Risk Management Strategies in Infrastructure Development

SCHOOL OF ARCHITECTURE & BUILT ENVIRONMENT
ARCH_7046 Construction Management and Technology I 2019
Assignment 2: Discussion Paper |Name:
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Risk Management Strategies in Infrastructure Development
1.0 Introduction
Infrastructure development affects the human race and its environment
directly. However, the development process is associated with numerous
risks which impact lives either positively or negatively. Negative impacts are
defined, quantified and mitigated through a well-defined framework of risk
management. This paper looks into the risks associated with infrastructure
development, how they impact lives and the measures that are usually
adopted to control these impacts. The paper focuses on the concept of risk
management based on other scholars’ point of view, the importance of risk
management, the possible risks in infrastructure development, their impacts
and how the impacts are done away with. Moreover, a real-life scenario
involving a risk in an infrastructure development project has been presented
to highlight the impacts of the risk, the management strategy adopted, and
to provide recommendations for improvement.
2.0 Literature Review
A risk is an unforeseen event that can occur unexpectedly in the planning or
execution phase of a project (Williams, 2015). The impact of a risk in a
project can affect its performance positively or negatively. Positive impacts
are encouraged and promoted while negative impacts are mitigated through
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a well-informed risk management strategy. A risk management strategy is a
conceptual framework that is developed to identify and quantify risk while
giving priority to the most critical risks (Beckers and Stegemann, 2013). A
risk management strategy aids in the creation of appropriate measures
which when used reduce the possible impact of a menace.
2.1 Importance of Risk Management
Risk management is a significant aspect of infrastructure management and
development. A good risk management framework aids in the identification
and quantification of risks in a project. It prioritizes the most critical risks and
provides the appropriate measures to promote the risks that impact a project
positively and the necessary measures to curb risks that impact a project
negatively (Smith, Merna and Jobling, 2014). In infrastructure development,
risk management helps in saving of resources, environmental conservation,
and promotes the health of personnel and the value of the infrastructure.
Moreover, it shields the project from possible future hazards and ensures
that the project is planned and executed smoothly and successfully to
completion (Spang, 2011).
2.2 Major Risks in Buildings and Civil Engineering Projects
The most common negative risks that occur in most infrastructure
development projects are:
Natural calamities: These are risks that are related naturally occurring
features in sites where projects are situated or issues such as floods and fire
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(Rihar, Zuzek, Berlec and Kusar, 2019). An infrastructural development that
involves construction of a high-rise building can be halted by poor-slope of a
site or the presence of continued earthquakes. Construction of a road
infrastructure can be halted by poor slope, too much earth water and uneven
ground. Fire and floods can lead to loss of lives and destruction of the
infrastructure project.
Security risks: They are risks that are caused by insecurity issues such as
theft, terrorism, vandalism and corruption. Theft and vandalism can lead to
lose of resources and materials used within the development site. Terrorism
and violent thievery jeopardize the health and safety of individuals in a
working site and can even lead to loss of lives. On the other hand, corruption
can lead to poor allocation of resources and job opportunities to
development projects which can in turn can result to collapse of the project
(Rihar, Zuzek, Berlec and Kusar, 2019).
Revenue and cost related risks: Poor allocation of resources during the
planning phase and poor budgeting of the available resources can impact a
project negatively. It can lead to delayed period of completion or even death
of the project. Cost related risks also come up as a result of inflation and
market changes during the execution phase of a project. They lead to
escalated costs which are not planned for during the budgeting phase and as
a result lead to delays or change in design to accommodate the unexpected
costs (Spang, 2011).
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