the portfolio balanced risk index model and...

Research ArticleThe Portfolio Balanced Risk Index Model and Analysis ofExamples of Large-Scale Infrastructure Project

Wu Gao12 and Kairong Hong1

1Business School Central South University Changsha 410083 China2Department of City Management Hunan City University Yiyang 413000 China

Correspondence should be addressed to Wu Gao gw740620sinacom

Received 17 March 2017 Accepted 20 April 2017 Published 14 May 2017

Academic Editor Omar Abu Arqub

Copyright copy 2017 Wu Gao and Kairong Hong This is an open access article distributed under the Creative Commons AttributionLicense which permits unrestricted use distribution and reproduction in any medium provided the original work is properlycited

This paper focuses on a three-dimensional portfolio balanced risk indexmodel for large-scale infrastructure project risk evaluationas a hot topic of current research Taking subjectivity utility and complex evaluation motivation into consideration a method ofcombinational equilibrium evaluation is built using the index form to reflect whole loss changes of risk For risk index evaluationand measurement issues this paper first constructs a risk evaluation index system and three risk coefficients of single factor byquestionnaire survey and fuzzy evaluation Then we calculate the risk index of single factor which arrives at the classification andcombination risk index through AHP method Finally we verify the index validity by analysis of examples With this research weexpand the evaluation dimension and provide a new analytical tool for risk monitoring and warning

1 Introduction

In the near future major infrastructure project investmentwill prove to be a pivotal means of improving peoplersquoslivelihood and promoting a healthy and sustainable develop-ment of Chinarsquos national economy How to scientifically andreasonably carry on the dynamic evaluation will influencethe control solution and even the success of the projectProject risk refers to the deviation between the final result andexpected subject or the loss due to the existence of uncertainfactors In the joint action of internal and external environ-ment change andmultiple subject game major infrastructureproject risk is a complex and evolved dynamicmaking projectrisk evaluation more difficult Project risk measurementmethods in the existing literature include variance standarddeviation the product of probability and loss [1] and averagevalue of personal injury and property losses [2]

Among them using dynamic comparative integrativeand average characteristics a project risk index is amore intu-itive approach reflecting the project risk in numerical formon the basis of unified dimension [3ndash6] for example coastcorrosion risk index can be divided into stable low mediumand high level according to corrosion rate led by coastal

vulnerability and development degree (Guido Benassai et al2015) In order to better conduct evaluation of risk parame-ters based on existing fuzzy mathematical models like fuzzydifferential equations integrodifferential equations groupdecision-making [7] interval number [8] and so forth thispaper builds a portfolio balance index model (PBIM) forproject risk to reflect the multidimensional combinationvalue losses by combined dynamic equilibrium index andprovides analysis tools for early warning andmonitoringTheinnovation points can be listed as follows first it changes thecommon practice of the individual project subject evaluationand lets all item subjects participate in the project riskevaluation second psychological utility factors are added inthe project risk severity evaluation which breaks throughthe two-dimensional evaluation method of probability mul-tiplying the objective loss third group intuitionistic fuzzyevaluation and statistical analysis are used to determine therisk parameters which can reflect all the will and preferencesof the project

Research ideas and methods of this article are as follows(1) to filter main risk indicators through typical case analysisquestionnaire investigation and statistical analysis (2) to

HindawiComplexityVolume 2017 Article ID 5174613 13 pageshttpsdoiorg10115520175174613

2 Complexity

construct risk evaluation index system and design indexweight by analytic hierarchy process (3) to build a project riskportfolio balance evaluation model and add main psycholog-ical effect factors based on traditional two-dimensional eval-uation which can make up the limitations of the evaluationof project risk material loss and at the same time make theproject risk assessment have subjective and objective char-acteristics and (4) to do questionnaire survey in fuzzy eval-uation of project risk parameters The average data reflectsa collection of plural value preference which can effectivelymake up disadvantages of single subject evaluation andmakeproject risk assessment into a group of decision-makingbehaviors A project risk index can not only make valueloss explicit and comparable but can also provide evidenceto analyze and offer reasons for project changes and riskstrategy

2 The Theoretical Basis of MajorInfrastructure Project Portfolio BalanceRisk Index Model Construction

The risk portfolio balance index model of major infras-tructure projects must be based on multidimensional valueimpact and evaluation of complex decision-making motiva-tion analysis because they jointly determine game designideas of model parameters and a combined calculationmethod of risk index

21 The Subjective and Objective Value of Project Risk ImpactAnalysis General project risk evaluation only considers theprobability of occurrence and the objective severity howeverproject risk bears the characteristics of subjectivity andobjectivity Risk is the result of subjective evaluation whereineven the same project risk has different implications fordifferent subject [9] As a result subject factors must beconsidered in risk assessment The aim of rational behaviorsubject is to pursue comprehensive utility maximization [10]instead of simple profit maximization

Project risk evaluation should not only consider objectivevalue losses but also measure the damage to the subjectitself and othersrsquo well-being and satisfaction [11] Thereforea three-dimensional evaluation method used in project riskassessment (probability + objective severity + subjectiveutility loss) is a more scientific approach than the usualtwo-dimensional evaluation method (probability + objectiveseverity) Objective loss refers to material loss caused byproblems to project value such as a decrease of project qualityconstruction schedule delay safety performance degradationprofit reduction and rising costs Subjective utility cost refersto all types of emotional damage and the subjective judgmentvalue decline led by the risk to project subject Emotionaldamage includes psychological fear anxiety frustration dis-content injustice and impatience

22The Complex Psychological Motivation Analysis of Evalua-tion Subject Behavioral economics describes associated sub-jects of major infrastructure projects as ldquocomplex economicmenrdquo They have many preferences including risk aversion

altruism and fairness preference When evaluating projectrisk they not only consider their own risk losses but also takethe risk of other associated subjects into account They notonly consider thematerial loss brought on by the risk but alsoconsider psychology utility loss A project subject is basedon a complex collection of preferences when making riskassessment decisions [12 13] In order to validate the aboveviewpoint the questionnaire shown in Table 1 investigates thecomplex evaluation motivation of a project subject

Issuing 100 questionnaires to related subjects of majorinfrastructure project in a mobile Internet platform we had96 valid questionnaires returned indicating that 96 ofrespondents would both consider the social environmentaland ecological value loss while only 4 of respondentsreported they would only consider the economic loss Ofrespondents 89 stated they would also consider personalemotion risk capacity and psychological disutility and only11 of the respondents would merely consider material lossOf respondents 82 said they would consider the interestand feelings of other related subjects while only 18 reportedthey would consider only their own interest loss and subjec-tive feeling 98 of respondents indicated they would bothconsider other related subjectsrsquo behavior strategy reactionsand only 2 of the respondents would only consider theirown behavior strategy The survey suggests that most relatedsubjects would consider economic social environmentaland ecological value loss nonmaterial psychological utilitycost and behavior strategy reactions of correlation subjectsTherefore building a framework which contains factors suchas risk probability objective severity and psychological utilityloss makes the interactive equilibrium evaluation a morereasonable and scientific approach

3 Construction of a Project Risk PortfolioBalance Evaluation Index System of a MajorInfrastructure Project

The construction of an evaluation index system is the key tocalculating a project risk index and to screen and sort riskfactors within the whole life cycle of a major infrastructureproject based on many case studies and questionnaires Theobjective is to use the principles of importance representa-tiveness and conciseness and to select appropriate main riskfactors in order to form a project risk evaluation index systemaccording to the nature of the classification

(1) Questionnaire and Statistical Analysis of Project RiskFactors Screening First the main risk factors based on manycase studies throughout the life cycle of major infrastructureprojects are listed [14] Then the project risk factors list issent to the related subjects for their additional inclusions ormodifications in order to determine the main project riskfactors which are established after 2-3 rounds of feedbackand changes Finally respondents would score the occurrenceprobability and severity of risk factors by five-mark scoringFor the occurrence probability of risk factors five-markscoring ranges are as follows 1 = extremely unlikely 2 = slimchance 3 = certain possibility 4 = high possibility and 5 =most

Complexity 3

Table 1 Subject risk evaluation motivation questionnaire of major infrastructure projects

Answer choices Survey questions◻ Only considerthe former (1) Whether you only consider the economic loss or you consider the social environmental and

ecological value loss when evaluating project risk◻ Consider allfactors◻ Only considerthe former (2) Whether you only consider the material loss or you consider the personal emotion risk

capacity and psychological disutility when evaluating project risk◻ Consider allfactors◻ Only considerthe former (3) Whether you consider only your own interest loss and subjective feeling or both the interest

loss and feelings of other related subjects when evaluating project risk◻ Consider both◻ Only considerthe former

