Prakhar gupta risk analysis report

WAREHOUSES - PROJECT TERMIK
Quito, Ecuador
By : BGH Group
Prakhar Gupta
Pia Emilia Bertero
Ziwei Hu
CE 8283
Risk Analysis
New York University
Fall 2016

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Table of Contents
Part 1. Project Proposal
Introduction
Scope of Work
Design Quality
Cost Estimation
Schedule
Purpose of Risk Management Plan
Part 2. Risk Identification
Procedures
Risk Identification
Part 3: Risk Categories and Organization
Risk Categories and Preliminary Analysis
Influence Diagrams
Part 4. Qualitative and Quantitative Analysis
Part 5. Risk monitoring, Controlling and Reporting
1. Traffic accident
2. Cost increase
3. Policy changes
4. Accessibility
5. Leadership
6. Quality of construction materials
7. Rock bed found after certain depth
8. Contamination of Soil
9. Delay in water and electricity supply
Recommendations
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Figures
Figure 1. Photograph of the project location
Figure 2. Project Termik referential graph, and chart of areas
Figure 3. Project Termik Summary
Figure 4. Risk Categories of Project Termik
Figure 5. Link between a risk and the affected activities.
Figure 6. Parameters of cost/duration for activities on the schedule
Figure 7. Schedule with activities, cost, duration, start/finish dates
Figure 8. Objective of the quantitative risk analysis.
Figure 9. Distribution Graph of Duration (Without Risk)
Figure 10. Distribution Graph of Duration (With Risk)
Figure 11. Distribution Graph of Finish Date (Without Risk)
Figure 12. Distribution Graph of Finish Date (With Risk)
Figure 13. Distribution Analysis of Finish Date
Figure 14. Distribution Graph of Cost (Without Risk)
Figure 15. Distribution Graph of Cost (With Risk)
Figure 16. Distribution Analysis Graph of Cost
Figure 17. Tornado Cost Sensitivity
Figure 18. Distribution Analysis Graph of Cost before and after risk
Figure 19. Risk Mgmt. Process
Tables
Table 1. Risk Matrix with likelihood and impact
Table 2. Risk Categorization of Project Termik
Table 3. Risk Categories & Qualitative and Quantitative Analysis
Table 4. Probability scale, Impact and scale types, PID from Primavera
Table 5. Risk influence in the project
Table 6. Qualitative analysis with probability of occurrence of risks
Table 7. Quantitative analysis with probability/activities
Influence Diagrams
Influence Diagram 1. Construction and Design Influence Diagram
Influence Diagram 2. Environmental Risk Influence Diagram
Influence Diagram 3. Financial Risks Influence Diagram
Influence Diagram 4. Supply Risks Influence Diagram
Influence Diagram 5. Legal Risks Influence Diagram
Influence Diagram 6. PM Risks Influence Diagram
Influence Diagram 7. Safety Risks Influence Diagram
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Part 1. Project Proposal
Introduction
Ecuador is a country that uses US dollars and because of it, it's expensive to produce finished
goods. Consequently, commerce is a practiced activity. Importing goods, storage and selling
those products consist an important part of the economy.
The project is located within a residential/industrial zone of the northeast part of Quito,
Ecuador. By being so close to the city and having many different routes to the center and
southern part of Quito, this piece of land is well located for its purpose.
The project is connected to Quito international airport by a recently built highway (dist. 9km
approx.) and many other highways that allow an easy transportation of goods, not only to the
entire city but to smaller cities and the countryside surrounding it.
Site Location
Figure 1. Photograph of the project location Lat: -0.102784 Lon: -78.443866, Google Maps

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Scope of Work
This project is intended to satisfy storage needs for small and medium businesses. The idea is to
build 14 warehouses in the northeast of the capital, Quito. The space is designed to store goods
of different nature until they reach a final destination. Construction will be broken down into
consecutive phases like: site preparations and permits, land movement and excavation for
foundations, construction of metallic superstructure, Mechanical Electrical and Plumbing (MEP)
Rough-in and interior finishes.
Design Quality
The Project is designed to satisfy the requirement to store finish products for small and medium
businesses until they are delivered to other locations.
Figure 2. Project Termik referential graph, and chart of areas

