Importance Of Risk Distribution In Major Construction Projects

1.3 RISK ALLOCATION

Analysis of risk distribution in major construction projects starting with the principles set distribution described by international construction lawyer Max Abrahamson known as "Abrahamson principle". The principles proposed that the contracting parties should bear a risk where:

• The risk is within the party’s control;

• The risk can be transfer by the party, e.g through insurance

• More influential parties control the risk of economic benefits

• to place the risk upon the party in question is in the interests of efficiency, including planning, incentive and innovation efficiency

1.3.1 Objectives of Risk Allocation

Contract is a medium for risk allocation. The contract describes the roles and responsibilities for risk.

Parties must be able to assess, control, and bear the cost of. For example, the risk of labor shortages, damage to the machine, or specific construction techniques, the most suitable given to the contractor to bear the risk. While the risk fund projects or project site most suitable borne by the owner.

After the risk assessment process is discussed, we find that the allocation of risk should be allocated to the most appropriate specific risk is to minimize the risk identified where several distribution proposals will be discussed in this topic. For design, the proposed parties to bear risk is professional design that is architects and engineers. Engineers and architects need to provide suitable design with functionality and usability of Komtar Tower for minimize the risk of such tower. Suitable design can provide comfort to the users of the building. It can also minimize the risk of increased construction costs due to design changes too frequently during the construction stage, which may cause delays in the completion time of the

The owner Komtar Tower, Penang Development Corporation must provide access to the site as soon as possible to avoid delays in the construction supply in to the site. If there are no objections from residents around the project site, the owners also need to resolve the matter as soon as possible in order to avoid delay in the project. Project owner's responsibility to provide a smooth site access in order to avoid the risks that can lead to increased construction costs.

For site conditions, the proposed party responsible for bearing the risk is the owner of Komtar Tower. Owners should make relevant geotechnical investigation to avoid risks during the construction stage due to the inappropriate site. Therefore, an adequate site investigation should be made to compensate avoid inconvenience during the construction