Risk Management in Construction Projects
Abstract
Risk is an uncertain event or condition which can have a positive or negative effect on one or more objectives in a construction project, such as; scope, schedule, cost, performance and quality. One or more of these can be of impact on the project, both positive and negative outcomes. Positive and negative risks are referred as opportunities and threats for the project, and it is the management of all these that constitute the Risk Management in Construction Projects.
Risks are present already from the time a project starts. Therefore it is important to prioritise risk management, since it will likely lead to more problems if handling the risks is procrastinated.
The goal of risk management is to increase the likelihood and impact of positive events and meanwhile decrease the likelihood and impact of negative events in construction projects. [1]
The tools applied in risk management in construction projects are grouped into three categories: Identification, Assessment/Analysis and Response.
To identify risks, tools such as foreseen and unforeseen events, Rumsfeld's known-unknowns and SWOT are involved. Moreover, Risk probability-impact identification analysis and charts are involved for assessment and analysis of risk. Last but not least, ARTA diagrams and Risk register are included for risk treatment and control.[2]
