3. AIM
TO FIND THE RISKS DURING ALL THE PHASES OF CONSTRUCTION FOR MULTI-STOREY BUILDINGS
TO FIND THE COST OVERRUN FOR THE PROJECT AND THE TIME DALAY
OBJECTIVE
TO DETERMINE THE RISK DURING CONSTRUCTION PHASE
TO DETERMINE THE FACTOR RESULTING IN TIME AND COST OVER RUN DURING ALL THE PHASES OF
CONSTRUCTION
SCOPE
THE RISK THAT IS LIKELY TO BE THE MAXIMUM IN COST OVERRUN AND EXPLAIN THE RISKS
LIMITATION
THIS STUDY IS ONLY LIMITED TO FIND THE COSTOVERRUN AND TIME DELAY FOR THE PROJECTS
DURING THE PHASES OF CONSTRUCTION .
4. INTRODUCTION TO RISK MANAGEMENT IN CONSTRUCTION INDUSTRY
Construction projects, whether for a new house, a multi-level office block, or other jobs are complex and
unique–as are the risks that go with them. Sometimes a risk turning into reality delivers a knockout blow. In
other cases, a combination of risks, even where no individual risk would have been fatal, will sink the project or
even the construction company altogether. Construction risk management is a must if a company is to be sure
of survival and growth.
The best way to ensure good construction risk management lies in good processes. These processes are
robust, easy to follow, and help take the right decisions and actions. Risk management in building benefits from
this kind of process too, at an enterprise and at a project level.
The three stages of construction are
• Pre construction phase
• Construction phase
• Post construction phase
.
5. 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 likely
hood of occurrence and potential impacts of previously identified risk events.
This method basically involves the following sequence of events:
1. A questionnaire is forwarded to all the appropriate members of the project team by the appointed
risk manager.
2.The members of project teams gives their objective views in response to the questionnaire and
returns them to the risk manager.
3. 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.
4.These revised results are again collected by the risk manager and redistributed again in the same
manner as above.
5.This iterative process is continued until the Risk manager is satisfied that a consensus o opinion
has been reached.
6. THE VARIOUS TYPES OF RISK IN CONSTRUCTION ARE :
TECHNICAL RISK
OPERATING RISK
FINANCIAL RISK
ENVIRONMENTAL RISK
FORSE MAJEUR RISK
8. An inadequate project definition, the lack of clear objectives and the lack of
communication about problems, create the conditions for high risk impact in
developing an activity.
For instance, project error causes and effects strongly affect management of
the construction process.
It is the degree of uncertainty, like incomplete design, incomplete design
investigation, uncertainty over the source and availability of materials and
appropriateness of specifications.
The Technical Risk management stages for building construction defined to
satisfy the specific needs of construction management are:
• Process and design review,
• Pathology and failure mode diagnosis
• Risk analysis
10. This risk is the totality of all risks that relate to financial developments external to the project that are not in the
control of the project developer. This results from consequences that may have adverse economic effects.
Financial risks fall into these categories
• Exchange rate risk relates to the possibility that changes in foreign exchange rates alter the exchange
value of cash flows from the project. This risk may be considerable, since exchange rates are particularly
unstable in many developing countries or countries whose economies are in transition.
• In addition to exchange rate fluctuations, the project company may face the risk that foreign exchange
control or lowering reserves of foreign exchange may limit the availability in the local market of foreign
currency needed by the project company to service its debt or repay the original investment.
• Interest rate risk forces the project to bear additional financing costs. This risk may be significant in
infrastructure projects given the usually large sums borrowed and the long duration of projects, with some
loans extending over a period of several years.
• Unmanaged growth, lack of sales, rising interest rates, overtrading, problems with the economy, and
increases in oil and building supply prices are financial risks.
12. • These are risks relating to occurrence of environmental incidents during the
course of implementation of the project.
