reducing the unnecessary cost construction manager will use the activity based costing
system. It helps in reducing the unnecessary cost of the company on different activities. It
allocates funds as per the needs and requirement of each and every activity.
SCHEDULE E: PROPONENT DECLARATION
The constriction organization Vaughan is going to construct a residential building at
Victoria Street, Melbourne. For the project, the declaration is essential about the
environmental and financial approaches. In addition to this, the proponent deceleration
involves overall planning activities, pre-feasibility analysis report and information about the
risks issue. The declaration will involve information about the economic, social and
environmental operations and their impact due to construction activities. The proper
assessment and follow up of guidelines for managing the activities will be involved in the
declaration document (Harris and McCaffer, 2013). According to analysis, the project
manager will develop the statements for premier declaration of project and different parts that
are going to be involved. The draft of services and information about the scheduling of the
tasks and update the management team for further changes. The declaration document will
involve advises for managing the environmental protection approach as well utilization of
resources according to requirements. The legislations that consider by construction

organization will have significant impact of relevant proposal and laws for environment and
labour.
The project proponent will prepare and involve the IMP or CIS to satisfy the
requirements to set out the scoping that requires the effective implementation of time
schedule that proposed in the plan. According to analysis, the proponents is agrees to ensure
the public statements in relation to the timing and status of processes that need to be
undertaken for developing the building in the Melbourne (Dave.et al. 2016). In addition to
this, the declaration document will also involve proponent responsibilities for managing the
project and related functions that include risk for labour and environment as well as the
payment. According to law of Australian government, the construction project must be
designed and developed after the approval of the Department of Environment for managing
the biodiversity Conservation Act 1999. The information that are available through proponent
declaration will be supported by the coordinator-general of Queensland government (Guo.et
al. 2013).
For the IMP pathway the planning that received by the environmental department will
seek for approval for implementation and access of resources to meet the commercial
objectives. The ministers of planning make the decision over the approval of location,
construction activities and utilization of resources. After the approval over the declaration the
management will start working on project. This process will take 20-30 business days for
listing the activities, planning and scheduling of the tasks, analysis of risks and
implementation of strategies to overcome as well consideration of rules and regulations
(Mäki and Kerosuo, 2015). This kind of process helps the department of environment to
determine the pathway and draft of scoping the direction for managing the construction
project. The top management of Vaughan Construction will address the terms and conditions
of reference to the satisfaction of Coordinator-General. The Coordinator-General will
evaluate the EIS report and project scope for 30 unit and offer the guidelines under the
environmental protection issues. At the end of the delectation form the acknowledgment will
be provided that will involve:
a) I have read the provided information related to project of proponent as the project will
design and developed under the Co-ordinator General considering the section 26(1)(a) of
SDPWO Act (Morrison-Saunders.et al. 2015).
b) I am duly authorised to sign the document on the behalf of proponent
Name XYZ

Signed
Position Construction Manager
Proponent company Vaughan Construction
Name of project 30 units public housing project
Date
SCHEDULE F: ETHICAL SUPLIER DECLARATION
The declaration relates to
Name of the
company
Vaughan
Construction
Organization no.
Address 880 Lorimer Street,
Port Melbourne VIC
3207
PO Box 320, Port
Melbourne VIC
3207
Country Australia
Postcode City Melbourne
Contact person Constriction
manager
Email
The ethical declaration from supplier for construction project involve information
about the business principles and legal activities that organization is going to follow for the
construction project of 30 unit building at Victoria street, Melbourne. The ethical declaration
of supplier for the project will include information about the contractual human rights and
freedom the associated with the regulations of labour laws. According to ethical deceleration
requirements the document will consider local legislations of Australia and comply with the
relevant provisions related to business activities that used in the international agreement and
conversation (Lucas and Fergie, 2016). Moreover, the compliance with the fundamental
ethical standards for managing the business practices will involve safeguarding of human
rights and workers’ rights. The terms and conditions would be applied for both suppliers and
business organization for managing the ethical and safe working environment (Dibley and
Wilder, 2016).
The supplier will consider human rights and avoid the activities and approaches that
leads to breach of human rights. In addition to this, the supplier will ensure the healthy and

safe working environment for workers. The welfare approaches and safety of worker at the
construction project of resident building will the major priority for the supplier (Eady.et al.
2013). The declaration also involves information about the any contribution in forced labour
and child labour considering the law of ILO convention concerning the minimum age of 15
years. Following are the major ethical supplier declaration for the project:
 The supplier will not contribute in to discrimination on the basis of ethnic origin,
religion, age, sex and disability of an individual.
 Consideration of regulation of trade union and government agencies for managing the
work.
 The supplier will not favour and permit the foreign workers to work for the lower
remuneration than the applicable national standards of minimum wages.
 Supplier will provide healthy and safe working environment for workers by offering
the information about use of machinery and equipment’s.
 The supplier shall secure that working hours are not excessive and need to be comply
with the applicable local laws.
 The individual has right to join or establish the trade union and engage in the
collective negotiation respectively (Schleper and Busse, 2013).
Environmental
By considering the requirements and approaches that construction organization is
going to use the supplier will take the responsibilities for maintaining the legal and ethical
approaches for betterment of environment and use the alternative processes to meet the
issues. The supplier will try to incorporate the activities that are not having the negative
impact on the environment (Laczniak and Harris, 2016). The project team will use systematic
approaches for minimising the negative impact of the activities.
Business practices
The supplier will work actively to combat with all forms of corruption and unethical
process in the business. According to the working principles of business the supplier will not
work as middleman, offer details, not promise or confer an improper advantage to any other
public and private official regarding the work for the project. In addition to this, the supplier
will undertake the trade and business restrictions regarding the good faith and utilization of
goods and services. The supplier will not involve in any financial decision making and
utilization of resources for personal benefit. Moreover, the confidential information that
supplier will gain through the links will use with the cooperation of group sand approval of
higher authority (Wooliscroft.et al. 2014). The confidential information will involve data

about the customer, investors, partners and other supplying parties for the construction
project. Apart from that the business practices for supplier will involve the fair competition
according to the group policies and standards. The supplier will not interfere in decision
making and not share the information about the prices, terms and condition, cost, margin and
strategies that have been used for completing the construction project.
Compliance and inspections
The supplier would compliance with the policies and process that followed by the
Vaughan Construction, organization. The documentation of managing fair approaches will
have consideration of standards of operations to sub-contractor. The manager of supplier
team will be liable for managing the issues and proper monitoring of the tasks and activities
for improving the effectiveness of the construction project (Leppelt, 2013). The inspection
would be done on regular basis before and after completing the tasks for each unit. The
management will fairly develop and communicate the report about the inspection to the top
management and construction organization.
CONCLUSION
Construction of 30 units public housing building is a complex and big task but
Vaughan Construction can manage this project in very effective manner. It will complete this
project in 14 months only and total required funds will be $50000000. Along with this, the
decided location for this project is Victoria street of Melbourne. It is one of the most
commercial area of Australia so, manage has decided to select this location only. It is very
expensive area so, for managing the funds construction company will use different resources
such as retained earnings, bank loans and sale of unused land, etc. Along with this, it will also
focus on sustainable development and management of the whole project.

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