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Cost Estimation
We have estimated that the total cost would be around 5.1 million USD, divided into this
phases:
● Preliminary work - $138,351
● Excavation - $485,110
● Walls and sub structural works – $1,500,000
● Metallic Structure – $1,090,000
● Finishing Work – $950,000
● Exterior Work, Other Utilities, Water and Electricity supply – $1,170,000
Schedule
We anticipate the construction will take 14 – 16 months. This estimated schedule will depend
upon the anticipated risk within the projected. We have allocated 6 months for the excavation
and substructure. The other 6 months for the superstructure and the rest of the work is
allocated for 3 months.
Purpose of Risk Management Plan
Understanding all potential risks before the construction starts will help the project team better
prepare itself to go forward successfully. If one of those risk scenarios threatens the project
execution, the team will be prepared and have some mitigation plan to deal with all possible
outcomes.
Our goal is to identify those risks and understand the magnitude they could have and calculate
or determine possible losses. Also, to develop a plan or strategies to deal with them. We are
going to use both quantitative and qualitative analysis techniques to develop an understanding
of the effects of those risks to our project success.
Also with the help of Primavera, a software that will allow us to better plan the project
schedule, manage risks and their influence in the project, we could check if the duration of the
project, the cost and the end date will change once we enter the risks.

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Part 2. Risk Identification
Procedures:
1. Risk Identification: Through analyzing the concept of operations we can identify
possible risks in every stage of the project by simulating realistic undesirable scenarios.
And we can understand things that can possibly go wrong and how could it effect in the
project.
2. Impact and likelihood: Once we have identified the risks, we can predict how likely is
that risk going to happen. The impact will be calculated by the severity of the losses or
consequences each risk may cause. The likelihood will make us understand the
probability or frequency of that scenario.
3. Risk Assessment: The combination of both impact and likelihood of each risk will help to
understand the project vulnerabilities through Qualitative and Quantitative analysis. It
will also help to decide which risks should be prioritized.
4. Mitigation: For every risk, we can develop a plan to prevent and mitigate every situation
that has been formulated, so we are prepared for the best and worst case scenarios.
5. Identification of Hazards: Physical situations with a potential of an undesirable loss or
consequence will be analyzed. In this case the proper personal protection equipment
will be taken into consideration for hazards and will be inside the risk of personnel
safety. For the construction of the warehouses, it's expected to have mechanical,
thermal, chemical, electrical and information hazards.
6. Risk Management: It's a continuously asses of risk related to uncertainties. It's a
constant practice to prevent, control and minimize losses due to risk exposure. We can
make a plan of action towards management this risks. But risk management will occur
during construction.

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7. Risk Communication: Communicate possible hazards and ways of procedure against
diverse risks would be a perfect way to prevent losses or consequences. Stakeholders
must be aware of all possible risks and uncertainties, so the process it's inclusive and has
different points of view.
Risk Matrix
# Risk
Consequences or Losses
Likelihood Impact
Environmental Social Budget Schedule Quality
1 Contamination of soil x x x Medium High
2 Rock bed found after certain depth x x Low High
3 Delay in water and electricity supply x x x Medium Medium
4 Delay in Supply of Materials x x High Medium
5 Fail of Formwork during the casting of the concrete x x x x Low High
6 Mismatch of steel structure during erection x x x Low High
7 Slips, Trips and Falls x x x Medium Low
8 Fail of the Object x x x x Low Low
9 Bad weather x x x x Medium Medium
10 Dispute Between Labor Union and management x x x Medium High
11 Political Instability (Change of LAW) x x Medium High
12 Accessibility x x Medium Medium
13 Community protests x Low High
14 Permits x Medium High
15 Insecurity x x x High Medium
16 Corruption x x x Medium Low
17 Environment (DUST) x x High Low
18 Quality of Construction Materials x Medium Medium
19 Leadership x x x x Medium High
20 Material Shortage x x Medium Medium
21 Natural disaster x x Low High
22 Traffic accidents x x Low Low
23 Cost increase x Medium High
24 Policy Change x x High High
25 Lack of workers x x High Medium
26 Personnel Safety x Medium High
27 Equipment Malfunction x Low Medium
28 Currency and Exchange Rate x x x Medium High
29 Inexperience x x x x Medium High
30 Fire Hazards x x x Low High
Table 1. Risk Matrix with likelihood and impact

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Risk Identification
1. Contamination of soil
Cause – Site located at an industrial area there is a high probability of contamination of soil.
Effect – May have to dig deeper than it is designed for the construction of foundation or will
require to backfill compact soil to provide strong base to the foundation
Cause – Possibility of rock bed after certain depth
Effect – It will require rock cutting machine and other Machineries. It will also require extra
labors and man hours which will affect the cost and will delay the schedule estimated for the
excavation of the site
Cause – As supply is been given by the government, it has possibility we may not get supply in
time .
Effect – It will delay concrete construction work, as the concrete requires high amount of curing
at initial stage.
4. Delay in supply of materials
Cause – Due to bottlenecks and congestion in the traffic it has high possibility of delay in the
supply if the materials.
Effect – It can affect other work and increase the labor and machinery cost as well.
5. Fail of Formwork During the Casting of the concrete
Cause – Formwork could fail to carry the load of the concrete due week support and tie with
each other.
Effect – May cause serious damage to the worker and laborers. It will also lead to wastage of
material and ultimately to the cost. In a very serious case it may suspend the work for few days.