• These risks are generally within the control of the construction and the
operation and maintenance consortium. This risk has increased due to the
presence of strict legal liability in relation to such environmental incidents, which
can result not only in adverse affects on the financials of a project but may also
cause a closure of any work or operations of and in relation to the facility.
• Loss of flora and fauna
• Loss of fertile lands
• Rehabilitation and resettlement problems
• Floods, earthquakes, and other phenomena that damage construction sites or
make access for work impossible.
14. • These risks are regarding the events that are outside the control of any party
and cannot be reasonably prevented by the concerned party.
• These risks generally arise due to causes extraneous to the project.
• The defining of force majeure events, these include natural force majeure
events, direct or indirect political force majeure events.
• Natural force majeure events comprise of all events that can be attributed to
natural conditions or acts of god such as earthquakes, floods, cyclones and
typhoons.
• These risks should be shared equally among the parties.
• Direct political force majeure events are events attributable to political events
that are specific to the project itself such as exploration, nationalization.
• Indirect political force majeure events are events that have their origins in
political events but are not project specific such as war, riots etc.
16. Some of the risks that may face in a construction project apply during operations
and maintenance (O&M) type services. More specifically, operational risk can be
defined as the risk of loss resulting from inadequate or failed internal processes,
people and systems, or from external events 22. Some of the risks and actions
available to the concession n company include:
1. Performance risk- The completed facility cannot be effectively operated or
maintained to produce the expected
capacity, output or efficiency.
2. Operation cost overrun- The operating costs exceed the original estimates.
3. Operating contractor default - The concession company may terminate the
operations and maintenance contract and appoint a new O&M contractor.
4.Default - The default may be caused by the actions of a third party, in which
case the concession company could make claims of damages against that party
18. SITE CONDITIONS
C
R
I
T
E
R
I
A
SUB
CRITERION
ATTRIBUT
E RISK
FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LOW
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Environmental Earthquake
Precipitation
/flood
Unpredicted
Weather
condition
Pollution
Sub-surface Unexpected
Surface
conditions
Archeological
survey done
Geo-technical
investigation
Site location Construction
area (rural/urban
Access
conditions
On-site
congestion
Delay in permits
and licenses
Security
requirements
Safety regulation
Differing site
19. C
R
I
T
E
R
I
A
SUB
CRITERI
ON
ATTRIBUTE
RISK FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LO
W
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Labor Labor skills level
Labor availability
Drop in Labor
productivity
Labor accidents
Human resource
planning
Working hours
restrictions
Equipment Equipment quality
Equipment breakdown
Equipment maintenance
Equipment malfunctions
Material Material delivery
Material storage
Material theft & damage
Material procurement
Non-conforming material
Material monopoly
SITE CONDITIONS
20. C
R
I
T
E
R
I
A
SUB
CRITERI
ON
ATTRIBUTE
RISK FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LO
W
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Owner Owner type
management strategy
organization structure
Work/ labor permits
on-site access
Engineering
and Design Team experience
Project goal
Complexity of design
Ad-hoc consultants
Design error
Contractor Contractor pre-qualified
New technology
Defective work
Rework
no of subcontractors
Contractor Reputation
Nominated sub-
contractors
No. of current projects
21. C
R
I
T
E
R
I
A
SUB
CRITERI
ON
ATTRIBUTE
RISK FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LO
W
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Project
management
Management experience
Owner quality assurance
Scope definition
quality control process
Type of contract
availability of variations
Financial Type of Funds
Fluctuation in prices
Invoices delay
Change in currency rate
Owner financial capacity
Progress payment
rate of interest
tax rate
foreign currency
project size
Political Bribery and Corruption
Wars and revolutions
Changes in laws and
regulations
Schedul Fast track schedule
22.
23.
24.
25.
26.
27.
28. ENVIRONMENTAL :
• Fumes, emissions and spills from chemicals applied during construction (e.g., finishers, sealants, adhesives, solvents, curing co
• Heating, ventilation, air conditioning (HVAC) construction or maintenance errors, causing release of airborne bacteria, mold, or c
monoxide build-up, in addition to mold resulting from water intrusion or moisture encapsulation.
