Risk management plan

The purpose of this chapter is to provide an outline of project risk and opportunity,
and a methodology for reducing risk to an acceptable level.
Risk management is an important part of project management. Every construction
project has many different kind of risks, and it is important to identify as many as
possible so that we will be prepared if any unfortunate event occurs.
The procedure or the risk management will be completed as follows. Firstly the
project will be defined and analysed, then the different type of risks will have to be
identified. After the identification of the risks, the risk assessment will begin, then
response for the risks will be developed and finally the risk control can begin.
(Due to the nature of this coursework the risk management plan will be simplified
and assumptions will be made).

.1 Definition of the project

In this section the project will be defined and analysed according to its deliverables
and objectives, and a stakeholder analysis will be done, identifying the stakeholders
and their part.

.1.a Project deliverables

Our responsibility towards the client is to deliver a valid and accurate project delivery
plan, which will present with a realistic way, the construction process of the Buttery
Road Bridge, with the identification of the most important and serious types of risks
including their best solutions. Also the establishment of regulations that will govern
our partnership with the client will be delivered.

.1.b Objectives
Our main objective is to deliver to the client a cost and time efficient and effective
project plan, which will be as close as reasonably possible to the clients demands
and requirements. Ensuring constant communication with the client and all the
stakeholders involved, so that productive and efficient ideas and solutions can be
created throughout the projects life. The realistic objectives of the project can be
subdivided in a knowledge area table and presented as in Table 1.

.1.c Stakeholder analysis

There are 3 different main types of stakeholders, primary, secondary and tertiary.
For the specific construction project, the primary stakeholders, that will affect mostly
the project plan are, our client, Roads UK and all its partners, our company and our
partners, the contractors and the design team, the suppliers and everyone involved

in the contract. The secondary stakeholders are, all the employs involved, the local
authorities and all of the approving bodies involved. Finally the tertiary stakeholders
is the local community, that it is assumed that it wont affect the project plan and the
project risks, since the entire project is conducted to serve the local community and
affects them positively.

Project Management Knowledge Areas

Scope Management
Time Management
Cost Management
Quality Management

Objectives
WBS, Drawing List
CPM, Schedule Bar-chart
Budget, Cash-Flow Statement
Project Quality Plan, Quality Control
Plan
Integration Management
Planning and Control
Human Resources Management
OBS, Resources Histogram
Communication Management
Communication Plan
Risk Management
Risk Management Plan
Procurement Management
Procurement Schedule
Table 1 Objectives sub-divided by knowledge area

.2 Risk identification
In this section, areas of risk and uncertainty are going to be identified which may
delay, or cause problems to the completion of the project. Risk Identification is the
most important and hardest part of a management plan, because if any important
risks are not identified, there will be no further analysis, therefore no preparation for
a proper response will exist.
As mentioned before, there are different types of risk in different parts of the project.
The main type are the following. Physical and Technical risks, that will be happening
mostly during the construction process. Design risks, contractual and commercial
risks, financial risks, managerial and external risks. These risks will be identified by
group thinking, influenced from experience and from other project management
risks.
A risk brake down structure (RBS) will be used to present the different risk types as
shown in Figure 1. And also a list of the most important risks and basic risks with
their descriptions, considered, is going to be presented below.

project rick

Physical &
Technical

Safety,
Ground,
Weather,
Resources and
Equipment,
Delivery,
Process

Design

Contractual &
Commercial

Design defects,
Incompletions,
Design Errors

Contract,
Liability,
Time,
Cost and
Funding

Financial

Managerial

External

Exchange rates,
Inflation,
Funding stability,
Client stability

Staff,
Organization,
Resources,
Communication,
Planning and
Controling

Environmental,
Poltical,
Public,
Force Majeure

Figure 1 Risk Brake-down Structure of the projects risks

Most Important/Basic Risks

Physical and Technical related risks:
Accidents during construction
Weather Conditions
Delayed deliveries and disruptions
Design related risks:

Description
PT1
PT2
PT3

The following Physical and Technical related risks were obtained: Changes in the
work, Availability of resources, Accidents on site, Equipment commissioning,
Subsurface geology geotechnical conditions, Weather Conditions, Construction
procedures, Delayed deliveries and disruptions, Worker and site safety, Unsuitable
equipment and materials.

Physical and Technical:

Changes in the work,
Availability of resources,
Accidents on site,
Equipment commissioning,
Subsurface geology geotechnical conditions,
Weather Conditions,
Construction procedures,
Delayed deliveries and disruptions,
Worker and site safety,
Unsuitable equipment and materials
Design:
Defective design,
Errors or incompletion of structural / geotechnical / foundation,
Wrong selection of materials
Contractual and commercial:
Inaccurate contract time estimates,
Delayed payment on contracts and extras,
Change order negotiation,
Priorities change on existing program,
Funding changes for fiscal year,
Additional needs requested by stakeholders
Financial:
Exchange rates,
Inflation,
Funding stability,
Client stability
Managerial:
Inconsistent cost, time,
scope, and quality objectives

No control over staff priorities

Estimating and/or scheduling errors
Lack of coordination/communication
Losing critical staff at crucial point of the project
Insufficient time to plan
External:
Political factors change
Economic instability
Exchange rate fluctuation
Permits and licences
Environmental regulations change
Environmental impact statement required

http://www.designingbuildings.co.uk/wiki/Risk_in_building_design_and_construction
http://www.projectrisk.com/risk_register_development.html