Project Risk Management

1. Learning Risks
Concept of Risks Risk Identification Risk Mitigation
Strategies
Risk Management
Process
Types Documentation
Tools and Procedures
of Proj Risk Mngt
Analyzing Risks Risk Management
Principles
Risk and Reward Need for Risk
Management
Role of PD

2. Concept of Risk
• Risk Management is the Art and Science of Identifying, Analyzing,
Mitigating the risks of implementing the project successfully.
• Risk changes
• Project Risk vs Project Constraints
• Potential Variability of Output
• Can be overcome by timely planning
• No Risk No Gain

3. Various Risks in Project
• Financial Risks
• Technical Risks
• Execution Risks
• Legal Risks
• Contractual Risks
• Operational Risks (Cyber etc)
• Strategic Risks

4. Risk Issues in Green Book-DPP
Template
Clause Issues
Format of Feasibility Study
(Clause-3-Cha)
SWOT Analysis
Section-5 Environmental Sustainability, Climate Resilience and Disaster Risk Analysis
Section 9: Risk (Uncertainty) and Sensitivity Analysis Issues regarding uncertainty in flow
of costs and benefits
The questions that need to be answered are: (a) What are the major risks that
may affect project?
(b) How will the project be affected if the risk event materialized?
(c) Possible mitigation measures needed
(d) How sensitive are the assumptions used in the financial and economic
models
(e) Are there any risks, legal and regulatory obligations that could increase
costs or decrease the benefits? If any, how much project implementation may
be hampered or benefit of the project may be reduced?

5. Padma Rail Link Project- Activity Plan

6. 6
Planning Commission & Linkage with other
Ministries/Divisions/Organizations
Planning
Commission
NEC/ECNEC
ERD
FD
Ministries/
Divisions
BBS IRD
IMED
4 Sector Div/ Planning Division/
Programming Division/GED
BIDS

7. Organizations and Planning Activities
7
Physical
Infrastructure
Division
Programming
Division
Agriculture, Water
Resources and
Rural Institution
Division
Socio-Economic
Infrastructure
Division
Industries and
Energy
Division
General
Economics
Division
Planning Commission Ministry of Planning Ministry of Finance
IMED Statistics Division
Budgeting
Planning Division
Carries out surveys
and stores data
Receive list of projects
from sector divisions and
includes in ADP
Monitors &
evaluates
project
implementation
Public Investment
Management
Administrator
Prepares ADP/RADP
Carries out
policy
planning Sector divisions receive project
proposals from Line Ministries and
analyze and evaluates these and
places before ECNEC

8. 8
http://www.plandiv.gov.
bd/sites/default/files/file
s/plandiv.portal.gov.bd/f
iles/ed5fdc63_f6d6_42
10_a0d6_2feb8677cbf8
/Total%20Book.pdf

9. DPP
Part A:
Summary
13
Points/Issues
to be covered
Part B:
Description
21
Points/Issues
to be covered
9

10. Part A: Summary
Source
Mode
GOB (FE) PA (RPA) Own Fund (FE) Others
(Specify)
PA Source
1 2 3 4 5 6
Loan/credit
Grant
Equity
Other (Specify)
Total
1.0 Project Title :
3.0 Objectives and Targets (of Beneficiaries) of the Project (Please specify in quantity and/or in percentage and write in bullet form) :
6.0 Mode of Financing :
6.1 Mode of Financing with Source :
10

11. 9.0 Estimated Cost Summary (Taka in Lac):
Economic Code Economic
Sub-Code
Economic
Sub-code
wise Item
Description
Unit Quantity Total
Cost*
GOB
(FE)
Project Aid Own
Fund
(FE)
Others % of
Total
Project
Cost
RPA DPA
Through
GOB
Special
Account
Through
PD
Through
DP
1 2 3 4 5 6 7 8 9 10 11 12 13 14
(a)Revenue
Sub
Total(Revenue):
(b)Capital
Sub Total
(Capital):
©Physical
Contingency:
(d)Price
Contingency
Grand Total (a
+ b + c + d):
11

12. 10.0 Log Frame:
i) Planned Date for Project Completion:
ii) Date of Log Frame Preparation :
11.0 Project Management:
11.1 Proposed Project Management Setup
11.2 Implementation Arrangement
12.0 Financial and Procurement Plan:
12.1 Procurement Plan
12.2 Year wise Financial and Physical Target Plan
Signature of the Officer(s) Responsible for
the Preparation of the DPP with Seal and Date
12