• Fluid discharge from large equipment.
SUB SURFACE :
• Type of a structure to be constructed on the site.
• Un-expected surface condition.
SITE CONDITION :
• on site congestion is when all the modes of machines makes a traffic on the site without planning .
• Delay in permits and license of the lorries and equipments and machines can delay the project
29. LABOUR :
• Labour accidents can happen in the following ways
Falls from height.
Falling objects.
Tripping hazards.
Defective equipment.
Vehicle accidents.
Excessive noise/vibrating tool hazards.
Exposure to irritants.
EQUIPMENT :
• Construction equipment and machinery is often to blame for construction worker accidents.
• Actually, not the equipment itself, but those who designed it, maintained it, or used it improperly.
MATERIAL THEFT AND DAMAGE :
• General contractors, builders, construction workers, and developers, are exposed to risk of loss and damage to either their own
or those of their customers,
• their clients or other third parties.Common occurrences include damage to building and contract works in progress by perils suc
storm, water, impact and theft.Contractors materials and their hired plant,machinery and tools being stored on a construction s
ite are also at risk of loss and damage.
• These incidents of damage and loss on building sites are normally covered by contractors all risks insurance policies.
30. ENGINEERING AND DESIGN :
• In this project they faced mainly structural problems because of not properly designed structural and it took some days to rectify
CONTRACTOR :
• The contractor risk comes when they are not pre-qualified and some times will waste the time for doing a simple project work .
PROJECT MANAGEMENT :
• This project management team in project is responsible for all the risk and loss of time management because they are the one w
controls contractors,architects,labours ect . If they are not properly managing means the problems will arise .
FINANCIAL :
• The financial problem will arise when the client is bank corrupt or some wastage of money in unwanted structures or machinerie
SCHEDULE :
• The construction of project work mainly based on the schedule of projects , it has to be prepared clearly .
31. LIKELYHOOD CONSEQUENCE
SERVER MAJOR MEDIUM MONOR NEGLIGIBLE
ALMOST
CERTAIN
E H H M M
LIKELY H H M M L
POSSIBLE H M L L L
UNLIKELY M M L L T
RARE M L T T T
The risk matrix
32. Factors affecting the success of a construction project
The construction industry is dynamic in nature due to the increasing uncertainties in technology, budgets and
development processes. The study of project success and the critical success factors (CSFs) are considered
to be means to improve the effectiveness of project.
PROJECT SUCCESS
Project management actions
1. Communication system
2. Control mechanism
3. Feedback capabilities
4. Planning effort
5. Developing an appropriate organization structure
6. Implementing an effective safety program
7. Implementing an effective quality assurance program
8. Control of sub contractors works
9. Overall managerial actions
Project procedures
1. Procurement method
2. Tendering method
33. Project related factors
1. Type of project
2. Nature of project
3. Number of floors of the project
4. Complexity of project
5. Size of project
External environment
1. Economic environment
2. Social environment
3. Political environment
4. Physical environment
5. Industrial relations environment
6. Technology advanced
35. NET CASE STUDY 1
PROJECT RISK
MANAGEMENT OF
BURJ KHALIFA
36. INTRODUCTION TO BURJ KHALIFA
• Tallest Building in the world and also the tallest free standing structure in the
world
• Highest number of stories in the world
• Highest occupied floor in the world
• Highest outdoor observation deck in the world
• Elevator with the longest travel distance in the world
• Tallest service elevator in the world
• Constructing the Burj Khalifa required more than 22 million man hours from about 12,000 professionals and
skilled workers, and more than 60 consultants and contracting companies from around the world.
• Burj Khalifa was truly an international collaboration between more than 30 on- site- contracting companies
from nations around the world.