(4) If you do the project risk evaluation do you prefer to consider your own behavior strategy orconsider other related subject behavior strategy reactions caused by your own evaluationbehavior◻ Consider both

likely For the severity of the risk factors five-mark scoringranges as follows 1 = mild 2 = milder 3 = generally serious4 = serious and 5 = very serious Using SPSS170 softwareto statistically analyze 96 questionnaires the mean medianmode and standard deviation [15] of all the risk factorsrsquoprobability and severity evaluation are as shown in Table 2

(2) The Importance Sequence of Project Risk Factors Accord-ing to the results shown in Table 2 we are required to rank theimportance of the project risk factors based on the productsize of probability and severity average Results are shown inTable 3

(3) The Choice and Grouping of Major Project Risk FactorsAccording to the sequence of risk factors shown in Table 3we selected the top 50 of risk factors to construct a majorinfrastructure project risk evaluation index system shown inTable 4Owing to the uniqueness of eachmajor infrastructureproject the indicators in Table 4 can be properly adjusted toa specific project risk assessment

4 Construction of a Combinational BalancedRisk Index Model

The construction idea of a portfolio balanced risk indexmodel is based on clear index connotation and principleThis includes calculating individual risk index through thebase model and then calculating the project classificationand balanced risk index by using the method of weightedportfolio addition [16]

41 Construction Principles of a CombinationalBalanced Risk Index

411 Portfolio Addition Principle The construction principleof portfolio balanced risk index is as follows the projectoverall risk index is composed of six secondary indexesincluding (1) management risk index (2) technology riskindex (3) economic risk index (4) social risk index (5)

legal risk index and (6) natural risk index in addition asecondary index is made up of several three-level indexes Inthe process of portfolio addition expert evaluation methodis used to analyze the importance level of the index in orderto determine the weight of each index so as to reach theweighted synthesis step by step

412 Balance Reflects Risk Value Preference Principle ofMultiple Subjects The portfolio balanced risk index is acomprehensive reflection of the value ofmultivariate subjectsrsquopreferences and interests Through the questionnaire surveyof probability of project risk factors objective severity andsubjective opinions and preferences of all projects can bereflected in the project risk parameters

413 Dynamic Comparable Principle Theportfolio balancedrisk index reflects the size of the project risk and comparabil-ity between different periods of project risk For example ifthe projectsrsquo risks index in t3 is 03 and in t2 is 02 then theproject risk in t2 is smaller than t3

42 The Basic Model of Portfolio Balanced Risk Index Theportfolio balanced risk index is the function of three vari-ables risk probability objective severity and subject negativefeelings as shown in (1)The project risk coefficient value is inthe range of 0sim1 the greater the value the greater the projectrisk is [17 18]

RI119894 = 119891 (119875119894 119881119894 119865119894) = 1198751015840119894 times 1198811015840119894 times 1198651015840119894 (1)

Index definition RI119894 is single factor risk index 1198751015840119894 isprobability coefficient 1198811015840119894 is objective gravity coefficient 1198651015840119894is subjective feeling coefficient 1198751015840119894 = 1198751198945 (probabilitycoefficient is equal to probability scoringmean of all themainprojects concerning risk 119894 and the ratio of the maximumpossible value) 1198811015840119894 = 1198811198945 (objective gravity coefficientis equal to objective gravity mean of all the main projectsconcerning risk 119894 and the ratio of the maximum possiblevalue) 1198651015840119894 = 1198651198943 (subjective feeling coefficient is equal to

4 Complexity

Table2Survey

results

ofmainris

kfactorsthrou

ghthew

holelifec

ycleof

amajor

infrastructure

project

Stages

Sequ

ence

number

Risk

factors

Occurrencep

robability

Severity

Mean

Median

Mod

eStandard

deviation

Mean

Median

Mod

eSD

Decision

stage

1Incorrectp

rojectorientation

3188

30

30

0734

4083

40

40

0767

2Incorrectm

arketd

emandforecasting

3958

40

30

0824

364

640

40

0911

3Th

oughtlessabou

tinfl

ationim

pact

3083

30

30

0739

3195

30

30

0798

4Incorrectestim

ationabou

tprojectinvestment

325

30

30

0526

3229

30

30

0515

6Incorrectestim

ationabou

tInvestmentreturn

3167

30

30

0559

3125

30

30

064

6Th

oughtlessabou

tfinancingdifficulty

325

30

30

0526

3083

30

30

0739

7Governm

entp

olicychanges

3417

30

30

0767

35

30

30

0744

8Lack

ofexternalexpertsc

onsultatio

n3167

30

30

0695

3229

30

30

0515

9Th

oughtlessabou

tprojectim

pact

3167

30

30

0559

3125

30

30

064

10Wrong

decisio

n-makingprocesso

rmetho

d3688

30

30

0829

3396

30

30

0792

Designsta

ge

11Inabilityor

inexperie

nceo

fdesignteam

3167

30

30

0559

3125

30

30

064

12Lack

offield

investigationandno

tadjustin

gmeasurestolocalcon

ditio

ns325

30

30

0526

3229

30

30

0515

13Insufficientcom

mun

icationbetweendesig

nera

ndow

ner

3167

30

30

0559

3021

30

30

0699

14Lack

ofinno

vatio

nandapplicabilityof

desig

nplan

364

630

30

0812

3833

40

30

0834

15Lack

ofdesig

nersrsquofullp

artic

ipation

302

30

30

0699

3229

30

30

0515

Con

structio

nsta

ge

16Instabilityof

safetyequipm

entp

erform

ance

3166

30

30

0695

3124

30

30

064

17Financingdifficulty

orris

ingcosts

325

30

30

0526

3229

30

30

0515

18Im

proved

environm

entalprotectionrequ

irementson

constructio

nsite

3164

30

30

0559

3123

30

30

064

19Materialsandequipm

entsup

plyno

tintim

e325

30

30

0526

3229

30

30

0515

20Lack

ofexperie

nced

constructio

nperson

nel

325

30

30

0526

3146

30

30

0772

21Inabilityor

irrespo

nsibilityof

contractors

3333

30

30

0519

3271

30

30

0536

22Inabilityor

irrespo

nsibilityof

superviso

rs325

30

30

0526

3229

30

30

0515

23Non

timely

fund

ing

3833

40

30

0883

3896

40

40

0831

24Materialpric

eincrease

3375

30

30

0489

3292

30

30

0504

26Lack

ofscientificc

onstr

uctio

nprocessa

ndmetho

d3771

40

40

0857

3833

40

30

0808

26Legald

isputes

ofrelated

subject

3374

30

30

0489

3291

30

30

0504

27Worsening

socialordero

fprojectarea

3333

30

30

0519

3271

30

30

0536

28Opp

osition

andob

structionto

projectcon

struction

3125

30

30

0703

3958

40

30

0824

29Lack

ofgood

commun

icationandcoop

erationam

ongsubjects

3917

40

30

0821

375

40

30

0863

30Ba

dweather

ormajor

naturald

isaste

rs2958

30

30

0713

3875

40

30

0841

Operatio

nsta

ge

31Trialoperatio

neffectcan

notm

eetthe

desig

nrequ

irements

3083

30

30

0739

3125

30

30

064

32Instabilityof

equipm

entp

erform

ance

325

30

30

0526

3229

30

30

0515

33Speedy

techno

logy

andequipm

entrenew

al3373

30

30

0489

3290

30

30

0504

34Techno

logy

andequipm

entm

aintenance

isno

ttim

ely3333

30

30

0519

3271

30

30

0536

36Risin

gop

eratingcosts

3083

30

30

0739

3188

30

30

0798

36Sudd

enevents

2979

30

30

0699

3292

30

30

0504

36Major

naturald

isaste

rs2958

30

30

0713

3917

40

30

0846

37Lack

ofac

lear

accoun

tabilitysyste

m3371

30

30

0489

3289

30

30

0504

38Lack

ofop

erationmanagem

ento

rexp

eriences

3333

30

30

0519

3271

30

30

0536

Complexity 5

Table 3 Main risk factors sequence through the whole life cycle of a major infrastructure project

