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Risk Assessment in Construction Projects PDF

   

Added on  2020-12-18

12 Pages1998 Words340 Views
RISKASSESSMENT

EXECUTIVE SUMMARYThe report is discussing level of risk or uncertainities at time of undertaking aconstruction project by ABC construction company which is a SME.The procedure whichcovers the life cycle of whole project from its initiation to closure will be called to as riskmanagement plan. Under this, risk register is considered as an important part which is providinggist of whole project with relevance to risk. This following project is providing evaluation onrisk at the time of project, ways to lower down these risks as well as mentioning the peopleinvolved with their roles and responsibilities. There will also be reporting of these risks, changesof risk status undertaken by project and Steering committee with complete risk register includingall identified uncertainties and mitigation strategies to reduce likelihood as well.INTRODUCTIONRisk is a chance of some wrong happening that is generally not expected and thus, it willbe affecting business in negative manner (Pinto, 2014). There is no such activity of businesswhich is not having some of the elements of risks linked with. It is the duty of businessmanagement that they are identifying all risks and uncertainties that are associated with activitiesand tasks of company. So, if company is able to identify the risks, they will be able to avoid themespecially in construction industry like that of lower bidding for any higher level of constructionproject and this could lead to bankruptcy of firms as well. This current project concerns aboutwhat are all risk, uncertainties or potential threats that are associated with execution and closureof construction project which is managed in proper way.RISK ASSESSMENT3.1 IdentificationRisk identification is the process of finding out all risk that are associated at time ofundertaking construction of building and those which are impacting business or project as well.These different types of risks will lead to reduce or delay in project outputs and sometimes, theywill be having catastrophic effects on company as well. So, under this process, recording andidentifying potential risks to projects will be impacting delivery of project (Taroun, 2014). Butwithin this type of project, one of the most difficult things will be identification of all major risksassociated with project. So, management needs to identify relevant risks to be identified by1

causal categories. It includes risk of business, corporate, infrastructure and project that could bebroken down in economic, human, political and environment.So, in this current project which is of WSI Blue Mountains TAFE there are variety ofcommercial and residential construction with annual turnover of $25 million. There are some ofthe risks that are identified in this context which are related to completion of building project likethat of:ContractualTechnical which are faults in designLogisticalConstructionFinancial 3.2 Analysis and evaluationAt the time when risk is identified, it will be required that management is analysing andevaluating these risks so that they will be able to mitigate them all in given time frame. Ingeneral way, the impact of these risks will be there on quality of project. When outcome will bedelayed, cost is increased and timeframe are extended (Taylan, Abdulaal and Kabli, 2014). So, inorder to analysis risk, management needs to include two main factors namely likelihood of itshappening which means that what has chance of occurrence for any event. The consequence willbe possible outcome of related risk which is calculated using following formula:(Level of risk = consequence x likelihood)This likelihood could be measured as L= Low, M=Medium, H=High while consequencewill be measured according to impact of risk in negative or positive manner that is also ranked asL= Low, M=Medium, H=High and S= Sever.So, in this project, there are certain risks associated at the time of construction like that ofincomplete design and inadequate site investigation which are considered to be technical risk,availability of resources and sufficient transportation facilities are determined as logistical risk.Further, these are uncertain of productive resources and that of weather or seasonal implication isconstruction risk and delay in payment and local taxes are termed to be financial risk (Pinto,2014).2

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