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6. Mismatch of Steel Structure During Erection
Cause – Since it is steel structure, fabrication is being done at specific are and then it is brought
to the site. Which may lead to a mismatch during erection.
Effect – Wastage of the material and will suspend work for few hours or a day. And will require
to redesign the parts.
7. Slips, Trips and Falls
Cause – Since it is a steel structure and labors will be working at some heights.
Effect – Fatal accident of labors.
8. Fail of the Object
Cause - Improper designing of the structural if not take properly, Cheap quality used for
construction.
Effect - Serious accident and wastage of material and man hours.
9. Bad weather
Cause – Due to heavy rain work may suspend for a day or two.
Effect – Suspend work for a day to weeks which will delay the construction work and may
damage the material exposed to weather.
10. Dispute Between Labor Union and management
Cause – Improper behavior of management, could happen related to wage or could be
regarding safety.
Effect – Unknown delays in construction schedule, which may affect the cost.
11. Cash Flow Interruptions
Cause- The government is known for its radical behavior in terms of creating new laws, that can
create panic and stop investment.
Effect - Cash flow could be affected; therefore, the initiation of the construction could be
delayed or construction could be paralyzed. It can also make stakeholders to doubt the extent
of the project, the investment, etc.

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12. Accessibility
Cause – The street to access the site of construction is always congested due to a vehicular
revision that is located next to the project. This place has a queue of cars waiting to be checked
out.
Effect – Trucks with materials, machinery, big trucks and other vehicles accessing the site can
be obstructed because of these phenomena, delaying the delivery of materials and or services
needed to proceed with the project.
13. Community protests
Cause – Since the location of the project is in a industrial/residential zone, the resident
neighbors could have complaints about noise, contamination, traffic, road blocks, etc.
Effect – There could be complaints from the residents of the area regarding the issues that a
construction of that extent can cause. At the end the project can be delayed or even stopped.
14. Permits
Cause – Construction and environmental permits need to be obtained.
Effect- Permits don’t have an specific time of processing. Sometime they can take weeks or
even months. Bureaucracy and a fast personnel shift in the office that give the permits often
causes delays and time uncertainty. Delays in the construction can be serious.
15. Insecurity
Cause – The area is catalogued as a dangerous area where a lot of robberies occur. Expensive
equipment and material can be targeted by thieves.
Effect – The construction can be delayed because even if the materials or machinery have
insurance the reposition will take time and money. The cost of the project could go up. Workers
can feel threatened and the community surrounding the area.
16. Corruption
Cause – Corruption is a common practice in the construction area of Ecuador's market.
Effect – Obtaining permits and keeping them can be affected by corruption. In many cases a
payment is requested by local authorities that can threaten to close the project.

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17. Environment (DUST)
Cause – Since the location of the project is close to the Ecuador, sun is strong and makes the
land to be dry. Wind can spread dust in the early stages (excavation and soil movement,
replacement, etc.).
Effect – Dust can affect the families and overall community that live close by, making people
uncomfortable, affecting local businesses and the environment.
18. Quality of Construction Materials
Cause – There is a market of materials of low quality that often lie about strength of materials
or other properties.
Effect – The quality of the material defines the overall quality of the project as well. So if the
quality does not match with the design, financial loss and delays can happen.
19. Leadership
Cause – Lack of a proper management skills (PM) during design and construction
Effect – Delays, a faulty schedule, cost increase and lack of coordination can be the result of a
bad project management.
20. Material Shortage
Cause – Lack of material in the market.
Effect – A shortage in materials can stop the project completely or delay some phases of it. That
can produce losses, increase the cost of the project and overrule the project schedule.
21. Natural disaster
Cause - Some natural disaster such as flood and earthquake. Effect - They may destroy the
construction and equipment. In addition, it may cause huge finical loss and make workers
injured.
22. Traffic accident
Cause - When transfer some supplies or equipment, some traffic accidents may happen.
Effect - Financial loss, loss of life and personal injury.