Importancesequence Project risk factors Probability

averageSeverityaverage

Probabilityaverage times

Severity average1 Incorrect project orientation 3833 3896 14934 Incorrect market demand forecasting 3958 3646 144334 Thoughtless about inflation impact 3083 3195 98520 Incorrect estimation about project investment 325 3229 104929 Incorrect estimation about return on investment (ROI) 3167 3125 99028 Thoughtless about financing difficulty 325 3083 10029 Incorrect estimation about investment return 3417 35 119626 Thoughtless about financing difficulty 3167 3229 102330 Government policy changes 3167 3125 9907 Lack of external experts consultation 3688 3396 125231 Thoughtless about project impact 3167 3125 990

21 Lack of field investigation and not adjusting measuresto local conditions 325 3229 1049

39 Insufficient communication between designer andowner 3167 3021 957

5 Lack of innovation and applicability of design plan 3646 3833 139837 Lack of designersrsquo full participation 302 3229 97532 Instability of safety equipment performance 3166 3124 98922 Financing difficulty or rising costs 325 3229 1049

33 Improved environmental protection requirements onconstruction site 3164 3123 987

23 Materials and equipment supply not on time 325 3229 104927 Lack of experienced construction personnel 325 3146 102216 Inability or irresponsibility of contractors 3333 3271 10924 Inability or irresponsibility of supervisors 325 3229 10496 Nontimely funding 3188 4083 130212 Material price increase 3375 3292 11113 Lack scientific construction process and method 3771 3833 144513 Legal disputes of related subject 3374 3291 111017 Worsening social order of project area 3333 3271 10908 Opposition and obstruction to project construction 3125 3958 1237

2 Lack good communication and cooperation amongsubjects 3917 375 1469

11 Bad weather or major natural disasters 2958 3875 1146

38 Trial operation effect can not meet the designrequirements 3083 3125 963

25 Instability of equipment performance 325 3229 104914 Speedy technology and equipment renewal 3373 3290 110918 Technology and equipment maintenance is not timely 3333 3271 109035 Rising operating costs 3083 3188 98336 Sudden events 2979 3292 98110 Major natural disasters 2958 3917 115915 Lack of a clear accountability system 3371 3289 110719 Lack of operation management or experiences 3333 3271 1090

6 Complexity

Table 4 Portfolio balanced risk index system of a major infrastructure project

The target layer The primary Risk The secondary risk

The combinational balanced risk

Technical risk (TR)

Lack scientific construction process and method (TR1)Poor creativity and applicability of design plan (TR2)

Speedy technology and equipment (TR3)Inability or irresponsibility of contractors (TR4)

Technology and equipment maintenance is not timely (TR5)

Economic risk (ER)

Nontimely funding (ER1)Material price increase (ER2)

Incorrect market demand forecasting (ER3)Financing difficulty or rising costs (ER4)

Social risk (SR)Opposition and obstruction to project construction (SR1)

Government policy changes (SR2)Worsening social order of project area (SR3)

Natural risk (NR) Major natural disasters (NR1)Bad weather (NR2)

Management risk (MR)

Lack good communication and cooperation among subjects (MR1)Incorrect project orientation (MR2)

Wrong decision-making procedure or method (MR3)Lack of a clear accountability system (MR4)

Legal risk (LR) Contract inadequacy (LR1)Low contracture capability of cooperative enterprise (LR2)

subjective feeling mean of all the main projects concerningrisk 119894 and the ratio of the intermediate value if the subject ofsubjective evaluation is over the median 3 the psychologicaleffect is amplified or the project risk is narrowed and viceversa)

The source data of 119875119894 119881119894 119865119894 are scoring risk probabilityobjective severity and subjective feeling on a related projectby five-mark scoring to obtain the scores 119875119894 119881119894 119865119894 andthen use SPSS software to calculate the mean 119875119894 119881119894 119865119894

The fuzzy evaluation principle is as follows for riskprobability five-mark scoring ranges from 1 = extremelyunlikely 2 = slim chance 3 = certain possibility 4 = highpossibility and 5 =most likely for objective severity five-markscoring ranges from 1 = the influence of the objective value ofthe project can be ignored 2 = slightly 3 = generally serious4 = serious and 5 = very serious for subjective feelings five-mark scoring ranges from 1 = psychological negative impact isvery small and completely tolerable 2 = psychological negativeinfluence is small and tolerable 3 = appropriate psychologicalnegative influence which can be withstood 4 = psychologicalnegative impact is larger and can barely be afforded and 5 =psychological negative effect is very serious and hard to bear[19 20]

43 The Calculation of Risk Classification Risk classificationindex is calculated by weighted averagemethod of each singleindex the formula is in

CRI =119898

sum119894=1

RI119894 times 119908119894 (2)

where CRI is portfolio balanced project risk index RI119894 issingle factor portfolio balanced project risk index 119908119894 aresingle factor weights

44 The Calculation of Portfolio Risk Index The portfoliorisk index is calculated by weighted average method ofnatural social legal economicmanagement and technologyclassification The calculation formula is in

PRI =119899

sum119897=1

119908119897 sdot119898

sum119894=1

RI119894 times 119908119894 (3)

45 Establishment of a Project Risk Index Weight Based onAHP method this includes forming a discriminant matrixfirst by the importance of the comparison between twoindicators at the same level and then calculating the indexweight The specific process is as follows

451 To Build a Project Risk Hierarchical Structure Theproject risk hierarchical structure of risk evaluation indexsystem is shown in Figure 1

452 To Build the Discriminant Matrix and Assignment Theimportance scales and their meaning are shown in Table 5

The discriminant matrix after soliciting opinions fromexperts is shown in Table 6

453 The Calculation and Test of Weight Using the summethod to calculate theweight and to get the arithmeticmean

Complexity 7

e combinational risk index of major infrastructure project

Technical risk Economic risk index Management risk

Target layer A

Rule layer B

Rule layer C Design errors Technic renewal or maintain middot middot middot

middot middot middot

Figure 1 The hierarchy of project risk index

Table 5 The Importance scale

Importancescale Meaning

1Comparison between two factors theformer is equally as important as thelatter

3Comparison between two factors theformer is slightly more important thanthe latter

5Comparison between two factors theformer is obviously more important thanthe latter

7Comparison between two factors theformer is strongly more important thanthe latter

9Comparison between two factors theformer is extremely more important thanthe latter

2 4 6 8 Median value of above judgment

InverseIf the importance percentage of factor 119868and factor 119895 is 119886119894119895 then the importancepercentage of factor 119895 and factor 119868 is 1119886119894119895

Table 6 The discriminant matrix

A B1 B2 B3 B4 B5 B6B1 1 a12 a13 a14 a15 a16B2 a21 1 a23 a24 a25 a26B3 a31 a32 1 a34 a35 a36B4 a41 a42 a43 1 a45 a46B5 a51 a52 a53 a54 1 a56B6 a61 a62 a63 a64 a65 1

of the column vectors as the final weight is shown in (4) Inaddition to limit the deviation of discriminant matrix in acertain range we needed to undertake a consistency check

with CR when CR lt 01 the consistency of discriminantmatrix is acceptable

119882119894 =1119899

119899

sum119895=1

119886119894119895sum119899119896=1 119886119896119897

(4)

5 Example Analyses

The Hong Kong-Zhuhai-Macau Bridge (HZMB) is an over-sized bridge-tunnel project linking Hong Kong Zhuhai andMacau with a total length of 49968 kilometers and a totalinvestment of 729 billion Yuan It is a world-class sea-crossing passageway of national strategic significance Withproject construction projected to be 7 years constructionbegan in December 2009 and will be completed in 2017 Itwill be the worldrsquos longest six-lane driving immersed tunneland in distance the worldrsquos longest sea-crossing bridge-tunnelroad Next we will evaluate and analyze the HZMB using acombinational balanced risk index model

51TheMain Project Risk Identification in Construction PhaseIn addition to the common features every large projectgenerally shares such as large scale tight construction periodhigh level of difficulty and heightened risk the HZMBalso contends with the characteristics of high social atten-tion coconstruction and coadministration by three distinctgovernments and complicated navigation environment con-straints such as white dolphin conservation On the basis ofinvestigation and access to second-hand data it is concludedthat the HZMB construction stages of the main project risksare as follows

511 Technical Risk

(1) Risk of Being Poorly Designed The sea areas of the HZMBare the worldrsquos most important trade channel with extensiveair- and waterways The design height of the bridge cannotbe too low because of the normal passage of tonnage shipsAt the same time the height of the bridge deck and bridge

8 Complexity

tower cannot be too high or it will affect the normal takeoffand landing of planes

