IJSTE - International Journal of Science Technology & Engineering | Volume 3 | Issue 09 | March 2017

ISSN (online): 2349-784X

Risk Management of Housing Project

Vyas Nipul D. Jitendrasinh D. Raol
ME Student Assistant Professor
Department of Civil (Infrastructure) Engineering Department of Civil Engineering
LDRP, ITR, Gandhinagar, India LDRP, ITR, Gandhinagar, India

Abstract
Construction is high risk activity, risk and uncertainty are inherent in construction projects whether it is building, commercial
and industrial or any specialized structure such as bridge, warehouses, water retaining structure etc. today, advanced technology
and mechanization has touched all fields of civil engineering and has made the construction process more complex and
uncertain. The risks and uncertainties associated with construction projects affects the entire spectrum of project objectives i.e.
performance, productivity, profitability and quality. This has stressed the importance of risk management. Risk management
applied to each phase of construction project is vital to all parties involved. The aim of risk management is not necessary to
eliminate total risk. The presence of risk can be sometimes forces the decision-makers in planning and results into some potential
benefits. In addition, the presence of risk increases the amendment to control. This study aims to emphasize on risk management
process and considering the specific area of housing schemes. Studying of various risk encounter during the housing project also
suggesting appropriate method and technique for the housing project. The methodology for this study include various literature
review and information regarding risk management, interview and data collection from the selected sites, analysis and scrutiny of
data collected, analysis will be done using risk matrix and other techniques. Conclusion and suggestion will be carried out as per
analysis of data.
Keywords: Risk management, Housing project, Risk matrix
________________________________________________________________________________________________________

I. INTRODUCTION

Risk and Risk Management:

Risk is virtually anything that threatens or limits the ability of a community or non-profit organization to achieve its mission.
It can be unexpected and unpredictable events such as destruction of a building, the wiping of all your computer files, loss of
funds through theft or an injury to a member or visitor who trips on a slippery floor and decides to sue. Any of these or a million
other things can happen, and if they do they have the potential to damage your organization, cost you money, or in a worst case
scenario, cause your organization to close.
Risk Management:
Risk management is a process of thinking systematically about all possible risks, problems or disasters before they happen and
setting up procedures that will avoid the risk, or minimize its impact, or cope with its impact. It is basically setting up a process
where you can identify the risk and set up a strategy to control or deal with it.
Risk Management in Construction:
Risk management in construction projects is of great importance, as shown in Fig 1. Although at the start of a project, through
the introduction of risk management, an increased expense is incurred, this is compensated for, in particular through the
advantages of risk management. In the planning phase possible risks for the subsequent project success can be identified and
reduced through their incorporation into the planning. This has in particular effects on the observance of set dates and deadlines
and thus also on the maintenance of the project costs. For the principal, observance of its due date for putting into service an
operating unit is of great importance. The risk potential analysis of a project states to what extent project risks influence the risk
situation of the enterprise. Risk potential should be estimated without a detailed consideration of the individual risks at as little
expense as possible. Depending on the assessment of the risk potential, the risk management process is set in motion.

II. METHODOLOGY

Methodology adopted for this thesis is collecting and identifying different risks in housing project by doing literature review.
after that a questionnaire is prepared which are distributed in professional ( engineers, supervisors etc. ) working in housing
sector and by analyzing the results of this survey whole data analysis stage is done using risk matrix and paired comparison.
Conclusion is given on the basis of data analysis.

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 Risk Management of Housing Project
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III. DATA COLLECTION