13. Part B: Description
16.0 Whether any pre-appraisal/feasibility study/pre-investment study was done?
17.0 Financial Analysis: (Attach Calculation Sheet)
17.1 Net Present Value (NPV) (considering 15% discount rate) (i) Financial (ii) Economic
17.2 Benefit-Cost Ratio (BCR) (considering 15% discount rate) (i) Financial (ii) Economic
17.3 Internal Rate of Return (IRR) (i) Financial (ii) Economic
19.0 Basis of Item wise Cost Estimate and Date:
21.0 Detailed Annual Phasing of Cost
22.0 Specification/Design of Major Items (To be attached)
23.0 Amortization Schedule for Projects having Involvement of Loan from Government
13

14. 24.0 The effect/impact, adaptation and specific mitigation measures thereof, if any, on
24.1 other projects/existing installations
24.2 environmental sustainability like land, water, air, bio-diversity, ecosystem
services (If the project is ‘Red Category’ attach the EIA document)
24.3 future disaster management, climate change
24.7 organizational arrangement/setup
24.9 regional disparities
25.0 Whether environmental clearance under the ECA 1995 (Revised 2010) has been
obtained? (If yes, attach the certificate. If not, mention the cause)
26.0 Specific linkage with Perspective Plan/Five Years Plan/SDGs/Ministry/ Sector Priority
(Mention the pages with clauses of respective document/ attach the relevant pages of those
document)
14

15. 29.0 Major Conditionality (ies) for Foreign Aid:
30.0 Involvement of Compensation, Rehabilitation/ Resettlement: (Indicate
the magnitude and cost, if applicable)
31.0 Risk Analysis and Mitigation Measures: (Identify risks during
implementation & operation)
Signature of the Head of the
Executing Agency With Seal and Date
Signature of the Secretary of the
Sponsoring Ministry/Division with Seal and Date
15

16. Risk Management Process
• Effects
• Repercussions
• Avoid
• Retain
• Rank
• Score
• Measure
• Quantify
• Name
• Categorize
• Understand
Identify Analyze
Assess
Manage

17. Stages
Risk
Identification
(Listing)
Risk Analysis
(Prioritize)
Risk Planning
(Mitigation
and Actions)
Risk Monitoring (Tracking and
Controlling)

18. Feasibility Study Identifies Risks
Project appraisal is required to decide if the project is to be undertaken. Important
areas of project analysis:
(1) Technical feasibility
(2) Financial feasibility
(3) Economic feasibility
(4) Environmental feasibility
(5) Market feasibility
(6) Collection of data
(7) Analyzing cost and benefit
(8) Legal feasibility
(9) Operational feasibility
(10) Social feasibility
18

19. Feasibility Study Format
• Basic Information
• Introduction
• Market/Demand Analysis
• Problem Statement
• Relevance of the Project Idea
• Proposed Project Interventions
• Stakeholders
• Demand Analysis
• SWOT Analysis
• Technical/Technological & Engineering Analysis
• Location
• Technical Design
• Output Plan
• Cost Estimates
• Implementation Timeline
• Environmental Sustainability, Climate Resilience And Disaster Risk
Analysis
• Environmental, Climate Change and Disaster Risk Analysis
• Assessment of Disaster Resilience of the Project
• Cost-Benefit Analysis
• Financial Analysis
• Economic Analysis
• Human Resource and Administrative Support Analysis
• Institutional and Legal Analysis
• Risk (Uncertainty) and Sensitivity Analysis
• Alternative/Option Analysis
• Recommendation and Conclusion
• Annexes
19

20. Cost-Benefit Analysis:
• Financial Analysis
Describe the components of costs and benefits at market prices including
option analysis.
(a) Identify the components of cost & benefit;
(b) Transfer them in monetary value;
(c) Construct cash flow;
(d) Identify the Key Assumptions considered in exercises; then
(e) Compute the following indicators and interpret the results:
• Financial Net Present Value (FNPV)
• Financial Benefit Cost Ratio (FBCR)
• Financial Internal Rate of Return (FIRR)

21. Project selection criteria based on IRR, BCR,NPV
NPV(Net Present Value): refers to the difference between the value of cash now and the value of cash at a
future date. It determines whether the anticipated financial gains of a project will outweigh the present-day
investment.
if NPV >0 ……. accept the project ;
if NPV <0 ……… reject
if NPV =0 ………. Ambiguous
BCR(Benefit Cost Ratio): is the ratio of the benefits of a project compared to the costs calculated in terms of
Present Value (PV).
if BCR >1 ……… accept
if BCR < 1 ……… reject
if BCR = 1 …….. ambiguous
IRR(Internal Rate of Return): defined as the interest rate at which a monetary investment will return a zero
Net Present Value (NPV).
if IRR >market rate of interest … accept
if IRR < market rate of interest …reject
if IRR =market rate of interest ..ambiguous
21