(2) Technology Innovation Risk The HZMB project is theconstruction of the worldrsquos longest immersed deep-watertunnel requiring numerous technological innovations Forexample the connection between the bridge and the tunnelrequires an artificial island to be constructed using a groupingof giant round steel cylinders fixed directly onto the seabedand then filled with earth in order to form the man-madeisland For Chinese engineers this is a first endeavor atcreating this type of structure and therefore it includes highlevels of uncertainty

512 Economic Risk

(1) Risk of Nontimely Funding With an investment of over 70billion Yuan the financing of this project has been the subjectof much debate including issues such as who will invest andhow to allocate investment proportion from the decision-making stage to the time when the bridge officially startedThe principal financing risk is whether all involved partiescan provide project construction funds at the appropriatetime

(2) Risk of Rising CostsOn one hand inflation causes a rise inthe price of materials even if it specifies the value adjustingformula in the contract terms it is hard to fully compensatethe loss caused by the rising cost of rawmaterials in the futureOn the other hand the frequent changes of complicatedconstruction conditionswill cause the rise of cost control risk

513 Social Risk

(1) Risk of Regional System Differences The HZMB belongsto the coconstruction and coadministration of three distinctgovernments and involves the policy of ldquoone country twosystemsrdquo The interest orientation of all governments lawsand regulations administrative systems management proce-dures and technical standard requirements vary thereby cre-ating innumerable challenges and difficulties in coordinationefforts

(2) Public-Against-Project Risks The project has a significantimpact on local natural ecological environment and the livesof the public making it easy to trigger social dissatisfactionand opposition if mishandled

514 Natural Risk

(1) Typhoon Risk Typhoons are common in the LingdingyangBay and pass through the South China Sea every year withmore than 200 days a year reporting a wind speed of 6magnitude Consequently the wind action will naturallymove the steel with the same frequency which can produceresonance and cause destructive effects on the bridge

(2) Earthquake Risk Construction of the HZMB faces aserious challenge in the form of an earthquake It is diffi-cult to predict earthquake risk because of complex seabed

structure An earthquake would cause horizontal and verticaldeformation and destruction of the tunnel and differencesin movement and rotation in the tunnel socket joints afterwhich the project would be a total loss

(3) Chloride Salt Corrosion Risk Experiments show that thereinforced concrete will rust under the action of chlorine saltcorrosion and eventually result in cracking and peeling of theconcrete How to ensure a service life of 120 years for thebridge is uncertain

515 Management Risk

(1) Schedule Control Risk The main body construction beganin December 2009 and was projected to be completed by theend of 2016 However whether the project can be completedsmoothly has become a great challenge due to hydrologicaland meteorological factors as well as less effective workingdays

(2) Quality Management Risk The construction project isdifficult with many operation points long duration syn-chronous operation and crossover operation processes Thecomplicatedmeteorology in LingdingyangBay can easily leadto negligence in the quality of management

(3) Safety Management Risk The construction environmentis very poor due to many factors including a large tidalrange quick water flow various flow directions high wavesdeep scour thick soft ground and frequent typhoons thatendanger the safety of the workers and the constructioncreating an environment where injuries and property lossesare probable

516 Legal Risk Thenature of the project attracts an interna-tional financial clique desiring to invest in the form of BOTHowever in view of the different legal systems of MainlandChina Hong Kong and Macao this may involve some legalconflict and blind areas If legal blind areas are used byfinancial clique and some funds are reserved in the contractthe bridge construction may fall into endless legal disputes

52 The Construction of Project Risk Evaluation Index Systemin Construction Stage Based on the above project risks toconstruct a project risk evaluation index system accordingto the AHP method as shown in Table 7 some appropriateadjustments of indexes are made in line with the project

53 Calculation of Portfolio Balanced Risk Index inInitial Construction Stage

531 Probability and Severity Investigation of Project RiskFactors Invite 30 related subjects from the project construc-tion unit as well as investors and government departmentsin order to score the probability severity objectivity andsubjectivity of single risk factor in the HZMB constructionstage and then calculate the average by SPSS170

Complexity 9

Table 7 Risk evaluation index system in construction stage

Primary index Secondary index Third-grade index

The CTR of theHZMB inconstructionstage

Technical risk (R1)Risk of being poorly designed (R11)Innovation risk (R12)

Economic risk (R2)Risk of nontimely funding (R21)The risk of rising costs (R22)

Social risk (R3)The risk of regional system differences (R31)The public against risks (R32)

Nature risk (R4)Typhoon risk (R41)Earthquake risk (R42)Chloride salt corrosion risk (R43)

Management risk (R5)Schedule control risk (R51)Quality management risk (R52)Safety management risk (R53)

Legal risk (R6) Legal conflict or blind area risk (R61)

Table 8 Three-dimensional evaluation data of single risk factor in the HZMB initial construction stage

Stage Sequence Risk factors Average valueof probability

Average valueof objectseverity

Average valueof subjectfeeling

Initial con-structionstage

1 Risk of being poorly designed (R11) 217 365 3422 Innovation risk (R12) 252 348 3073 Risk of nontimely funding (R21) 208 416 3664 The risk of rising costs (R22) 321 323 2775 The risk of regional system differences (R31) 278 235 2476 The public against risks (R32) 156 372 3987 Typhoon risk (R41) 345 403 3868 Earthquake risk (R42) 106 475 4679 Chloride salt corrosion risk (R43) 272 325 30910 Schedule control risk (R51) 291 276 29211 Quality management risk (R52) 185 449 43312 Safety management risk (R53) 204 416 40813 Legal conflict or blind area risk (R61) 211 353 316

532 Calculation of Single Risk Factor Parameter Calculaterespectively probability objective severity and subjectivefeeling coefficient of a single factor according to the surveyresults in Table 8 and the equation in Section 42 as shown inTable 9

533 Calculation of Classification and Portfolio Risk IndexUse weighted addition to obtain project risk classificationindex according to single risk factor index shown in Table 10and obtain portfolio risk index in the same way thencalculate index weight by AHP method the final results areshown in Table 10

54 The Calculation of Risk Index in Medium-Term Con-struction Stage Calculate the classification and portfolio risk

index of the HZMB inmedium-term according to the above-mentioned method to reorganize investigation and collectbasic data as shown in Table 11

55 Comparative Analysis of Project Risk Index in Early-and Mid-Construction The portfolio balanced project riskindex in early 2010 and middle 2012 is obtained throughthe above-mentioned calculation as shown in Table 12 Itis clear that the portfolio balanced project risk index fall isvery obvious and technology risk index and managementrisk index decrease dramatically which is in accord with ourintuitive understanding

The combinational balanced risk index of this project in2010 was 038 showing if all kinds of risk factors were notwell controlled or changed about 38 expected value will

10 Complexity

Table 9 Single risk factor parameter and coefficient of the HZMB in initial construction stage

Stages Sequence Risk factor Probability coefficientObjectiveseverity

coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter

Initialconstructionstage

1 Risk of being poorly designed (R11) 043 073 114 0362 Innovation risk (R12) 050 070 102 0363 Risk of nontimely funding(R21) 042 083 122 0434 The risk of rising costs (R22) 064 065 092 0385 The risk of regional system differences (R31) 056 047 082 0226 The public against risks (R32) 031 074 133 0317 Typhoon risk (R41) 069 081 129 0728 Earthquake risk (R42) 021 095 156 0319 Chloride salt corrosion risk (R43) 054 065 103 03610 Schedule control risk (R51) 058 055 097 03111 Quality management risk (R52) 037 090 144 04812 Safety management risk (R53) 041 083 136 04613 Legal conflict or blind area risk (R61) 042 071 105 031

Table 10 The classification and portfolio risk index of the HZMB in initial construction stage

Primaryindex

Secondary index Third-grade indexRisk name Index Weight Risk name Index Weight

Portfoliorisk indexof theHZMB ininitial con-structionstagePRI = 038

Technical risk 036 0212Risk of being poorly

designed (R11)036 0667

Innovation risk (R12) 036 0333

Economic risk 041 0137Risk of nontimely funding

(R21)043 0667

The risk of rising costs (R22) 038 0333

Social risk 027 0162The risk of regional system

differences (R31)022 050

The public against risks(R32)

031 050

Nature risk 048 0116Typhoon risk (R41) 072 0387

Earthquake risk (R42) 031 0412Chloride salt corrosion risk

(R43)036 0201

Management risk 044 0265Schedule control risk (R51) 031 0227Quality management risk

(R52)048 0538

Safety management risk(R53)