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23. Cost increase
Cause - rising price, economic crisis.
Effect - budget increase, lack of enough money.
24. Policies change
Cause - Industry laws and regulation revise.
Effect - Influence the design and actions, may cause schedule delay.
25. Lack of workers
Cause - Working prospect and salary are lack of attraction, during festivals and holidays.
Effect - Schedule delay.
26. Personal safety
Cause - Incorrect operation process, poor equipment, poor security.
Effect - Financial loss, loss of life and personal injury, compensation, schedule delay, bad
reputation.
27. Equipment malfunctions
Cause - Being used for long time, lack of maintenance, operate incorrectly.
Effect - Schedule delay, financial loss, personal injury.
28. Currency and exchange rate
Cause - Economic crisis.
Effect - Budget is not enough.
29. Inexperience
Cause - Green hands.
Effect - Schedule delay, unnecessary financial loss.
30. Fire
Cause - Smoking, equipment overheats.
Effect - Schedule delay, financial loss, personal injury, bad reputation.

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Part 3: Risk Categories and Organization
Project Termik
Figure 3. Project Termik Summary
Risk Categories and Preliminary Analysis
There are many ways in which we can categorize risk. Different disciplines use terms like
hazards or risk exposures. Categorization can be done by analyzing the causes of a risk or its
nature of consequence and in some cases of both.
The losses can be ultimately measured in economic terms that can affect a determined project.
In most situation before measuring the risk in terms of loss, we can categorize them in five
broad categories of risks: health, safety, security, financial and environmental. There are often
interrelations between those categories, but its prime nature should be reflected in only one.
For example, a health risk may later lead to financial loss but that doesn't mean it should be
considered as financial risk.

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For this project, we have developed our own categories for risk. To organize them better we
have divided risks considering their nature and causes, in the following categories: project
management, supply, legal, environment, construction & design, safety and financial (Figure 4).
Most of the risks of Project Termik are in the project management category and it makes sense
because that discipline will rule in the success of the project, being present in all the project
lifecycle, we could see that in table 2.
Figure 4. Risk Categories of Project Termik

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# Risk
RISK CATEGORIES
C&D Safety PM Enviro. Legal Supply Financial
1 Contamination of soil x
2 Rock bed found after certain depth x
3 Delay in water and electricity supply x
4 Delay in Supply of Materials x
5 Fail of Formwork during casting of concrete x
6 Mismatch of steel structure during erection x
7 Slips, Trips and Falls x
8 Misconception of Design x
9 Bad weather x
10 Dispute Between Labor Union and management x
11 Political Instability x
12 Accessibility x
13 Community protests x
14 Permits x
15 Insecurity x
16 Corruption x x
17 Environment (DUST) x
18 Quality of Construction Materials x
19 Leadership x
20 Material Shortage x
21 Natural disaster x
22 Traffic accidents x
23 Cost increase x
24 Policy Change x
25 Lack of workers x
26 Personnel Safety x
27 Equipment Malfunction x
28 Currency and Exchange Rate x
29 Inexperience x
30 Fire Hazards x
Table 2. Risk Categorization of Project Termik
After separating the risk in categories, we also grade them according to their likelihood and
impact in the project in a qualitative and quantitative way.

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Table 3. Risk Categories & Qualitative and Quantitative Analysis
Once we established the categories and know the potential likelihood/impact of each risk, we
proceed to put this information into Primavera for further analysis, like we see in table 4 and 5.
Table 4. Probability scale, Impact and scale types, PID from Primavera

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Table 5. Risk influence in the project
As a result of the primavera analysis, we can see that some risks are not so influential in our
project, like traffic accidents or dust formations during the project (table 4). Many other risks in
the yellow area could influence the project in a medium way and most of the risks have a great
influence in the project. This could be explained by the fact that most of the project activities
are extensive and expensive, so any alteration in cost or schedule will have a high or very high
influence in the project.
Influence Diagrams
For further analysis, we have created influence diagrams so we can see each risk in all seven
categories and their area of influence. The objective of creating these influence diagrams is to
give the viewer a clear idea of the risks inside a category and the area of influence this risk may
have. We achieve that through a dynamic graphic that proposes inputs and outputs.
The influence diagram can help us see how a group of risks will affect more or less areas than
other groups. In the red circles we have the inputs (risks) then in green we have the area of
focus in which those risks will take place, and finally in a blue diamond the possible outcomes

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that the risks may cause or the variables of the project that can be impacted. So, for this part
we will have 7 influence diagrams since we have categorized our risk into 7 categories.
For example, legal risks in influence diagram 5 have influence in only one area as an output, the
schedule. Other categories like in influence diagram 7 were we can see safety risks, can result
affecting several areas like quality of construction, cost and schedule and project success.
Other factors could also intervene in determining which risk would we rather have in our
project than only the areas of influence. Priorities of each project are different and can alter the
way we interpret the results and view risks.
Construction and Design Risks:
Influence Diagram 1. Construction and Design Influence Diagram