• At the peak of construction, over 12,000 workers and contractors were on site every day, representing more
than 100 nationalities
37. Burj Khalifa Construction Timeline:
January 2004
Excavation started
February 2004
Piling started
March 2005
Superstructure started
June 2006
Level 50 reached
January 2007
Level 100 reached
March 2007
Level 110 reached
April 2007
Level 120 reached
May 2007
Level 130 reached
July 2007
Level 141 reached - world's tallest building
September 2007
Level 150 reached - world's tallest free standing structure
April 2008
Level 160 reached - world's tallest man-made structure
January 2009
Completion of Spire - Burj Khalifa tops out
September 2009
Exterior cladding completed
January 2010
38. • The total time taken for the construction of this building was 2,192 days with the average height built per
day was 37 centimetres or 1 feet and 2.88 inches.
• If we carefully interpret the construction timeline we can understand that the work was speeding up when
the project started.
• There was a steady growth during 2005-06 till level 50 was reached.
• Since then it took a long time to construct another 50 levels as the building was rising higher and the crew
might be dealing with challenges arising due to it.
• From January 07 to July 07 the construction again picked up some speed as they were nearly building 10
floors every month.
• This was remarkable as the construction was reaching the heights where any construction worker might not
have gotten.
• The construction was again slowed down in September 07 when level 150 was reached. After that it took 7
months to complete the top most floor of the building.
• The average height built per day might look small but considering the construction at 838 meters above
ground is an achievement.
• Let us now move on to the actual problems faced by the project management while erecting the world's
highest structure.
39. ISSUES AFFECTING THE PROJECT RISK MANAGEMENT OF BURJ KHALIFA
Listed below are some of the complications that had an adverse effect on the
Project
Time Management of Burj Khalifa.
• Emaar properties had plans to throw open this building in December 2008.
Chairman of the Emaar Group Mohammed Alabbar announced the delay of
about nine months scheduling the opening ceremony in August or September
2009 (www.arabianbusiness.com, 2008).
• However the opening was further delayed and this mega structure was finally
released on 4th of January 2010. The project took 5 years and 4 months for
completion.
• There were several problems during the course of construction of this building
which lead to a delay of more than a year in delivering the project. Some of
40. TECHNICAL RISK AND ENVIRONMENT RISK
According to the officials pumping the concrete to the record height of 828 meters was the toughest part of
constructing this tower.
• Two of the world's largest pumps manufactured by Putzmeister, were used to supply concrete for the
construction of this building.
• These pumps unified with 150 mm pipeline could supply a massive 350 bars of concrete pressure.
• Above level 127 of the tower, a modified mix of concrete was used to account for changing pressure
requirements due to height (Skidmore, Owings & Merrill, 2011).
• In addition to that the climatic condition of Dubai was also a factor that delayed the construction process.
• Work at Burj Dubai is carried out in three shifts. Due to high day time temperatures up to 50° Celsius - the
concrete works are usually carried out during the slightly cooler night time hours (www.pmw.co.in, 2007).
• The effects of Dubai's fluctuating seasonal temperatures made it a challenge to properly pump, pour and
set concrete" (Skidmore, Owings & Merrill, 2011).
• This could cause considerable delays as no concrete work was carried out during the day time.
41.
42. LEGAL RISK AND OPERATIONAL RISK
• Workers constructing the Burj Khalifa went twice on strike during the whole span of its construction.
• In March 2006, 2500 workers rioted at the Burj Khalifa site, demanding a raise in their pay (www.migrant-
rights.org, 2010).
• The labourers complained of being paid as low as $4 per day and were asked to work 12 hours a day and for 6
days a week.
• Riots broke out and the workers vandalized various offices, cars, construction several machineries and
equipment.
• Construction of what is expected to be the world's tallest building was halted after 2500 workers in Dubai rioted
over pay and conditions, causing damage estimated to £ 500,000" (www.guardian.co.uk, 2006).
• The protest was also sympathised by the workers at the construction site of Dubai's New International Airport
laying aside their tools.
• The second protest was held in November of 2007.