046 0235

Legal risk 031 0108 Legal conflict or blind arearisk (R61)

031 100

be lost after their interaction The combinational balancedrisk index in 2012 was 015 showing only about 15 projectscould not achieve expected value The main reason for thesedramatic declines is that related subjects accumulate substan-tial knowledge and experience and significantly improve theknowledge level and behavior ability during the constructionprocess In addition after a running-in period the cooper-ation relationship between subjects is effectively improvedMoreover the subjects actively explore and innovate in areassuch as technology research and development plan design

government cooperationmechanism and international BOTfinancing and formulate a series of effective countermea-sures such as (1) largely eliminating and weakening theforce between the seismic energy by using polymer rubbermaterials (2) developing high-performance concrete to resistthe erosion from chlorine salt on concrete in sea water (3)devising a creative installation method to ensure that thecrane tower height is less than 120 meters (4) establishinga coordination team led by the National Development andReform Commission to eliminate organizational difficulties

Complexity 11

Table 11 Classification and portfolio risk index of the HZMB in medium-term construction stage

Primaryindex


Portfoliorisk indexof theHZMB inmedium-term con-structionstagePRI = 015





(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100

Table 12 The portfolio balanced risk comparison of the HZMB in initial and medium-term construction stage

119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index

Management riskindex

Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015

arising from three governments and the risks brought onby varying legal demands and management systems and(5) inviting lawyers familiar with international BOT legalbusiness to study the contract details risk control and so on

56 Early Warning Analysis of Project Risk Index In order todynamically monitor and analyze early warning project riskswe can set the risk index threshold through the investigationof the risk bearing capacity and the degree of acceptance ofthe risk by the subjects combined with the risk loss anddivide different levels of risk early warning intervals andset up corresponding risk countermeasures [21] as shownin Table 13 in order to ensure the appropriate measures beinitiated according to the level of risk

This study shows that the portfolio balanced risk index ofthe HZMB reaches above the orange line in initial construc-tion stage while it drops below the orange line and enters arelative safety area in the median-term construction

6 Conclusion and Discussion

In this article a combination of behavioral science question-nairemethod statistical analysis and fuzzy evaluation is used

to construct a portfolio balanced index model in order todynamically evaluate the risk factors of major infrastructureprojects and to measure the combined loss of project riskto project subjects PBIM is an effective and powerful toolfor risk evaluation and monitoring of major infrastructureprojects Our conclusions are as follows

(1) From the perspective of project entity utility the riskof major infrastructure projects is not only related to theprobability of occurrence of project risks loss of objectivevalue caused by risks but also to the risk bearing capacityemotional factors and psychological utility of the projectsubjects These factors need to be systematically balancedconsidered and measured in combination so as to fullyevaluate the overall value loss of the project risk

(2) A project risk index constructed on the basis ofportfolio balanced evaluation has strong inclusiveness Thisis accomplished through questionnaires and scenario inves-tigation of the multiproject related subjects the selectionof project risk index and the design of relevant parametersreflecting the collective value preference of multiproject sub-jects multiple psychological utility and behavioral strategyinteraction factors and eliminating the limitations of a singlesubject closed evaluation of project risk

12 Complexity

Table 13 Early warning level of project risk index

Portfoliobalanced riskindex

Qualitative description of the project riskseverity Early warning level and coping strategy

Above 040 The risk is very serious and the overallvalue may result in significant loss

Red warning interval first-gradepowerful measures are taken to controland resolve risk

[030 040] The risk is comparatively serious and theoverall value may result in great loss

Orange warning interval secondarymeasures are taken to control and resolverisk

[020 030] The risk is generally serious and theoverall value may result in great loss

Yellow warning interval three-grademeasures are taken to control and resolverisks

[010 020]The risk is comparatively mild and thechance that the overall value deviatingfrom the expected goal is minimal

A relatively safe interval analyze thecause of risks and verify risk controlmeasures

Below 01The risk is comparatively mild and thechance of the overall value deviating fromthe expected goal is very minimal

Safe interval analyze the cause of risks

(3) The combined equilibrium risk index is simple andintuitive for reflecting the size of the project risk whichcan directly compare the risks of different projects and thesame project in different periods not only to determine therelevance of the main project feasibility and the size of thepotential risk in order to provide an effective analysis toolbut also according to the Early Warning Interval of Projectrisk index to help the project in relation to the main controland resolving of risk

(4) The main body of the major infrastructure projecthas complex risk evaluation decision motive this includesavoidance of their own risk for self-interest motive needs butalso an interactive fairness and altruism motive whereby themotivation to evaluate project risk is a complex preferenceset This preference set affects the evaluation decision of thesubject For this reason the preference set of the multipleproject subjects can be displayed by means of group survey

It should be noted that we principally used fuzzy math-ematics and the questionnaire method to evaluate the riskfactors of major infrastructure projects and these methodshave certain imprecision and subjectivity However thisprocedure is consistent with the characteristics of majorinfrastructure project risk and behavior decision-makingand is also a scientific approach In the next study we willshorten the observation time for specific projects extractmore comprehensive data and conduct amore detailed studyof the evolution of a project risk index

Conflicts of Interest

The authors declare that there are no conflicts of interestregarding the publication of this paper

Acknowledgments

This paper is funded by NNSF of China (71171203 71671187)and Natural Science Foundation of Hunan Province(2015JJ2025)

References

[1] B Du X Liu andWQiu ldquoRisk indexmodeling and simulationanalysis for engineering projectrdquo Science amp Technology Progressand Policy no 21 pp 81ndash84 2009

[2] Z-Q Hou and Y-M Zeng ldquoResearch on risk assessmenttechnology of themajor hazard in harbor engineeringrdquoProcediaEngineering vol 137 pp 843ndash848 2016

[3] J Chen and Y Yang ldquoA predictive risk index for safety perfor-mance in process industriesrdquo Journal of Loss Prevention in theProcess Industries vol 17 no 3 pp 233ndash242 2004

[4] L He and Y Chen ldquoA risk index evaluationmethod for express-way traffic network interruption causerdquo Journal of DalianMaritime University no 3 pp 69ndash72 2012

[5] C Dai L Wang and M Huang ldquoRisk assessment of urbantunnel constructionrdquo Journal of Beijing Technology Universityno 2 pp 250ndash256 2012

[6] J Park B Park Y Cha and C Hyun ldquoRisk factors assess-ment considering change degree for mega-projectsrdquo Social andBehavioral Sciences vol 218 pp 50ndash55 2016

[7] P Li and J Zhu ldquoLarge-scale group decision making methodbased on new intuitionistic fuzzy similarityrdquo OperationsResearch and Management Science vol 23 no 2 pp 167ndash1742014

[8] X Liu J Zhu and F Liu ldquoRelative shangqun decision methodfor interval number of uncertain preference schemesrdquo ChineseJournal of Management Science vol 22 no 6 2014

[9] Y Liu ldquoThe influences of the role of decision-makers and relatedfactors on risk preferencerdquo Psychological Science no 3 pp 548ndash551 2010

[10] H Bleichrodt ldquoReference-dependent expected utility withincomplete preferencesrdquo Journal of Mathematical Psychologyvol 53 no 4 pp 287ndash293 2009

[11] P Conceicao and R Bandro ldquoSubjective well-being researchliterature reviewrdquo Foreign Theoretical Trends no 7 pp 10ndash122013

[12] S Teyssier ldquoInequity and risk aversion in sequential public goodgamesrdquo Public Choice vol 151 no 1-2 pp 91ndash119 2012

Complexity 13

[13] K Schurter and B JWilson ldquoJustice and fairness in the dictatorgamerdquo Southern Economic Journal vol 76 no 1 pp 130ndash1452009

[14] X Yuan Y Ke and S Wang ldquoCase-based analysis of the mainrisk factors of PPP projects in Chinardquo Chinese Soft Science no5 pp 107ndash113 2009

[15] X Qin and L Jing ldquoRisk assessment and analysis of greenbuilding life cycle the exploration based onquestionnairerdquoCivilEngineering Journal no 8 pp 123ndash135 2013

[16] P Guo ldquoResearch on the portfolio risk of high-tech projectsbased on project interactionrdquo Science and Technology Manage-ment no 6 pp 5ndash9 2009

[17] H-N Zhu X-Z Yuan G-M Zeng et al ldquoEcological riskassessment of heavy metals in sediments of Xiawan port basedon modified potential ecological risk indexrdquo Transactions ofNonferrous Metals Society of China vol 22 no 6 pp 1470ndash14772012