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Environmental Risks:
Influence Diagram 2. Environmental Risk Influence Diagram
Financial Risks:
Influence Diagram 3. Financial Risks Influence Diagram

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Supply Risks:
Influence Diagram 4. Supply Risks Influence Diagram
Legal Risks:
Influence Diagram 5. Legal Risks Influence Diagram

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Project Management Risks:
Influence Diagram 6. PM Risks Influence Diagram
Safety Risks:
Influence Diagram 7. Safety Risks Influence Diagram

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Part 4. Qualitative and Quantitative Analysis
So far, we have we have found 30 possible risks that could affect our project. We categorized
those risks into seven categories: Supply, Financial, Construction & Design Risks, Environmental
Project Management, Legal and Safety. We performed already a qualitative analysis by putting
the likelihood and the impacts of each risk (Tables 4,5). Then we analyzed the influence of each
risk in the project.
For part 4, the qualitative analysis will include a link between each risk to the activities that it
influences in the primavera schedule (figure 5). This will help us to relate each risk with the
possible activities it may affect. So, results of the qualitative analysis could change and also, we
can get out a quantitative analysis as well.
Example:
Figure 5. Link between a risk and the affected activities
The probability of each risk will be taken from the qualitative analysis that we entered in
primavera (figure 5). We will run the risk analysis with a complete schedule for the project,
entering parameters of cost and duration for each activity (figure 6). The schedule this time will
have to include every single activity in the project, its duration and follow a sequence (figure 7).
Example:
Figure 6. Parameters of cost and duration for each activity on the schedule

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Figure 7. Schedule with activities, cost, duration, sequence and start/finish dates
It's important to say that after completing the sequence of every activity of the project in
Primavera, the schedule of the project changed to 18 months approximately, more than
speculated at the beginning (14-16 months).
After running the risk analysis with the new linked activities/risk we can obtain results that will
tell us how the risks will affect the project. We will do the analysis by comparing results of the
duration, cost and finish date that the analysis will give us. One set of results will include the
risks linked to the activities and the other will not (Figure 8).
Figure 8. Objective of the quantitative risk analysis
First, having performed a qualitative analysis that can be seen in table 4 and 5, we get a
probability scale, Impact and scale types and the risk influence in the project. That probability

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scale shown also in table 6, tells us the ID for each risk, the description a score based on the
inputs we put before, those are likelihood and impact. The probability of each risk now will be
used in the qualitative analysis once que link the risks to each activity.
Table 6. Qualitative analysis with probability of occurrence of risks
In table 7 we can see the same risks we introduced in primavera before, but now we have
linked each risk to every activity or task in the schedule that will be influenced by it. The
probability of occurrence is also there and we have chosen a pre-mitigated phase, since we
have not yet taken actions over the risks.

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Table 7. Quantitative analysis with probability of risks/activities
After we do this, the next step in Primavera is to run the risk analysis again, and see how this
new results (pre-mitigated) vary from the ones we got before the risks were a variable. In
figures 9 and 10 we can see results for duration of the project with and without risk. According
to the statistics, the mean or expected value of duration for the project is 643 days. The range
in which the project could finish goes from 564 and 698 days, leaving a window of 134 days.
When we input the risks, the mean is 673 days, 30 days or a month more than the results we
got before.

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Figure 9. Distribution Graph of Duration (Without Risk)
Figure 10. Distribution Graph of Duration (With Risk)
The range goes from 590 to 769 days, so the window has increased with risks from 134 to 179
days. We can say confidently by watching this results, that there is more uncertainty in the

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duration now that we put the risks in the mix. Figures 11 and 12 are the results for finish date,
they vary in the same proportion of duration since they are directly related, an increased
duration will change the finish date. The mean will vary a month from 26/07/18 to 26/08/18.
Figure 11. Distribution Graph of Finish Date (Without Risk)
Figure 12. Distribution Graph of Finish Date (With Risk)

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If we see the analysis graph in figure 13 and we choose 90% of probability of results, we get
that end date with risks will be most likely 28/09/18 and without risks 31/08/18, a month apart.
That will gave the project a duration of almost two years with risk.
Figure 13. Distribution Analysis of Finish Date
As for the cost, we can see in figures 14 and 16 the results for the plan cost without and with
risks respectively. The mean cost without risk is USD 5,900,260.00 and with risk USD
8,425,570.00. The variation between both is of USD 2,525,310.00, almost 43% more than the
initial budget without risk input. Range from figure 14 is from minimum amount to maximum
goes from USD 5,365,198.00 to USD 6,254,651.00, having a window of almost a million dollars.
In figure 15 we can see that the range goes from USD 6,441,676.00 to USD 11,564,521.00,
having a huge window of 5,092,345.00.
In this variable, cost, we can see how influential risk could be if no actions are taken to reduce
it, prevent it, control it or mitigate it. Like we see in the analysis in table 16 the difference of
cost with and without risks is much more defined than in the other variables.