43. This protest was for their demands of pay rise as well as to provide better living conditions for the workers.
The latrines are so filthy we cannot use them, we are so disgusted.
The roads are full of garbage and waterlogged. Living and moving around is a great problem, an occupant
reported" (www.migrant-rights.org, 2010).
At both the instances the government threatened the workers to return back to work or face the consequences of
mass deportations.
This lead to unrest and the labourers were not satisfied which directly or indirectly have affected the construction.
Yet the sources claimed that this protest had no effect on the construction of Burj Khalifa.
This can be considered as one of the biggest issue which might have contributed to the delays in the construction.
44. FINANCIAL RISK AND POLITICAL RISK
• In the year 2009, Dubai saw a downturn in its ever booming economy. People lost massive amounts of
money as they saw the economy and the glittering real estate market go down.
• No doubt it was a tough situation for everyone.
• But it was even tougher for the building projects going on at that time.
• One of them was the all famous and glamorous dream project of Burj Khalifa.Half of the UAE's
construction projects, totalling $582bn (£400bn), either have been put on hold or cancelled, leaving a trail
of half-built towers on the outskirts of the city stretching into the desert"(www.guardian.co.uk, 2009).
• Not just in the case of investors and developers, the credit crunch had affected the construction worker's
lives too.
• As the projects were postponed or delayed, the workers were sacked leaving them no choice but to return
back to their countries.
• Many of these workers were from South Asia belonging to countries like India, Pakistan, Bangladesh, Sri
Lanka, etc.
• Burj Khalifa was one of the most expensive projects in the history of the UAE. Undoubtedly it had a lot to
do with this financial crisis.
• The world's tallest building, the Burj Dubai, officially opens its doors, leaving a colossal reminder of the
hubris that brought the emirate crashing in November (www.guardian.co.uk, 2010).
45. ANALYSIS
• The project of constructing Burj Khalifa was awarded to a team of experienced construction companies.
• The principal developer of this project Emaar Properties is a very popular Joint Stock Company developing
projects all across the world in countries like United Arab Emirates, United Kingdom, India, Pakistan, Egypt,
Lebanon, China, Canada, etc. and also some joint ventures in North America, Europe, Pan-Asia, North
Africa and the Middle East (www.emaar.com).
• Giving shape to many projects in UAE, Emaar has a major contribution in Dubai's Infrastructure
development. It has developed much of downtown Dubai.
• Construction of the world biggest mall (Dubai Mall) and the world's tallest tower (Burj Khalifa) is associated
with this company.
• The company is led by its president Mohamed Ali Alabbar who was also in-charge of the decision making
process of the Burj Khalifa. The company follows a decentralised structure of its organisation resulting to
which the decisions were made customer oriented and quicker.
• The authority was delegated to the managers of each department which made it easier to save time.
• This project was directly under the supervision of the ruler of Dubai, his highness Sheikh Zayed Bin Rashid
Al Makhtoum and had a lot of expectations of the people across the world.
46. • Turner Constructions was responsible for the project management of the Burj Khalifa.
• This company is also a renowned name in the industry based in the United States of America.
• This organisation was constantly monitoring the progress of this project to ensure practice of
good standards of project management to deliver efficient and satisfactory project outcome.
Skidmore, Owing and Merrill were designing and Samsung Engineering and Construction and
BeSix were constructing the project.
• Arabtec was involved in supplying man power to this project.
• The assignment was in the hands of well-known experienced professionals as they strived to
achieve a dream to build the highest building in the world. In spite of having a team of best
people at work, there were some problems which were hard to prevent. Some of the issues
related to the delay in the construction of this project are discussed above.
• Unfortunately it was found that all these problems were unavoidable.
• The time consumption of pumping the concrete high above the ground was very much
anticipated and accounted for.
• But in the end it took a bit more time than it was expected to finish.
47.
48. • The fluctuating temperatures in Dubai made it much more difficult for the workers to finish the
task.
• The problems of Labour Strikes and the Economy prices came as a surprise to the initial
planning of this project.