[18] J J Drewry L T H Newham and R S B Greene ldquoIndexmodels to evaluate the risk of phosphorus and nitrogen loss atcatchment scalesrdquo Journal of Environmental Management vol92 no 3 pp 639ndash649 2011

[19] Y Gao H Li and G Zhang ldquoDynamic fuzzy evaluation ofproject risk based on cooperationrdquo Journal of Dalian TechnologyUniversity no 3 pp 404ndash408 2010

[20] Y Yuan ldquoMulti-criteria decision-making model based oninterval-valued intuitionistic fuzzy number correlation coeffi-cientrdquo Journal of Management Sciences no 4 pp 11ndash18 2014

[21] R Liu X Liu M Rong and X Qing ldquoRisk assessment methodof government investment project governancerdquo Soft Science no2 pp 29ndash35 2011

Submit your manuscripts athttpswwwhindawicom

Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014

MathematicsJournal of


Mathematical Problems in Engineering

Hindawi Publishing Corporationhttpwwwhindawicom

Differential EquationsInternational Journal of

Volume 2014

Applied MathematicsJournal of


Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014

Journal of


Mathematical PhysicsAdvances in

Complex AnalysisJournal of


OptimizationJournal of


CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014

International Journal of


Operations ResearchAdvances in

Journal of


Function Spaces

Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014

International Journal of Mathematics and Mathematical Sciences


The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014


Algebra

Discrete Dynamics in Nature and Society



Decision SciencesAdvances in

Journal of


Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014

Stochastic AnalysisInternational Journal of

2 Complexity

construct risk evaluation index system and design indexweight by analytic hierarchy process (3) to build a project riskportfolio balance evaluation model and add main psycholog-ical effect factors based on traditional two-dimensional eval-uation which can make up the limitations of the evaluationof project risk material loss and at the same time make theproject risk assessment have subjective and objective char-acteristics and (4) to do questionnaire survey in fuzzy eval-uation of project risk parameters The average data reflectsa collection of plural value preference which can effectivelymake up disadvantages of single subject evaluation andmakeproject risk assessment into a group of decision-makingbehaviors A project risk index can not only make valueloss explicit and comparable but can also provide evidenceto analyze and offer reasons for project changes and riskstrategy

2 The Theoretical Basis of MajorInfrastructure Project Portfolio BalanceRisk Index Model Construction

The risk portfolio balance index model of major infras-tructure projects must be based on multidimensional valueimpact and evaluation of complex decision-making motiva-tion analysis because they jointly determine game designideas of model parameters and a combined calculationmethod of risk index

21 The Subjective and Objective Value of Project Risk ImpactAnalysis General project risk evaluation only considers theprobability of occurrence and the objective severity howeverproject risk bears the characteristics of subjectivity andobjectivity Risk is the result of subjective evaluation whereineven the same project risk has different implications fordifferent subject [9] As a result subject factors must beconsidered in risk assessment The aim of rational behaviorsubject is to pursue comprehensive utility maximization [10]instead of simple profit maximization

Project risk evaluation should not only consider objectivevalue losses but also measure the damage to the subjectitself and othersrsquo well-being and satisfaction [11] Thereforea three-dimensional evaluation method used in project riskassessment (probability + objective severity + subjectiveutility loss) is a more scientific approach than the usualtwo-dimensional evaluation method (probability + objectiveseverity) Objective loss refers to material loss caused byproblems to project value such as a decrease of project qualityconstruction schedule delay safety performance degradationprofit reduction and rising costs Subjective utility cost refersto all types of emotional damage and the subjective judgmentvalue decline led by the risk to project subject Emotionaldamage includes psychological fear anxiety frustration dis-content injustice and impatience

22The Complex Psychological Motivation Analysis of Evalua-tion Subject Behavioral economics describes associated sub-jects of major infrastructure projects as ldquocomplex economicmenrdquo They have many preferences including risk aversion

altruism and fairness preference When evaluating projectrisk they not only consider their own risk losses but also takethe risk of other associated subjects into account They notonly consider thematerial loss brought on by the risk but alsoconsider psychology utility loss A project subject is basedon a complex collection of preferences when making riskassessment decisions [12 13] In order to validate the aboveviewpoint the questionnaire shown in Table 1 investigates thecomplex evaluation motivation of a project subject

Issuing 100 questionnaires to related subjects of majorinfrastructure project in a mobile Internet platform we had96 valid questionnaires returned indicating that 96 ofrespondents would both consider the social environmentaland ecological value loss while only 4 of respondentsreported they would only consider the economic loss Ofrespondents 89 stated they would also consider personalemotion risk capacity and psychological disutility and only11 of the respondents would merely consider material lossOf respondents 82 said they would consider the interestand feelings of other related subjects while only 18 reportedthey would consider only their own interest loss and subjec-tive feeling 98 of respondents indicated they would bothconsider other related subjectsrsquo behavior strategy reactionsand only 2 of the respondents would only consider theirown behavior strategy The survey suggests that most relatedsubjects would consider economic social environmentaland ecological value loss nonmaterial psychological utilitycost and behavior strategy reactions of correlation subjectsTherefore building a framework which contains factors suchas risk probability objective severity and psychological utilityloss makes the interactive equilibrium evaluation a morereasonable and scientific approach

3 Construction of a Project Risk PortfolioBalance Evaluation Index System of a MajorInfrastructure Project

The construction of an evaluation index system is the key tocalculating a project risk index and to screen and sort riskfactors within the whole life cycle of a major infrastructureproject based on many case studies and questionnaires Theobjective is to use the principles of importance representa-tiveness and conciseness and to select appropriate main riskfactors in order to form a project risk evaluation index systemaccording to the nature of the classification

(1) Questionnaire and Statistical Analysis of Project RiskFactors Screening First the main risk factors based on manycase studies throughout the life cycle of major infrastructureprojects are listed [14] Then the project risk factors list issent to the related subjects for their additional inclusions ormodifications in order to determine the main project riskfactors which are established after 2-3 rounds of feedbackand changes Finally respondents would score the occurrenceprobability and severity of risk factors by five-mark scoringFor the occurrence probability of risk factors five-markscoring ranges are as follows 1 = extremely unlikely 2 = slimchance 3 = certain possibility 4 = high possibility and 5 =most

Complexity 3


















RI119894 = 119891 (119875119894 119881119894 119865119894) = 1198751015840119894 times 1198811015840119894 times 1198651015840119894 (1)