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Figure 14. Distribution Graph of Cost (Without Risk)
Figure 15. Distribution Graph of Cost (With Risk)

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Figure 16. Distribution Analysis Graph of Cost
If we see the analysis graph in figure 16 and we choose 90% of probability of results, we get
that end cost with risks will be most likely USD 9,601,560.00 and without risks USD
6,074,766.00, almost 3 million dollars apart.
The costs that are most influential to the project now that the risks have been inserted in
Primavera are shown in figure 17, with a percental value.
Figure 17. Tornado Cost Sensitivity

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A summary of all the results can be seen in figure 18, for calculations of before and after risk
has been added to the risk analysis calculations in Primavera.
Figure 18. Distribution Analysis Graph of Cost before and after risk
The numbers and variations of finish dates, durations and mostly cost, only confirm that risks
cannot be taken lightly because they have a major influence in the project. If the risks are not
monitored and controlled or mitigated; they could not only delay the finish date, but increase
the cost in a dramatic way. The project has to consider risks in overall planning or further down
the road the worst-case scenario could be catastrophic. The objective now is to elaborate a
mitigation strategy for each risk to prevent these developments to take place.

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Part 5. Risk monitoring, Controlling and Reporting
So far, we have identified risks for project Termik, we have assessed those risks and ranked
them in a qualitative and quantitative way. Like we mentioned after the quantitative analysis,
the project has to consider risks in overall planning or further down the road the worst-case
scenario could be catastrophic. In this part, we will talk about monitoring those risks and
managing them with mitigation, control and reporting strategies (figure 19). Also, we will
identify stakeholders involved in the process.
We will propose these strategies to manage 9 of the 30 risks we identified before, these nine
risks are:
1. Traffic accident
2. Cost increase
3. Policy changes
4. Accessibility
5. Leadership
9. Delay in water and electricity supply Figure 19. Risk Mgmt. Process
For these nine risks, we will be explaining the way we can monitor them, control them and how
this risks should be communicated and reported. The objective is to elaborate a mitigation
strategy to prevent these developments to take place. The mitigation and controlling strategies
should cost less or have benefits that represent more than the possible impact of that risk. Also,
after these control and mitigation strategies will be implemented, they will diminish project
vulnerabilities.

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1. Traffic accident
In our project, during the transportation of some materials, accidents may happen. Accidents
can be caused by many kinds of reasons, such as bad traffic condition, bad weather and
irresponsible driving. Once an accident has happened, it will increase our cost and it will be a
cause of delay. Therefore, we should do the preparation and mitigation.
Risk Monitoring
a. Surrounding traffic condition: On some special type of highway such as curve highway
sections, traffic accidents are easier to happen. Drivers should pay attention to these
accident black spots.
b. Driver management: Fatigue driving, drunk driving, new drivers are the possible reasons
leading to traffic accidents. Therefore, we should improve the management of drivers.
c. Bad weather: Traffic accidents are easier to happen with bad weather. So, we should
decrease the transportation in bad weather.
d. Breaking traffic regulations: Breaking traffic regulations such as overloading may lead to
traffic accidents. Therefore, we should strengthen the management of drivers.
Risk Controlling / Mitigation
a. Hire experienced drivers.
b. Strengthen management of drivers, improve the safety consciousness of drivers.
c. Pay attention to traffic and weather condition. Try to avoid transportation in bad
weather.
d. Provide accidents insurance.
Risk reporting / Communication
a. Provide road and traffic condition to drivers.
b. Provide weather condition to drivers.
c. Safety training.
d. Accidents insurance.

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Stakeholders
a. Driver
b. Insurance Company
c. Project Administration
d. Project manager
2. Cost increase
Because of the changing financial condition, cost may be increasing. Wrong decision making,
changing of the relationship between supply and demand, economic crisis can also lead to cost
increasing. It will influence the project investment and even cause the schedule delay.
Therefore, we should pay attention to the marketing situation and do the adjustment of project
cost in time.
Risk monitoring
a. Schedule delay: Schedule delay may cause the cost increasing. So, management of
schedule is important.
b. Supply and demand in market: Changes of the relationship between supply and demand
in market may influence the price of materials in the project. Purchasing materials in
time or in advance can lower this risk.
c. Financial crisis: The risk of financial crisis is very low.
d. Decision making: Before purchasing materials and concluding a contract, decision maker
should do the research and comparison.
a. Pay attention to international and domestic finance situation.
b. Purchasing materials in advance, with a contract that establishes cost.
c. Management of schedule. Complete the schedule on time.