• But indeed the matter was way much serious than what was just reported.
• There have been speculations of workers dying during the construction of this building but the
whole issue was suppressed and there have been no confirmed reports for the same. In a
country like UAE, which is a kingdom ruled by the kings, there is very much little of what is
known as democracy.
• Human Rights Watch reported numerous exploitations that construction workers suffer in the
UAE, including unpaid or very low wages, many years of monetary obligations to the recruitment
agencies for fees, seizing of employee's passport and dangerous working conditions that result
in apparently high mortality rates and injuries (www.migrant-rights.org, 2010).
• As a result of these conditions, strikes and protests were obvious.
• Formation of Labour unions is also prohibited in UAE but the labour ministry promised to set a
minimum wage rate on the basis of which the strikes were withdrawn and work resumed.
49. • The construction was getting back to normal and shortly after couple of years of this incident,
Dubai experienced major financial crisis.
• Once again the smooth going construction was affected and delayed the project in return.
• The consolidated efforts of the companies involved tried their level best to continue the work
and not let the schedule be affected but it was not possible until the President of UAE and the
ruler of Abu Dhabi helped them bail out the indebt city of Dubai.
• The whole process of constructing this tower was complex and painstaking.
• But Emaar properties and all other companies did a very good job in the end to complete this
unique project in mere less than five and a half years' time and setting many world records.
• Undoubtedly it was a great effort from each and every individual involved which made it
possible to fulfil this dream and deliver a marvel of its kind.
50. Technical risk
10%
Environment risk
20%
Operational risk
10%
Force majeure risk
5%
Legal risk
25%
Financial risk
25%
Political
5%
Technical risk Environment risk Operational risk Force majeure risk Legal risk Financial risk Political
53. • Located @ Maraimalai Nagar, chennai
• Site extent : 10.2 acres
• Number of blocks: 11
• Total units : 420 units
• No of floors: G+9+ 2 basement
LOCATION MAP
56. AREA STATEMENT :
TOTAL BUILT UP AREA – 7,42,00 SQFT
S.NO FEATURES AREA in sqft
1. BLOCK A-D 304000
2. BLOCK E 38000
3. BLOCK F-I 256000
4. BLOCK J&K 144000
5. FSI 2.4
57. COST CALCULATIONS
Contents brief
Cost per sq/ft 2000
Total cost of building ( at estimation
stage )
148.4 cr
Total cost overrun ( at finishing stage ) 162.94 cr
Cost overrun 14.54 cr
Percentage of overrun cost of the
building
9.8 %
Risk factors encountered Technical
,operating,finance,environm
ental,forcemajeur
58. TOTAL NO. OF RISKS IN THE PROJECT AND THEIR CATEGORIES :
S.NO RISKS CATEGORIES
1. TECHNICAL RISKS Contractor ,project
management , schedule
2. FINANCIAL RISKS Finance
3. OPERATIONAL RISKS Labor , equipment , material
4. ENVIRONMENTAL RISKS Environment , site location ,
sub-surface
5. FORCE MAJEURE RISKS Engineering and design
60. C
R
I
T
E
R
I
A
SUB
CRITERION
ATTRIBUT
E RISK
FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LOW
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Environmental Earthquake
Precipitation
/flood
Unpredicted
Weather
condition
Pollution
Sub-surface Unexpected
Surface
conditions
Archeological
survey done
Geo-technical
investigation
Site location Construction
area (rural/urban
Access
conditions
On-site
congestion
Delay in permits
and licenses
Security
requirements
Safety regulation
Differing site
PROXIMITY CHART
61. C
R
I
T
E
R
I
A
SUB
CRITERI
ON
ATTRIBUTE
RISK FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LO
W
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Labor Labor skills level
Labor availability
Drop in Labor
productivity
Labor accidents
Human resource