22. Economic Analysis
•Economic adjustments from financial data using standard conversion factor; after that costs and
benefits are appraised from the point of view of the entire economy.
(a) Identify the direct, indirect and associated cost and benefit components;
(b) Adjust them where necessary;
(c) Convert the value of cost and benefit components into economic price by using Standard
Conversion Factor (SCF) determined by the Government;
(d) Construct the cash flow;
(e) Mention the Assumption;
(f) Compute the following indicators and interpret the results:
(a) Economic Net Present Value (ENPV)
(b) Economic Benefit Cost Ratio (EBCR)
(c) Economic Internal Rate of Return (EIRR)

23. Human Resources and Administrative Support Analysis
(During Implementation and Post Implementation of the project)
Key issues to be addressed:
(a) What types of managerial and skilled workforces are needed?
(b) Ability to provide the managerial and skilled workforces?
(c) Institutional capacity (financial & technical) toretain the project output functional?
(d) Equipped with skilled & experienced workforces to operate the project output?
(e) Adequate fund under its recurring budget to incur the operational expenditure of the
project output?
(f) Is timing of project consistent with organizational capacity (in terms of quantity and
other)?

24. Institutional and Legal Analysis
•Illustrate the legal restrictions (if any) :
(a) Does the project match with the allocation of business or mandate of the project
entity?
(b) Are the capabilities and physical facilities of the agency being properly utilized?
(c) Is there any need for adjustment (reforms) in the policy and/or institutional setup?
(d) Any Legal adjustments required before the project is implemented?
(e) Suitable skills and capacity in line with the project requirements?
(f) Incentives or penalties in place to ensure the project delivery on time andwithin the
budget?
(g) Critical governance issues that may affect implementation?
(h) Challenges related to cross-cutting issues to be addressed?
(i) Others (if any).

25. Risk (Uncertainty) and Sensitivity Analysis
Uncertainty in flow of Costs and Benefits though out the project period should be
taken into considerations.
(a) What are the major risks that may affect project?
(b) How will the project be affected if the risk event materialized?
(c) Possible mitigation measures needed?
(d) How sensitive are the assumptions used in the financial and economic
models?
(e) Are there any risks, legal and regulatory obligations that could increase costs or
decreasethe benefits?

26. Why Project Fails?

27. • Feasibility Study
• Setting Goals, targets etc.
• Source of Funding
• Environmental Impacts
• Implementing Agency & Sponsoring Ministry
• Components Selection
• ToR of Manpower/ Organogram
• Implementation/Work/Activity Plan
• Approval of Manpower from Finance Division
• Procurement Plan
• Year-wise Financial & Physical Target Plan
• Financial Analysis
• Linkage with National Policy
• Log-Frame
• Risk Analysis
• Structure & ToR of PSC, PIC etc.
Project Preparation
9

28. Structure of LFA
Project Description Objectively verifiable
Indicators of Achievement
(OVI)
Sources and means of
verification (MOV)
Assumptions
Goal What is the overall broader
impact to which the action will
contribute?
What are the key
indicators related to the
overall goal?
What are the sources of
information for these
indicators?
What are the external factors
necessary to sustain
objectives in the long terms?
Purpose What is the immediate
development outcome at the
end of the project?
Which indicators clearly show
that the objective of the action
has been achieved?
What are the sources of
information that exist or can
be collected? What are the
methods required to get
these information?
Which factors and conditions
are necessary to achieve that
objective? (external
conditions)
Outputs What are the specifically
deliverable results envisaged
to achieve the specific
objectives?
What are the indicators to
measure whether and to
what extent the action
achieves the expected
results?
What are the sources of
information for these
indicators?
What external conditions
must be met to obtain the
expected results on
schedule?
Activities What are the key activities to
be carried out and in what
sequence in order to produce
the expected results?
What are the means required to
implement these activities, e.g.
personnel, equipment, supplies,
etc.
What are the sources of
information about action
progress?
What are the action costs?
What pre-conditions are
required before the action
starts?
42