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Risk Reporting / Communication
a. Do the marketing research before making decisions.
b. Provide report of increasing cost if schedule was delay.
Stakeholders
a. Supply manager
b. Project manager
c. Customer
3. Policy change
Policy change is not easy to happen, but once it does, it will have big impacts on the process of
the project. We should do the preview and prepare alternatives.
Risk Monitoring
a. Industry laws and regulation revise: Some industry laws and regulation revising may
influence the completion of the project. Therefore, we should pay attention to the
regulation situation and do the preparation.
a. Pay attention the policy and possible changes.
b. Preview of policy changing.
c. Prepare alternatives in advance to face the policy change.
d. Adjust the project in time according to the new policy.
a. Provide report of domestic policy and possible changing during project.
b. Provide emergency plan.
c. Provide the report of loss leading by policy changing.

34
Stakeholders
a. Construction manager
b. Project manager
4. Accessibility
After evaluating possible vulnerabilities of Project Termik, Accessibility showed possible results
for risk. Due to a high volume of vehicles that park and wait for revision in a center that it's next
to project Termik, congestion and delays may be created, making accessibility difficult for
vehicles to the project's location. Also, it's worth to mention that the street which provides
access to project Termik is a two-way street, so transit of bigger vehicles like trucks may be
more difficult than expected. For this reason, constant monitoring of the accessibility situation
must be provided, so that vehicles that wait for the revision next to the project may be
relocated or leave a certain amount of distance to make easier the circulation of vehicles,
especially during construction. Controlling this risk can also avoid complaints that could, in a
worst-case scenario, stop the activities of construction.
Risk Monitoring
a. Provide personnel to monitor parked vehicles outside and manage them in an organized
matter. These personnel may also help pedestrians to circulate safely and provide any
assistance or information necessary.
b. Talk to possible stakeholders and open a channel of communication to keep everybody
informed about any situation (Neighbors, residents, police, traffic management
authorities, project management).
c. Provide a journal so that activities are monitored by personnel at the entrance, to check
all vehicles in and out the premises with information about their activity. Also, they can
monitor delays, schedules, etc.
a. The entrance to project Termik must have correct signalization. No parking signals, red
cones if necessary or any signalization preventing for delays to happen. These signals

35
will also sum organization and safety to personnel and people in the surrounding area.
b. Getting to certain agreements with stakeholders will be another way to control
unnecessary complaints, traffic jams and delays at the access point. For example: a
schedule of incoming and going vehicles can be created.
c. Journals kept by personnel in the entrance will be a good tool to control the existence of
delays or problems with accessibility. This reports will be analyzed by the administration
of the project, so any decision can be taken.
d. A fine or penalty system may be created with material providers and contractor so they
follow a certain schedule. This will maintain the order of coming and going vehicles
towards the project's location.
e. Constant reunions and communication with stakeholders involved in the topic may be
necessary. Creating an agreement to organize traffic flow in the street of access is a
priority.
a. Journals and reports of the access activity must be kept by personnel in charge.
b. Schedule noncompliance by any contractor or material provider must be properly
documented and notify to management of the project. This way the administration can
inform each company about fines.
Stakeholders
a. Personnel in charge
b. Project Management
c. Neighbors
d. Transit Authorities
e. Residents

36
5. Leadership
A risk in leadership is a tricky business. It’s hard to point the exact flaws in leadership and in
many cases, it's easy to identify by performance. Even though it's not a concrete science, there
are ways to manage the risk leaving uncertainty aside. A thorough hiring process for the right
candidates is often the way to go.
Risk Monitoring
a. The project Manager will oversee monitoring and assessing the leadership and decision
making skills of his/her team.
b. A proper report of complaints from personnel towards a member of the projects
administration, management or towards any problem within the project shall be kept.
This will help monitor areas that need more control and identify the person that is in
charge of that area.
c. Change orders with justifications must be provided. Monitoring compliance of the
construction rules and procedures must be done.
d. Weekly meetings between all management staff to monitor compliance with schedule,
cost and performance, will help to identify areas in trouble with possible lack of
leadership.
e. Weekly meetings with management and stakeholders for feedback, organizing work and
taking decisions.
a. Evaluate performance of each member of the management team and communicate to
them the areas that need improvement. All monitoring techniques will help in
developing an evaluation on performance.
b. Create daily journals so that any member of management can write important events of
the day, possible change orders with justification, weather situation, or any decision
taken during that day.
c. Create a good channel of communication or a system in which all members of the
management team can be informed of current information.