planning
Working hours
restrictions
Equipment Equipment quality
Equipment breakdown
Equipment maintenance
Equipment malfunctions
Material Material delivery
Material storage
Material theft & damage
Material procurement
Non-conforming material
Material monopoly
62. C
R
I
T
E
R
I
A
SUB
CRITERI
ON
ATTRIBUTE
RISK FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LO
W
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Owner Owner type
management strategy
organization structure
Work/ labor permits
on-site access
Engineering
and Design Team experience
Project goal
Complexity of design
Ad-hoc consultants
Design error
Contractor Contractor pre-qualified
New technology
Defective work
Rework
no of subcontractors
Contractor Reputation
Nominated sub-
contractors
No. of current projects
63. C
R
I
T
E
R
I
A
SUB
CRITERI
ON
ATTRIBUTE
RISK FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LO
W
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Project
management
Management experience
Owner quality assurance
Scope definition
quality control process
Type of contract
availability of variations
Financial Type of Funds
Fluctuation in prices
Invoices delay
Change in currency rate
Owner financial capacity
Progress payment
rate of interest
tax rate
foreign currency
project size
Political Bribery and Corruption
Wars and revolutions
Changes in laws and
regulations
Schedul Fast track schedule
64. Environmental sub surface Site location Labour Equipment Material Engineering And design
THE RISK FACTORS WHICH AFFESCT EACH RISK IN AKSHAYA METROPOLIS
ENVIRONMENTAL OPERATING FORCE MAJEUR
65. Contractor Project management FinancialPoliticalSchedule
THE RISK FACTORS WHICH AFFESCT EACH RISK IN AKSHAYA METROPOLIS
TECHNICAL FINANCEFORCE MAJEUR
72. SCHEDULING RISK (TIME MANAGEMENT )
PROCESS DURATION REMARKS
Actual planed 2 years 8 months
Project starts on June 2013
Project ends on November 2016
Project duration 3 years 5 months (1249 days )
Project delay 10 months Because of some risks which had
encountered during the construction
Risk encountered :
1. Natural calamities
2. Labor shortage
3. Non- availability of materials
4. 3 months the project was stopped due to cash flow
5. Delay in flat sale
6. Due to cash flow 2 block stopped
75. LOCATION MAP:
• Located @ Basin
Bridge , chennai
• Site extent : 3.2
acres
• Number of blocks:
2
• Total units : 216
units
• No of floors:
G+18+1 basement
+ stilt parking
76. AREA STATEMENT :
TOTAL BUILT UP AREA – 2,40,380 SQFT
S.NO FEATURES AREA in sqft
1. BLOCK 1 196882.69
2. BLOCK 2 43281.68
3. FSI 2.494
79. COST CALCULATIONS
Contents brief
Cost per sq/ft 2400
Total cost of building ( at estimation
stage )
57.66 cr
Total cost overrun ( at finishing stage ) 64.6 cr
Cost overrun 6.922 cr
Percentage of cost overrun of the
building
11.9 %
Risk factors encountered Technical
,operating,finance,environm
ental,forcemajeur
80. RISKS IN THE PROJECT AND THEIR CATEGORIES :
S.NO RISKS CATEGORIES
1. TECHNICAL RISKS Contractor ,project
management , schedule
2. FINANCIAL RISKS Finance
3. OPERATIONAL RISKS Labor , equipment , material
4. ENVIRONMENTAL RISKS Environment , site location ,
sub-surface
5. FORCE MAJEURE RISKS Engineering and design ,
political
82. C
R
I
T
E
R
I
A
SUB
CRITERION
ATTRIBUT
E RISK
FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LOW
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Environmental Earthquake
Precipitation
/flood
Unpredicted
Weather
condition
Pollution
Sub-surface Unexpected
Surface
conditions
Archeological
survey done
Geo-technical
investigation
Site location Construction
area (rural/urban
Access
conditions
On-site
congestion
Delay in permits
and licenses
Security
requirements
Safety regulation
Differing site
PROXIMITY CHART
83. C
R
I
T
E
R
I
A
SUB
CRITERI
ON
ATTRIBUTE
RISK FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LO
W
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Labor Labor skills level