Risk Identification
For the purpose of risk analysis we have to collect data. For this data collection we have few methods which are shown in fig
Questionnaires or Checklists:- Questionnaires are usually drawn up from a combination of previous experience and specific
project criteria. There are two forms of questionnaire, one is a very general form with non-specific prompts or questions and the
other can be detailed as is required by the particular project. Questionnaires also facilitate consistently presented answers from
different team members which allow less time consuming and more meaningful comparisons. Therefore the risk manager can
ascertain more readily any apparent consensus.
Interviews: -
This is technique that has been used historically by personnel departments and other consultants to extract information. It has
also been used by risk managers to identify possible risk in a development. The interviews may take place on a one to one basis
or on a many to one basis. The many to one basis should consist of projects members from different disciplines so that the
subjects raised can be viewed from different perspectives. The problem with this method is that it is time consuming not only to
carry out the interviewing but also record the risks arrived at there from.
Expert System: -
A lot of research is being done on artificial intelligence and expert systems. Specifically, one of the most sophisticated models
that can be developed for risk management is by making use of knowledge-based systems or human-computer cooperative
systems. This system is designed to assist the project managers in achieving more effective control over risks by providing them
with appropriate knowledge, gathered from many project managers and compiled into a knowledge-base. It is designed to warn
project managers of risks that may follow etc. While doing this, the logical thinking and the intuitive thinking of the managers is
accounted for in the system
The Delphe Technique:-
The Delphe technique attempts to produce objective results from subjective discussions. It is a systematic, interactive forecasting
method which relies on a panel of independent experts. This method may be applicable to the identification of risks but it is more
suited to attaching likelihood of occurrence and potential impacts of previously identified risk events. This method basically
involves the following sequence of events:
A questionnaire is forwarded to all the appropriate members of the project team by the appointed risk manager.
The members of project teams give their objective views in response to the questionnaire and return them to the risk
manager.
The risk manager then collects these results and redistributes them. Each project participant now receives a different set of
views and is requested to reconsider their original answers and resubmit them to the risk manager.
These revised results are again collected by the risk manager and redistributed again in the same manner as above.
This iterative process is continued until the risk manager is satisfied that a consensus o opinion has been reached
Questionnaire prepared for survey scale used for it is also shown below,
Table 1
Scale for survey
Scale Probability Scale Impact
1/5=0.2 Rare 1 Very low
2/5=0.4 Occasional 2 Low
3/5=0.6 Some what frequent 3 Moderate
4/5=0.8 Frequent 4 High
5/5=1 Very frequent 5 Very high
Table 2
questionnaire survey
Sr. RISK
CATEGORIES OF RISK PROBABILITY IMPACT
NO CODE
ORGANIZATIONAL RISK 0.2 0.4 0.6 0.8 1 1 2 3 4 5
1 O1 Inexperienced staff assigned
2 O2 Loosing critical staff at crucial project of time
3 O3 Unanticipated project manager workload
4 O4 Inconsistent cost, time, scope and quality objectives
5 O5 functional units not available over loaded
6 O6 Priorities change on existing program
7 O7 New priority project inserted into program

MATERIAL RISK
8 M1 Non availability of material
9 M2 Defective material
10 M3 Poor transportation for material

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FORCE MAJEURE
11 F1 Rain
12 F2 Earthquake
13 F3 Flood
14 F4 Fire
15 F5 Riot

ACTIVITY DELAY RISK

16 A1 Construction delay
17 A2 Delay in payment, handling and drawing
18 A3 Unavailability of material, manpower, machinery
19 A4 Delay in approval
Mobilization of sufficient resources on time
20 A5
and to budget
21 A6 poor quality work
22 A7 Site condition causing problem
23 A8 Low productivity of labor
24 A9 Break down of machinery

FINANCIAL RISK
25 FI1 Inflation
26 FI2 Penalty for activity delay
27 FI3 Change in design/variation in design
28 FI4 Theft
29 FI5 Taxation
30 FI6 Project cost comes to be high
31 FI7 Capital arrangement is not sufficient

LOBOR RISK
32 L1 Unavailability of local & skilled labor
33 L2 Strikes by labor
34 L3 Accidents

ENVIRONMENTAL RISKS
35 EN1 Air pollution
36 EN2 Noise pollution

PROJECT MANAGEMENT RISK

37 P1 Local agency issues
38 P2 Estimating and /or scheduling error
39 P3 Unplanned work that must be accomated
40 P4 Pressure for acceleration of work
41 P5 Ability to deal with local labour unions
42 P6 Incompentency in management capabilities
43 P7 Incompentency in project management
44 P8 Priority of client change
45 P9 Lack of upper management support
46 P10 lack of coordination

COMPLETION RISK
47 C1 Receipt of all planning and other approval
48 C2 Project is not finished
49 C3 Proper design of project after completion

Legal risks
50 LE1 Dispute amongst contractor
51 LE2 Dispute regarding measurement of work
52 LE3 Work overlapping with other contractor
53 LE4 Price escalation is not provided
54 LE5 Project duration is not real

