Risk Analysis

8.1 Introduction

Risk is a commonly used concept and it’s used interchangeably with words like chance,

likelihood and probability to indicate uncertainty about the state of the item, issue or activity

under a discussion. Risk management defines as the process of identifying, analyzing and either

acceptance or mitigation of uncertainty in making decisions about organizational assets.

Therefore, focus will be on the risks that may have potential to cause harm directly and

indirectly to the business. A risk assessment is also a simply careful of examination of what, at

the firm, may cause harm to people, so that can weigh it up whether should have taken enough

precautions or should do more to prevent harm.

Risk assessment is an important step in protecting organizational assets such as workers who

are considered as human capital as well. Risk assessment not only benefits the enterprise, but

also complies with the law and is necessary for any business to consider critically.

Furthermore, risk management plays an important role in the project success meanwhile there

is an obvious association between risk and project objectives where risks as an unknown and

uncertain events affect at least one of project objective if they happen.

Generally, managing of risks in a project would be with following objectives:

 To identify and priorities potential risks

 To analyze and report identified risk events

 To find ways to identify and evaluate risks

 To establish risk management methods, tools and techniques to assist

 To develop strategies and plans to manage risks and reduce their harms
  To develop long term management strategies and plans for future possible risky events

Managing risks at work will greatly improve the transparency of how the projects operate,

providing a roadmap to achieve strategic goals and objectives and reassurance over the

management of risks. Risks exist in the project range from uniqueness, complexity, change,

assumptions and constrain to dependencies and people. Therefore risk management process

consists of risk planning, identifying risks, risk analysis and risk controlling and monitoring.

8.2 Risk Management Process

Figure 8.1: Process of risk management.

Formation collected under each stage assists managers to make decisions about the possible

risks and provide strategies in order to manage those risks. Successful risk management may

take place if only each stage be done perfectly and correct all steps are related one to another

based on Figure 1. The risks that have been identified are currently subject to a series of
activities to resolve them. The identification of risk normally starts before the project is

initiated, and the number of risks increase as the project matures through the lifecycle. Figure

8.2 presents risk identification cycle of project.

8.3 Risk Management Cycle

Risk management is a fluid process that affects all areas of our planning and decision making

processes. Key stages in the cycle of risk management are below:

. Figure 8.2: Risk identification cycle of project.

8.3.1 Organization and Risk Management

It’s important to consider that organization is like a team and teamwork is necessary for

success. Therefore, in case off risk management also all members must be aware and included.

However, there are different tasks and responsibilities, but involvement of all is necessary.
The responsible for Risk Manager are:

 Maintaining this Risk Management Plan

 To provide briefing the Project Manager on the status of CPUM project risk

 Tracking efforts to reduce moderate and high risk to acceptable levels

 To providing risk management training

 To provide facilitating risk assessments

 To preparing risk briefings, reports, and documents required for project reviews and the

acquisition milestone decision processes.

The project team is responsible for implementing risk management tasks per this plan. Their

responsibilities are:

 To review and recommend to the Risk Manager changes on the overall risk management

approach based on lessons learned

 Update the project risk assessment made during the applicable project phase

 To review and be prepared to justify the risk assessments made and the risk mitigation

plan proposed

 To report risk to the Project Manager, with information to Risk Register or Risk

Assessment Forms

 To ensure that risk is a consideration at each project review.

The important of the owner organization is to remains fully involved in the risk management

process and identifies risks connected with future operation of the project deliverable.
8.4 Scope and Context

This Risk Management Plan can be identifies the procedures that required to manage risk

throughout the project. It’s also include to documenting the come within reach of the risk

identification and analysis, who is responsible for managing risks, how risks will be tracked

through the project lifecycle, and how mitigation and contingency plans and if its required, will

be developed and implemented.

The risk management starts at the beginning of the project (Initiation Phase) with initial

planning and carried out at all levels within the project, team and contractor. This process is to

ensure that risks are mitigate at the appropriate level and communicated as appropriate. While

this plan provides guidance on managing all levels of risks, the primary focus is on risks at the

project level, assuming that similar processes are in effect within the individual teams and

contractors that comprise the project.

Risk management is an integral part of overall project planning and management and successful

project planning and management requires effective identification and assessment of risks and

determining what mitigating actions are required. Managing the completion of mitigation

actions needs to be integrated with overall project tasks and assignments.

 Table 8.1: Risk according to different construction phases.