4 Complexity

Table2Survey

results

ofmainris

kfactorsthrou

ghthew

holelifec

ycleof

amajor

infrastructure

project

Stages

Sequ

ence

number

Risk

factors

Occurrencep

robability

Severity

Mean

Median

Mod

eStandard

deviation

Mean

Median

Mod

eSD

Decision

stage

1Incorrectp

rojectorientation

3188

30

30

0734

4083

40

40

0767

2Incorrectm

arketd

emandforecasting

3958

40

30

0824

364

640

40

0911

3Th

oughtlessabou

tinfl

ationim

pact

3083

30

30

0739

3195

30

30

0798

4Incorrectestim

ationabou

tprojectinvestment

325

30

30

0526

3229

30

30

0515

6Incorrectestim

ationabou

tInvestmentreturn

3167

30

30

0559

3125

30

30

064

6Th

oughtlessabou


325

30

30

0526

3083

30

30

0739

7Governm

entp

olicychanges

3417

30

30

0767

35

30

30

0744

8Lack

ofexternalexpertsc

onsultatio

n3167

30

30

0695

3229

30

30

0515

9Th

oughtlessabou

tprojectim

pact

3167

30

30

0559

3125

30

30

064

10Wrong

decisio

n-makingprocesso

rmetho

d3688

30

30

0829

3396

30

30

0792

Designsta

ge

11Inabilityor

inexperie

nceo

fdesignteam

3167

30

30

0559

3125

30

30

064

12Lack

offield

investigationandno

tadjustin

gmeasurestolocalcon

ditio

ns325

30

30

0526

3229

30

30

0515

13Insufficientcom

mun

icationbetweendesig

nera

ndow

ner

3167

30

30

0559

3021

30

30

0699

14Lack

ofinno

vatio

nandapplicabilityof

desig

nplan

364

630

30

0812

3833

40

30

0834

15Lack

ofdesig

nersrsquofullp

artic

ipation

302

30

30

0699

3229

30

30

0515

Con

structio

nsta

ge

16Instabilityof

safetyequipm

entp

erform

ance

3166

30

30

0695

3124

30

30

064


orris

ingcosts

325

30

30

0526

3229

30

30

0515

18Im

proved

environm

entalprotectionrequ

irementson

constructio

nsite

3164

30

30

0559

3123

30

30

064


entsup

plyno

tintim

e325

30

30

0526

3229

30

30

0515

20Lack

ofexperie

nced

constructio

nperson

nel

325

30

30

0526

3146

30

30

0772

21Inabilityor

irrespo

nsibilityof

contractors

3333

30

30

0519

3271

30

30

0536

22Inabilityor

irrespo

nsibilityof

superviso

rs325

30

30

0526

3229

30

30

0515

23Non

timely

fund

ing

3833

40

30

0883

3896

40

40

0831

24Materialpric

eincrease

3375

30

30

0489

3292

30

30

0504

26Lack

ofscientificc

onstr

uctio

nprocessa

ndmetho

d3771

40

40

0857

3833

40

30

0808

26Legald

isputes

ofrelated

subject

3374

30

30

0489

3291

30

30

0504

27Worsening

socialordero

fprojectarea

3333

30

30

0519

3271

30

30

0536

28Opp

osition

andob

structionto

projectcon

struction

3125

30

30

0703

3958

40

30

0824

29Lack

ofgood

commun

icationandcoop

erationam

ongsubjects

3917

40

30

0821

375

40

30

0863

30Ba

dweather

ormajor

naturald

isaste

rs2958

30

30

0713

3875

40

30

0841

Operatio

nsta

ge

31Trialoperatio

neffectcan

notm

eetthe

desig

nrequ

irements

3083

30

30

0739

3125

30

30

064

32Instabilityof

equipm

entp

erform

ance

325

30

30

0526

3229

30

30

0515

33Speedy

techno

logy

andequipm

entrenew

al3373

30

30

0489

3290

30

30

0504

34Techno

logy

andequipm

entm

aintenance

isno

ttim

ely3333

30

30

0519

3271

30

30

0536

36Risin

gop

eratingcosts

3083

30

30

0739

3188

30

30

0798

36Sudd

enevents

2979

30

30

0699

3292

30

30

0504

36Major

naturald

isaste

rs2958

30

30

0713

3917

40

30

0846

37Lack

ofac

lear

accoun

tabilitysyste

m3371

30

30

0489

3289

30

30

0504

38Lack

ofop

erationmanagem

ento

rexp

eriences

3333

30

30

0519

3271

30

30

0536

Complexity 5















6 Complexity




Technical risk (TR)




Economic risk (ER)














CRI =119898

sum119894=1

RI119894 times 119908119894 (2)



PRI =119899

sum119897=1

119908119897 sdot119898

sum119894=1

RI119894 times 119908119894 (3)






Complexity 7



Target layer A

Rule layer B

















119882119894 =1119899

119899

sum119895=1

119886119894119895sum119899119896=1 119886119896119897

(4)

5 Example Analyses



511 Technical Risk


8 Complexity



512 Economic Risk



513 Social Risk



514 Natural Risk





515 Management Risk








Complexity 9






















10 Complexity



coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter




Primaryindex







(R21)043 0667





031 050



(R43)036 0201


(R52)048 0538


046 0235


031 100



Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




Complexity 3


















RI119894 = 119891 (119875119894 119881119894 119865119894) = 1198751015840119894 times 1198811015840119894 times 1198651015840119894 (1)


4 Complexity

Table2Survey

results

ofmainris

kfactorsthrou

ghthew

holelifec

ycleof

amajor

infrastructure

project

Stages

Sequ

ence

number

Risk

factors

Occurrencep

robability

Severity

Mean

Median

Mod

eStandard

deviation

Mean

Median

Mod

eSD

Decision

stage

1Incorrectp

rojectorientation

3188

30

30

0734

4083

40

40

0767

2Incorrectm

arketd

emandforecasting

3958

40

30

0824

364

640

40

0911

3Th

oughtlessabou

tinfl

ationim

pact

3083

30

30

0739

3195

30

30

0798

4Incorrectestim

ationabou

tprojectinvestment

325

30

30

0526

3229

30

30

0515

6Incorrectestim

ationabou

tInvestmentreturn

3167

30

30

0559

3125

30

30

064

6Th

oughtlessabou


325

30

30

0526

3083

30

30

0739

7Governm

entp

olicychanges

3417

30

30

0767

35

30

30

0744

8Lack

ofexternalexpertsc

onsultatio

n3167

30

30

0695

3229

30

30

0515

9Th

oughtlessabou

tprojectim

pact

3167

30

30

0559

3125

30

30

064

10Wrong

decisio

n-makingprocesso

rmetho

d3688

30

30

0829

3396

30

30

0792

Designsta

ge

11Inabilityor

inexperie

nceo

fdesignteam

3167

30

30

0559

3125

30

30

064

12Lack

offield

investigationandno

tadjustin

gmeasurestolocalcon

ditio

ns325

30

30

0526

3229

30

30

0515

13Insufficientcom

mun

icationbetweendesig

nera

ndow

ner

3167

30

30

0559

3021

30

30

0699

14Lack

ofinno

vatio

nandapplicabilityof

desig

nplan

364

630

30

0812

3833

40

30

0834

15Lack

ofdesig

nersrsquofullp

artic

ipation

302

30

30

0699

3229

30

30

0515

Con

structio

nsta

ge

16Instabilityof

safetyequipm

entp

erform

ance

3166

30

30

0695

3124

30

30

064


orris

ingcosts

325

30

30

0526

3229

30

30

0515

18Im

proved

environm

entalprotectionrequ

irementson

constructio

nsite

3164

30

30

0559

3123

30

30

064


entsup

plyno

tintim

e325

30

30

0526

3229

30

30

0515

20Lack

ofexperie

nced

constructio

nperson

nel

325

30

30

0526

3146

30

30

0772

21Inabilityor

irrespo

nsibilityof

contractors

3333

30

30

0519

3271

30

30

0536

22Inabilityor

irrespo

nsibilityof

superviso

rs325

30

30

0526

3229

30

30

0515

23Non

timely

fund

ing

3833

40

30

0883

3896

40

40

0831

24Materialpric

eincrease

3375

30

30

0489

3292

30

30

0504

26Lack

ofscientificc

onstr

uctio

nprocessa

ndmetho

d3771

40

40

0857

3833

40

30

0808

26Legald

isputes

ofrelated

subject

3374

30

30

0489

3291

30

30

0504

27Worsening

socialordero

fprojectarea

3333

30

30

0519

3271

30

30

0536

28Opp

osition

andob

structionto

projectcon

struction

3125

30

30

0703

3958

40

30

0824

29Lack

ofgood

commun

icationandcoop

erationam

ongsubjects

3917

40

30

0821

375

40

30

0863

30Ba

dweather

ormajor

naturald

isaste

rs2958

30

30

0713

3875

40

30

0841

Operatio

nsta

ge

31Trialoperatio

neffectcan

notm

eetthe

desig

nrequ

irements

3083

30

30

0739

3125

30

30

064

32Instabilityof

equipm

entp

erform

ance

325

30

30

0526

3229

30

30

0515

33Speedy

techno

logy

andequipm

entrenew

al3373

30

30

0489

3290

30

30

0504

34Techno

logy

andequipm

entm

aintenance

isno

ttim

ely3333

30

30

0519

3271

30

30

0536

36Risin

gop

eratingcosts

3083

30

30

0739

3188

30

30

0798

36Sudd

enevents

2979

30

30

0699

3292

30

30

0504

36Major

naturald

isaste

rs2958

30

30

0713

3917

40

30

0846

37Lack

ofac

lear

accoun

tabilitysyste

m3371

30

30

0489

3289

30

30

0504

38Lack

ofop

erationmanagem

ento

rexp

eriences

3333

30

30

0519

3271

30

30

0536

Complexity 5















6 Complexity




Technical risk (TR)




Economic risk (ER)














CRI =119898

sum119894=1

RI119894 times 119908119894 (2)



PRI =119899

sum119897=1

119908119897 sdot119898

sum119894=1

RI119894 times 119908119894 (3)






Complexity 7



Target layer A

Rule layer B

















119882119894 =1119899

119899

sum119895=1

119886119894119895sum119899119896=1 119886119896119897

(4)