Labor availability
Drop in Labor
productivity
Labor accidents
Human resource
planning
Working hours
restrictions
Equipment Equipment quality
Equipment breakdown
Equipment maintenance
Equipment malfunctions
Material Material delivery
Material storage
Material theft & damage
Material quality
Non-conforming material
84. C
R
I
T
E
R
I
A
SUB
CRITERI
ON
ATTRIBUTE
RISK FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LO
W
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Owner Owner type
management strategy
organization structure
Work/ labor permits
on-site access
Engineering
and Design Team experience
Project goal
Complexity of design
Ad-hoc consultants
Design error
Contractor Contractor pre-qualified
New technology
Defective work
Rework
no of subcontractors
Contractor Reputation
Nominated sub-
contractors
No. of current projects
85. C
R
I
T
E
R
I
A
SUB
CRITERI
ON
ATTRIBUTE
RISK FACTOR
Risk Probability COST RISK IMPACT SCHEDULE RISK IMPACT
VER
Y
LO
W
LOW MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LO
W
MODERAT
E
HIGH VERY
HIGH
VERY
LOW
LOW MODERA
TE
HIG
H
VERY
HIGH
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Project
management
Management experience
Owner quality assurance
Scope definition
quality control process
Type of contract
availability of variations
Financial Type of Funds
Fluctuation in prices
Invoices delay
Change in currency rate
Owner financial capacity
Progress payment
rate of interest
tax rate
foreign currency
project size
Political Bribery and Corruption
Wars and revolutions
Changes in laws and
regulations
Schedul Fast track schedule
86. Environmental sub surface Site location Labour Equipment Material Engineering Anddesign
ENVIRONMENTAL OPERATING FORCE MAJEUR
THE RISK FACTORS WHICH AFFESCT EACH RISK IN OCEAN HEIGHTS
87. Contractor Project management FinancialPoliticalSchedule
TECHNICAL FINANCEFORCE MAJEUR
THE RISK FACTORS WHICH AFFESCT EACH RISK IN OCEAN HEIGHTS
94. SCHEDULING RISK (TIME MANAGEMENT )
PROCESS DURATION REMARKS
Actual planed 1 years 10 months
Project starts on September 2014
Project ends on January 2017
Project duration 2 years 4 months (853 days )
Project delay 6 months Because of some risks which had
encountered during the construction
Risk encountered :
1. Natural calamities
2. Labor shortage
3. Quality ensuring
4. Execution safety
5. Material shortage
96. Over all Cost overrun for both the projects in
percentage :
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
akshaya ocean heights
cost overrun
cost overrun
Akshaya - 9.8 %
Ocean heights – 11.9 %
97. Risks comparison for both case studies :
Risks ocean heights akshaya
Technical 37% 40%
Financial 27% 26%
Operating 22% 24%
environmental 5% 7%
Force majeur 9% 3%
98. Risks comparison for both case studies :
0%
5%
10%
15%
20%
25%
30%
35%
40%
ocean heights
akshaya
99. Inference :
the technical risk was higher in akshaya because of the no.of units in the project is higher than the ocean heights
, its dificult for the management to look after all the units and the site area is bigger
The environmental risk is also higher in akshaya because of the pollution problems, the roads and passages fo
each blocks were not properly constructed . The site area is also so big that it was difficult to maintain properly .
The ocean heights faced few months delay because of the investors finance problems , so they forced to stop th
project
For 2 months .
The cost overrun for the aksaya is about Rs14.54cr and ocean heights is Rs6.92cr
The akshaya faced lots of financial issues because the units are not accupied as per the scheduled dates , so
they have to stop the project for 6 to 7 months .
The engineering and design team in ocean heights made the project to rework for one month during the starting
stage of
the project .
Both the projects faced lots of operational risks due to improper maintenance of the facility team , beaucse once
