Task III: Risk Management In The Construction Industry

TASK III: RISK MANAGEMENT

The construction industry operates in an immensely uncertain atmosphere where circumstances change according to the complexity of projects. In early stages of the project, the proactive concept of risk management should be initiated to identify and manage risks associated with the project in order to avoid negative impacts on performance. Risk management consists of four main steps: Risk identification, Analysis, Response, and Review. Figure III: Risk Management Process

IDENTIFICATION

The aim of risk identification is to record potential risks to be managed in the project. The risks identified for Atlantis project are cultural, public, force majeure, technical, design, construction, financial (cash

Proper contingency plans should be made in case of risk occurrence, to reduce their consequences.

The ‘high probability/high impact’ risks like financial and operational are those with the most critical consequences and should be addressed on a high priority basis. The consequences will even include the project to fail or be terminated. Proper risk response and strategies should be planned and organized immediately in these situations.

RISK RESPONSE

Risk response indicates the strategies (avoidance, mitigation, transfer, and acceptance) taken depending on the kind of identified risks for the Atlantis project and actions includes

Entering into forwarding contracts, borrowing or depositing funds in foreign currency in order to hedge against significant transactional foreign currency exposure and maintaining good relationships with the incumbent government.

Operating highly complex logistics for delivery, handling, and distribution of materials, temporary utilities, and site labour employing mobilization strategy when the rate of demand is high for equipment and materials and designing structural system of pile

Regulating project review meetings and discussions frequently with main actors, to check progress against KPIs and implement appropriate changes.

Employing in-house talents (Emirates Precast, Select Plant Hire etc), screening of critical sub-contractors for credit-worthiness and assessing rigorously for financial robustness before being contractually engaged, reducing reliance on third parties, involving necessary specialists from fields, drawing well-prepared documentation and bidding requirements, initiating partnering approach for procurement methodologies.

Implementing a detailed set of protocols (Core Process), associated project management approach (Enabling Process), DfMA methodologies and integrated capabilities for greater surety of delivery, executing Building Information Modeling (BIM) and digital engineering technologies for achieving time, cost and quality certainty through full visualization of build