5 Example Analyses



511 Technical Risk


8 Complexity



512 Economic Risk



513 Social Risk



514 Natural Risk





515 Management Risk








Complexity 9






















10 Complexity



coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter




Primaryindex







(R21)043 0667





031 050



(R43)036 0201


(R52)048 0538


046 0235


031 100



Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




4 Complexity

Table2Survey

results

ofmainris

kfactorsthrou

ghthew

holelifec

ycleof

amajor

infrastructure

project

Stages

Sequ

ence

number

Risk

factors

Occurrencep

robability

Severity

Mean

Median

Mod

eStandard

deviation

Mean

Median

Mod

eSD

Decision

stage

1Incorrectp

rojectorientation

3188

30

30

0734

4083

40

40

0767

2Incorrectm

arketd

emandforecasting

3958

40

30

0824

364

640

40

0911

3Th

oughtlessabou

tinfl

ationim

pact

3083

30

30

0739

3195

30

30

0798

4Incorrectestim

ationabou

tprojectinvestment

325

30

30

0526

3229

30

30

0515

6Incorrectestim

ationabou

tInvestmentreturn

3167

30

30

0559

3125

30

30

064

6Th

oughtlessabou


325

30

30

0526

3083

30

30

0739

7Governm

entp

olicychanges

3417

30

30

0767

35

30

30

0744

8Lack

ofexternalexpertsc

onsultatio

n3167

30

30

0695

3229

30

30

0515

9Th

oughtlessabou

tprojectim

pact

3167

30

30

0559

3125

30

30

064

10Wrong

decisio

n-makingprocesso

rmetho

d3688

30

30

0829

3396

30

30

0792

Designsta

ge

11Inabilityor

inexperie

nceo

fdesignteam

3167

30

30

0559

3125

30

30

064

12Lack

offield

investigationandno

tadjustin

gmeasurestolocalcon

ditio

ns325

30

30

0526

3229

30

30

0515

13Insufficientcom

mun

icationbetweendesig

nera

ndow

ner

3167

30

30

0559

3021

30

30

0699

14Lack

ofinno

vatio

nandapplicabilityof

desig

nplan

364

630

30

0812

3833

40

30

0834

15Lack

ofdesig

nersrsquofullp

artic

ipation

302

30

30

0699

3229

30

30

0515

Con

structio

nsta

ge

16Instabilityof

safetyequipm

entp

erform

ance

3166

30

30

0695

3124

30

30

064


orris

ingcosts

325

30

30

0526

3229

30

30

0515

18Im

proved

environm

entalprotectionrequ

irementson

constructio

nsite

3164

30

30

0559

3123

30

30

064


entsup

plyno

tintim

e325

30

30

0526

3229

30

30

0515

20Lack

ofexperie

nced

constructio

nperson

nel

325

30

30

0526

3146

30

30

0772

21Inabilityor

irrespo

nsibilityof

contractors

3333

30

30

0519

3271

30

30

0536

22Inabilityor

irrespo

nsibilityof

superviso

rs325

30

30

0526

3229

30

30

0515

23Non

timely

fund

ing

3833

40

30

0883

3896

40

40

0831

24Materialpric

eincrease

3375

30

30

0489

3292

30

30

0504

26Lack

ofscientificc

onstr

uctio

nprocessa

ndmetho

d3771

40

40

0857

3833

40

30

0808

26Legald

isputes

ofrelated

subject

3374

30

30

0489

3291

30

30

0504

27Worsening

socialordero

fprojectarea

3333

30

30

0519

3271

30

30

0536

28Opp

osition

andob

structionto

projectcon

struction

3125

30

30

0703

3958

40

30

0824

29Lack

ofgood

commun

icationandcoop

erationam

ongsubjects

3917

40

30

0821

375

40

30

0863

30Ba

dweather

ormajor

naturald

isaste

rs2958

30

30

0713

3875

40

30

0841

Operatio

nsta

ge

31Trialoperatio

neffectcan

notm

eetthe

desig

nrequ

irements

3083

30

30

0739

3125

30

30

064

32Instabilityof

equipm

entp

erform

ance

325

30

30

0526

3229

30

30

0515

33Speedy

techno

logy

andequipm

entrenew

al3373

30

30

0489

3290

30

30

0504

34Techno

logy

andequipm

entm

aintenance

isno

ttim

ely3333

30

30

0519

3271

30

30

0536

36Risin

gop

eratingcosts

3083

30

30

0739

3188

30

30

0798

36Sudd

enevents

2979

30

30

0699

3292

30

30

0504

36Major

naturald

isaste

rs2958

30

30

0713

3917

40

30

0846

37Lack

ofac

lear

accoun

tabilitysyste

m3371

30

30

0489

3289

30

30

0504

38Lack

ofop

erationmanagem

ento

rexp

eriences

3333

30

30

0519

3271

30

30

0536

Complexity 5















6 Complexity




Technical risk (TR)




Economic risk (ER)














CRI =119898

sum119894=1

RI119894 times 119908119894 (2)



PRI =119899

sum119897=1

119908119897 sdot119898

sum119894=1

RI119894 times 119908119894 (3)






Complexity 7



Target layer A

Rule layer B

















119882119894 =1119899

119899

sum119895=1

119886119894119895sum119899119896=1 119886119896119897

(4)

5 Example Analyses



511 Technical Risk


8 Complexity



512 Economic Risk



513 Social Risk



514 Natural Risk





515 Management Risk








Complexity 9






















10 Complexity



coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter




Primaryindex







(R21)043 0667





031 050



(R43)036 0201


(R52)048 0538


046 0235


031 100



Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




Complexity 5















6 Complexity




Technical risk (TR)




Economic risk (ER)














CRI =119898

sum119894=1

RI119894 times 119908119894 (2)



PRI =119899

sum119897=1

119908119897 sdot119898

sum119894=1

RI119894 times 119908119894 (3)






Complexity 7



Target layer A

Rule layer B

















119882119894 =1119899

119899

sum119895=1

119886119894119895sum119899119896=1 119886119896119897

(4)

5 Example Analyses



511 Technical Risk


8 Complexity



512 Economic Risk



513 Social Risk



514 Natural Risk





515 Management Risk








Complexity 9






















10 Complexity



coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter




Primaryindex







(R21)043 0667





031 050



(R43)036 0201


(R52)048 0538


046 0235


031 100



Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




6 Complexity




Technical risk (TR)




Economic risk (ER)














CRI =119898

sum119894=1

RI119894 times 119908119894 (2)



PRI =119899

sum119897=1

119908119897 sdot119898

sum119894=1

RI119894 times 119908119894 (3)






Complexity 7



Target layer A

Rule layer B

















119882119894 =1119899

119899

sum119895=1

119886119894119895sum119899119896=1 119886119896119897

(4)

5 Example Analyses



511 Technical Risk


8 Complexity



512 Economic Risk



513 Social Risk



514 Natural Risk





515 Management Risk








Complexity 9






















10 Complexity



coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter




Primaryindex







(R21)043 0667





031 050



(R43)036 0201


(R52)048 0538


046 0235


031 100



Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




Complexity 7



Target layer A

Rule layer B

















119882119894 =1119899

119899

sum119895=1

119886119894119895sum119899119896=1 119886119896119897

(4)

5 Example Analyses



511 Technical Risk


8 Complexity



512 Economic Risk



513 Social Risk



514 Natural Risk





515 Management Risk








Complexity 9






















10 Complexity



coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter




Primaryindex







(R21)043 0667





031 050



(R43)036 0201


(R52)048 0538


046 0235


031 100



Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




8 Complexity



512 Economic Risk



513 Social Risk



514 Natural Risk





515 Management Risk








Complexity 9






















10 Complexity



coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter




Primaryindex







(R21)043 0667





031 050



(R43)036 0201


(R52)048 0538


046 0235


031 100



Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




Complexity 9






















10 Complexity



coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter




Primaryindex







(R21)043 0667





031 050



(R43)036 0201


(R52)048 0538


046 0235


031 100



Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




10 Complexity



coefficient

Subjectivefeeling

coefficient

Single riskfactor

parameter




Primaryindex







(R21)043 0667





031 050



(R43)036 0201


(R52)048 0538


046 0235


031 100



Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




Complexity 11


Primaryindex







(R21)028 0667





018 050



(R43)014 0201


(R52)018 0538


016 0235


018 100


119879PR

Technicalrisk index

Economicrisk index

Social riskindex

Naturerisk index


Law riskindex

Portfoliorisk index

2010 036 041 027 048 044 031 0382012 017 030 015 032 020 018 015









12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




12 Complexity



















Acknowledgments


References













Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




Complexity 13

















Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of











Volume 2014




Journal of











Journal of


Function Spaces






Algebra





Journal of




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