Extreme High Medium

- Economical risk. - Delay in project - Subsequent delays
- legal risk completion - Physical Risk
Tender
- Owner credit risk - Force majeure - Environmental
- Choosing right Risk
contractor - Inclement weather
- Political Risk risk
Pre-construction - Wrong selection of - Storage of material - Utilities approval
TBM and machinery risk
- Mobilization and
setting-up risk
- Design failure - Differences in - Commodity price
- Late submission of opinion risk
Design
detailed design - Increasing
- Late verification competition
- Settlement problem
-Variation order
- Delay in piling - poor installation - Regulatory changes
- Storage of labors - security system - Storage of
- Slope failure not satisfactory qualified technicians
Construction - collapse of scaffolding - falling object - Machinery break-
- environmental risk - third party liability down
- unsafe condition - Fire
- Explosion
- Adverse weather
- Delay by supplier
Post - failure to meet - Contractor billing - Owner allowances
construction stakeholder requirement exceed contractor’s disappear
- high maintenance costs
8.4.1 Responsibilities

However a project is based on teamwork and all members of the team are responsible to work

for project’s success but, project manager is the main person in charged for managing and

planning risks and in general his responsibilities cover all the aspects of risk management such

as assessment, handling options, and monitoring of risk mitigation activities. The project

management has to monitors the planning activities by the team to ensure that they are

consistent with this Risk Management Plan.

8.4.2 Documentation and Risk Identification

The basic risk documentation and reporting requirements for the project should be established

by the risk management plan. All the team members should identify any additional

requirements that might be needed to effectively manage risk at their level. The first step in the

assessment process is the risk identification. Basically, all identified risks should be initially

documented in the Risk Register. Risks that identified by reviewing project documentation,

through discussions, meetings and workshops with the project team and managers, line

agencies and contractors should be initially documented. By doing this in every and each

meeting all risks will be discussed and planned and also all members will be very well aware

of day to day plans, costs, schedules and details of project.

8.5 Risk Monitoring and Reporting

The project manager as overall responsibility for monitoring and managing all aspects of the

risk management process, unless the risk management activities have been assigned to a

separate risk manager. To ensure that significant risks are effectively monitored, risk-handling

actions should be reflected in integrated project planning and scheduling. Identifying these risk

handling actions and events in the context of Work Breakdown Structure (WBS) elements

establishes a linkage between them and specific work packages, making it easier to determine

the impact of actions on cost, schedule, and performance. For this case recommended tools and

techniques would be as:

 Brainstorming, with a facilitator and range of stakeholders

 Interviews with stakeholders.

 Scenario, business analysis and event tree modeling.

 Dependency modeling.

 Experience from other projects, metrics and published data for norms.

 Reviewing project information, including plans, analysis and designs.

 Checklists

8.6 Risk Monitoring and Response

In this case team may start to response to risks and cover them first from the most significant

ones. This prioritization realizes on accurate information and proper decisions making that

already explained in previous stages. Risk Response requires effort to develop and implement

response actions; we must plan for expending this effort following the results of our risk

analysis. As it continues successfully, respond to risks will be taken so that risk events will be

successfully avoided or mitigated. Following table shows risk respond actions or this report.
 Table 8.2: Risk respond actions.

AVOID (threats) Action taken to insure the probability or impact of a threat is

eliminated
EXPLOIT Action taken to insure the benefit of an opportunity is realized.
(opportunities)
TRANSFER (threats) Action to allocate ownership for more effective management of a
threat.
SHARE Action to share with a third party; enhance/exploit opportunity.
(opportunities)
MITIGATE- or Action taken to reduce the probability and/or impact of a threat.
reduce (threats)
ENHANCE Action to enhance opportunity.
(opportunities) Actions take to document the acceptance of the risk.
ACCEPT

Further, monitor the project indicates variations (good and bad) in the project execution.

Results of managemenet’s analysis about that should be communicated and adjustments should

be taken countinously so that organziation can be on a safe side always all the time froem a

certain risk and plans and decision be taken countiniously to impliment the plan

successfully.Communication is part o the project from the early stage until the end. Its

important to note that monitoring and controling the proect and its implimentation should be

taken frequently and properly to ensure the organziation is on the right way to achieve the goals

and plans that had been made at early stages of risk management planning.

8.7 Top Six Construction Site Hazard

Construction sites are considered the most potentially hazardous and accident-prone parts of

any working environment. Excessive exposure to these construction site hazards exposes

workers to injury and possible death. The Occupational Safety & Health Administration
(OSHA) wants every employee to have sound knowledge of their susceptibility to harm or

injury in the workplace.

1. Electrical- Electricity is one of the greatest hazards to people either at home or at work.

Power line workers, electricians and electrical engineers work continuously with

electricity and can face exposure to this hazard on a daily basis. At the construction site,

the best way to prevent this kind of hazard is for the power line workers to be a safe

working distance away from the power lines. Other precautionary measures include

guarding and insulating of the vehicle from which they might work. This would help

prevent electrical hazards from injuring them while working.

2. Excavation and Trenching - OSHA has recognized excavation and trenching as the most

hazardous construction site operation. From the year 2000 to 2006, the United States

Bureau of Labor and Statistics (USBLS) recorded 271 worker fatalities in trenching and

cave-ins. These hazards are preventable yet injuries related to these hazards are still

happening. Both employer and employee must follow safety standards and use protective

equipment to minimize hazards while trenching and excavating.

