8/19/2019 Risk Management in Construction Projects - Abstract

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RISK MANAGEMENT IN CONSTRUCTION PROJECTS

A paper to be presented at 20th continin! pro"essiona# de$e#op%ent se%inar in &ar es Sa#aa% on

20thSepte%ber'

Prepared b( )S &r' Stans#as Nti(a*n+e

A,STRACT

The prime objective in any construction project is to attain a successful project, a project that has been

 properly designed, constructed according to design and specifications, completed within agreed time and

cost. However, construction projects are inherently complex, involve multiple inputs and feedback 

 processes and are done in uncertain environment. This naturally creates problems calling for a need to

manage the projects so as to attain the desired objectives.

The Project Management nstitute !PM" !#$$%" provides nine most critical parts of project management,

which are& project integration, scope, time, cost, 'uality, human resource, communication, procurement

and risk management. n practice all these parts are e'ually important in(order to attain a successfulconstruction project. This paper focuses on one critical part) risk management.

*isk management !*M" is a common concept which is used in construction industry as well as in other 

industries. *M is a systematic process of identifying, assessing, responding and monitoring risks. The

overall goal of the risk management process is to maximi+e the opportunities and minimi+e the negative

conse'uences of risk threats in a project.

onstruction projects are always uni'ue, and risks may arise from a number of different sources.

Moreover project success could be viewed from different perspectives of the individual owner, developer,

contractor, user, the general public, and so on. These different perspectives explain the reason why the

same project can be considered a success by one party and unsuccessful by another.

The aim of this paper is to enable seminar participants to understand the process of risk management in

construction projects. To achieve that, the paper first discusses key terms and concepts used in risk 

management whereby meanings of risk and uncertainty the terms which often are used interchangeably

are clarified. The importance of risk management and factors influencing risks in construction projects

are cited. The paper outlines the process of risk management in construction projects by explaining briefly

the steps involved in risk management process. The steps covered include& risk identification which is the

 process of identifying and documenting the associated risks in a project) risk analysis - the process of 

examining each identified risk issue to determine the likelihood and impact on the project) risk 

responsehandling - the process of selecting and applying strategies in(order to set risks at acceptable

levels) risk monitoring - the process that tracks and evaluates the performance of risk handling actions)and risk planning which is formulation of a detailed program of action for the management of risks. The

important output of risk planning process is the *isk Management Plan !*MP" which is the risk related

road map for the management of risks in a project.

The last part of the paper reviews some standard forms of contractsagreements commonly used in

construction projects undertaking in Tan+ania with the aim of examining how risk provisions are

addressed in the documents so as to propose areas for improvements.