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 Risk Management of Housing Project
(IJSTE/ Volume 3 / Issue 09 / 081)

IV. DATA ANALYSIS

Risk matrix:
A risk assessment matrix is a project management tool that allows a single page quick view of the probable risks evaluated in
terms of the likelihood or probability of the risk and the severity of the consequences.
A risk assessment matrix is easier to make, since most of the information needed can be easily extracted from the risk
assessment forms. It is made in the form of a simple table where the risks are grouped based on their likelihood and the extent of
damages or the kind of consequences that the risks can result in. A sample risk assessment matrix can be downloaded for free
from here.
Making a risk management matrix is the second step in the process of risk management, and it follows the first step of filling
up a risk assessment form to determine the potential risks. The preparation of risk assessment forms is a more elaborate task and
involves determining risks, gathering risk data, determining the probability and the impact levels of the risks, understanding
consequences, assigning priorities and developing risk prevention strategies. On the other hand, a risk assessment matrix just
provides the project team with a quick view of the risks and the priority with which each of these risks needs to be handled.
Also in project planning, a different type of risk assessment template can be created in Excel and used to assess the overall risk
of initiating a project.
Base on the data collected a risk matrix can be prepared as followed
Table 3
Risk matrix
VERY HIGH(5) F2,F3 A7,FI6,L2,P1 M1,A2,P8,C2,LE4
HIGH(4) M3,F4,A1,FI3,FI4,LE3,LE5 M2,L3,EN1,P3 P4,O6
MODERATE(3) F5,A9,FI7,P6,C1 A3,A5,A6,L1,P7,LE2,O5 A8,FI1,P2,P10,LE1,O1 P5,C3,O7
LOW(2) F1,A4,FI5,EN2,O3 O2,O4,FI2 P9
VERY LOW(1)
PROBABILITY/ SOMEWHAT
RARE(0.2) OCCASIONAL(0.4) FREQUENT(0.8) VERY FREQUENT(1)
IMPACT FREQUENT(0.6)

V. CONCLUSION

Risk management can be implemented successfully and efficiently in construction industry but it requires some trustworthy
database, past experience and commitment to do. Risk management is the concept in construction industry that is making its own
mark as a crucial and important part of project management. It has been said that it is only for insurance, this is wrong to quote
like this. It is a systematic analytical approach starting with risk identification and its mapping, probabilistic risk analysis and
evaluation of significant risks and development of management or control strategies to eliminate, avoid, transfer or reduce
certain risks.
After gathering data and analyzing it, few concluding remarks are,
Risk identification is much more important phase in risk management process rather than risk analysis. As the risk are
identified, it is easy to allocate percentage or weight age to each risk based on history and past experience.
The study include some data gathering or data collection techniques which was questionnaire or opinion survey and
interview as well as discussion held with project expert but here the most important thing about gathering data it is that
sample size selection which should be large enough.

ACKNOWLEDGMENT

I wish to express my deep sense of graduate to my internal guide Asst.Prof Mr. Jitendrasinh Raol and to our Head of Department
Asst. Prof. Mrs. Ankita J Parikh of LDRP-Institute of Technology and Research, Gandhinagar for their able guidance and useful
suggestions, which helped me in completing the project work, in time. I would like to take this opportunity to express my sincere
gratitude and extend my heartiest thanks to Prof.(Dr) Gargi Rajpara, Principal for lighting the very first ray of hope in pursuing a
career in Infrastructure Engineering ever since my college time and till now.

REFERENCES
[1] Nerija Banaitiene and Audrius Banaiti, Risk Management in Construction Projects 2012
[2] Luiz Carlos Di Serio, Luciel Henrique de Oliveira, Luiz Marcelo Siegert Schuch ,Organizational Risk Management A Case Study in Companies that have
won the Brazilian Quality Award Prize on 2011-2012
[3] Mr. Satish K. Kamane, Mr. Sandip A. Mahadik, Risk Management in Construction Industry 2014
[4] The Principal Policy Manager, Building Policy Unit, Strategic Asset Management, Department of Housing and Public Works, GPO Box 2457 , Risk
management, Brisbane 2009-2010
[5] www.spms.ntu.edu.sg/mas/Safety/Safety_Doc/RA%20SPMS%20180512.xls
[6] http://www.stakeholdermap.com/risk/risk-management-construction.html

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