29. 29
Narrative Summary
Objectively Verifiable
Indicators (VOI)
Means of Verification (MOV)
Important Assumptions
(IA)
Goal • To promote economic growth by
facilitating industrial development,
trade and commerce
• To enhance regional connectivity
with neighbouring countries
• Poverty reduction and increase of livelihood standard in the project areas
• Increase contribution to GDP and expand employment opportunities. This will improve health
care, education facilities and social security of people within the area of influence
• Enhance industrial development and agricultural activities.
• Decrease in % of poor people
• Increase in regional trade due to the movement of passenger, goods and cargo among the
South Asian nations
• Trade volume information of Ministry of
Commerce
• BBS HIES data
• Project Completion Report
• Traffic Volume data of HDM of RHD
• The agreement on improving port facilities
in all the neighbouring countries is
implemented
• There is no trade barrier
• Adequate investment ensured by GoB and
Development Partner
Objective/
Purpose
• To enhance the capacity of an
important section of SASEC corridor
• To reduce road hazards and
blackspots
• Increased roadway capacity of the highway
• Travel time saving and savings in transport cost for passenger.
• Savings in Vehicle operating cost
• Improving road safety for the corridor.
• HDM Traffic count provides the capacity of
highway.
• Road user cost of Economic Circle of RHD
• BRTA and ARI, BUET accident database
• The traffic flow along this corridor not
affected due other substandard sections
• No man made or natural disaster occurs
• The traffic regulation is complied
Output • Embankment constructed
• Pavement constructed
• Bridge, culvert, flyovers,
overpass, underpasses,
interchange constructed.
• Miscellaneous work
completed.
• 209.328 km (72.73 Lakh m
3
) of 4-lane highway
by Oct 2025
• 1 interchange, 12 Overpass/Railway Overpass
(7180.19 m), 66 Bridges (6020 m), 305 Culverts
(1,489.15 m), 17.59 Km Rigid Pavement (2.92
Lakh m
3
) and 26 Pedestrian Overpass (1271.40
m) by Oct 2025
• Project Completion Reports
• Quality control report
• Field visit reports by Monitoring
team
• Spot checks by Project Managers
• Procurement and implementation
report
• IMED reports
• The project is not hindered due
to withdrawal of funds or
contractual disputes
• No man made or natural
disaster occurs
• No litigation arises
Input • Resettlement
• Embankment construction
• Pavement construction
• Bridge, culvert, flyovers, overpass
construction
• General, Incidentals and other civil
•
Resettlement cost of BDT 374 crore by Sept2025
• Embankment- Cost of BDT 1664.06 cr by June 2024
• Pavement- Cost BDT 5713.05 crore by October 2025
• Structure-Cost BDT 5216.69 crore by October 2025
• Annual Development Plan
• Project Managers record and progress report
of the project
• Contractors record and reports
• Timely availability of fund
• No hindrance in resettlement
• Availability of construction materials on
time
• No natural calamity occurs
• No serious political disturbance occurs
LFA – SASEC Dhaka-Sylhet Corridor

30. 30
Gantt Chart: Dhaka-Sylhet Highway 6-Lane upgradation project
SL No. Major Activities of the Project Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1 PIU Formation
2 Procurement of Supervision Consultant
3 Procurement of Civil Works Package WP1, WP2
4 Procurement of Civil Works Package WP3, WP4
5 Procurement of Civil Works Package WP5, WP6
6 Execution of Supervision Consultancy Service
7 Execution of Work Package WP1, WP2
8 Execution of Work Package WP3, WP4
9 Execution of Work Package WP5, WP6
10 DNP of Work Package WP1, WP2
11 DNP of Work Package WP3, WP4
12 DNP of Work Package WP5, WP6
13 Closure of the Project
2024-25 2025-26
2020-21 2021-22 2022-23 2023-24

31. Section 9: Risk (Uncertainty) and Sensitivity Analysis
Uncertainty in flow of Costs and Benefits though out the project period should be
taken into considerations.
(a) What are the major risks that may affect project?
(b) How will the project be affected if the risk event materialized?
(c) Possible mitigation measures needed?
(d) How sensitive are the assumptions used in the financial and economic models?
(e) Are there any risks, legal and regulatory obligations that could increase costs or
decreasethe benefits?

32. Methods of Risk Management
Avoiding Risk Retaining Risks Mitigating Risk Transfer of Risk
Closing Accepting the
Risk
Changing Scope
Changing
Strategy

33. Risk Management- Tripple Constant
Scope/
Deliverables
Time
Quality
Cost

34. Planning Project Management
Project Management Plan Risk Management Plan Identifying Risks
Time Management Plan Determining Probability
Budget Management Plan Process- Who, What,
When, How to manage Risk
Evaluating Impacts
Quality Management Plan Tools- PM Software, Excel,
Templates
Planning Responses
Change Management Plan Activities- Risk
Management throughout
the project life
Documenting Risks
Issues Management Plan Tracking Risks
Risk Management Plan

35. Project Name: Installation of 3rd Submarine
Cable for Expansion of International
Telecommunication System of Bangladesh
Risk Analysis in DPP

38. Risk Analysis in Dhaka Ashulia Elevated Expressway Project