3. Falls - Falling from scaffolding over six feet or a fixed ladder over twenty feet is the most

dangerous and common construction site hazard. Falling from high places such as a

ladder, scaffolding and roofs account for more than fifty percent of the accidents that

happen at the workplace. The usual cause of this incident is slipping, tripping and using

unstable ladders. There are thousands of reasons for fall hazards and to eliminate such

risks, employers must have a fall protection program as part of any overall workplace

safety and health program. Workers should be trained to identify and evaluate fall hazards

and be fully aware of how to control exposure to such risks as well as know how to use

fall protection equipment properly.

4. Stairways and Ladder - According to OSHA's construction safety and health standards,

stairways and ladders are major sources of injuries and fatalities among construction

workers. These recorded injuries are serious enough to put a worker out on sick leave.

OSHA registered approximately 24,882 injuries and 36 fatalities yearly that are related to

falling from stairways and ladders used at the construction site. To prevent such accidents

and injuries, employers and employee must comply with OSHA's general rule for the safe

use of ladders and stairways.

5. Scaffolding - Every year, approximately 60 workers die by falling from scaffolding; one

out of five construction site falls are fatal. The most potential risk of scaffolding is due to

moving scaffold components; scaffold failure related to damage to its components; loss

of the load; being struck by suspended materials; electrical shock; and improper set-up.

Construction workers who assemble and dismantle scaffolding and work platforms at

construction sites face the risk of serious injuries due to falls. The scaffolding hazard is

addressed by stated OSHA standards. They give specific requirements for the maximum

load, when to use scaffolding, bracing and the use of guardrails.

6. Heavy Construction Equipment - Approximately 100 construction site workers die each

year due to heavy construction equipment. The main causes of such accidents includes:

ground workers struck when a vehicle is backing up or changing direction; equipment

rollovers that injure the operator; mechanics run over when brakes are not properly set;

and ground workers crushed by falling equipment from backhoes, buckets, and other

moving construction vehicles. To prevent this kind of risk, workers should follow all

construction safety guidelines necessary to eliminate the exposure to such injuries and

accidents. Safety risks on construction site are unavoidable; however, these can be

prevented if workers are instructed on how to identify the hazards that might be present

at the work-site. The employer must establish proper safety standards that meet the
 maximum requirements of the Occupational Safety and Health Administration. This will

ensure that workers will have a safe working environment during normal operation.

8.8 Safety Committee at Work

The role of "workplace safety coordinator" can be incorporated into someone's job description.

It does not have to be a separate position. Various personnel must be able to perform specific

steps to identify and control hazards. In larger organizations, a safety director, safety manager

or safety officer, sometimes under the leadership of a professional risk manager, is in charge

of the workplace safety program and appoints a workplace safety committee to assist in

implementing the workplace safety program. Organization's safety manual should include

workplace safety programs. Individual components, such as floor-by-floor fire-evacuation

plans, should be posted. The programs should be reviewed and updated at least annually to

ensure quality, effectiveness and compliance with all applicable codes. Meetings should be

documented and kept on file for at least three years for reference. Duties of the safety

committee vary, depending on the organization's size and the nature and severity of the

location's hazards. The safety committee's monthly meeting agenda should include:

 Review or accident and investigation reports

 Overview of accident/incident trends

 Summation of In-services

 Results/findings of inspections

 New and outstanding safety issues

 Safety topic of the month

Also, all injuries need to report to your supervisor. The treatment will be rendered and the

incident will be recorded. If your get outside medical treatment for work related injury or

illness, you must inform your supervisor at the start of next scheduled work day. Also, all
accidents and injuries occurring on property or involving organization-related activities must

be reported to the safety coordinator immediately. If a workers' compensation or other claim is

evident, the safety coordinator should contact the organization's insurance agent within 24

hours during normal business hours, and the insurance company claim reporting for off-hours

emergencies. Employees who work with hazardous material can be made fully aware of these

hazards. A written hazard communication program is needed to help understand the hazardous

materials at your work are a part of this effort.

8.9 Personal Protective Equipment (PPE)

All personal protective clothing and equipment is of safe design and construction for the work

to be performed. PPE is maintained in a sanitary and reliable condition. Only those items of

protective clothing and equipment that meet NIOSH standards will be procured or accepted for

use. PPE should be inspected, cleaned, and maintained at regular intervals so that the PPE

provides the requisite protection. Personal protective equipment shall not be shared between

employees until it has been properly cleaned and sanitized. PPE will be distributed for

individual use whenever possible. As employees are exposed to hazards from flying particles,

molten metal, acids or caustic liquids, chemical liquids, gases, or vapors, or potentially

injurious light radiation, they should be used suitable protectors. Wearers of contact lenses

must also wear appropriate eye and face protection devices in a hazardous environment.