37
d. Prepare the personnel for different work scenarios with trainings and courses that
encourage a best practice of leadership
e. Hire personnel with experience and knowledge in the area, that have skills desired in a
good leader (always thru a HR office or external HR party).
Risk Reports / Communication
a. All the reports of complaints towards management personnel or in certain areas of work
shall be provided weekly.
b. A summary of every meeting should be prepared weekly so that record of any decision
or action can be evaluated.
c. The PM will oversee communicating with his/her personnel weekly to report any risk in
management.
d. Documentation of any change order shall be provided with a responsible signature.
Stakeholders
a. Project Management
b. Project Administration
c. Human Resources
d. Customer
Quality of materials determine the quality of the end product. In this case, we want to make
sure that every material used to build Project Termik complies with specifications provided in
the design. It’s best to hire a third party that has expertise in the area, and share the
responsibility with them. This action will also facilitate the work of project management,
because they will have one less thing to worry about. Nonetheless, they will still be involved in
important decision making.
Risk Monitoring
a. Before hiring any material supplier, the evaluation of credential and compliance with

38
regulations must be in order.
b. Product quality reassured by an international regulator or certified laboratory. It
depends on the quality that the customer wants.
c. Regular reports of the material entering the project with documentation.
d. For some materials, the need to hire a laboratory to test materials will be needed. For
example, for concrete, a cylinder testing must be done to monitor the quality of the
materials. Also, record of the origin of other materials used (water, sand, rocks,
additives, etc.).
e. Supervision that shall provide a quality check (Quality Management)
a. Compare quality between at least three providers of the material, and choose one with
desired quality that has more benefits over cost. It will help if the provider was also
close to the site.
b. Contracts with suppliers that have specifications of desired quality of materials must be
established before the construction.
c. Contract with a third party that can guide in assuring to keep the quality of materials on
site (adequate storage) and that can perform a quality check of the materials is
necessary.
d. Follow manufacturer's suggested procedures on handling materials. Or follow standards
of construction for different activities. For example, in Ecuador there is a Norm for
Construction (NEC).
e. Buy only materials that comply with specifications from the design.
f. Any additional test result obtain from material testing should be approved or rejected
with justification by supervision and project management.
a. Quality management should have a daily journal with activities and documentation
related to quality of materials that arrive to the site and also for materials stored.
b. Proper channel of communication and reporting should be implied between project

39
management and the quality management or supervision.
c. Test results obtain from material testing with approval should be available for all
management personnel to read. Risks can be reported in them.
Stakeholders
a. Suppliers
b. Supply manager
c. Project management
d. Transportation company
e. Supervision Personnel and/or Quality manager
Soil is the most important for designing foundation and it needs to well compacted. Excavation
is the first most important step in the construction. If the soil is contaminated then we have to
perform test, hire 3rd party environmental agency to make remove the top soil till we get the
natural compact soil and we have to take other measures to provide solid base to the structure.
Risk Monitoring
a. Potential Areas of Soil Contamination: Usually contamination of soil takes place at the
potential areas like Industrial sites, Near Oil Refineries, Petrol Station, and where there
is Spill of chemicals.
b. Percentage of the chemicals in the soil: If there is any industry situated nearby the site
then there is a high probability the soil can contain high number of chemicals.
c. Site survey: Site survey should be done at certain period because it will help to
understand the structure of the soil and if there are any Large cracks formation found at
the site, it may result into soil contamination. Data Analysis methods could be used by
Hierarchical cluster analysis (HCA) and principal components analysis (PCA), and can
interpret the Quality of the soil.
d. Settlement of soil: We can track the rate of settlement of the soil which could happen if
the soil is loose. Settlement might be the result of soil contamination

40
e. Soil strength/ soil bearing capacity: Examination of soil strength would help us to
understand the soil compaction and soil bearing capacity and it will also help to design
the foundation as well.
a. Soil testing should be done prior to the excavation.
b. Hire 3rd party environmental agency for site remediation as it regulates the procedures.
c. If soil is too loose then provide change order in the design for the use of piles and
foundation.
d. We can rent machineries and increase the number of labors to remove the
contaminated soil within time period.
e. Rent pumps to remove water from the excavation area if the water table is high at the
construction site.
f. At the same time we can order the supply of material of the backfill to make the base
more compacted for the foundation
a. We have to Make proper soil testing reports well before designing of the foundation.
b. Site Survey and reports should be done properly
c. Sufficient supply of materials and machineries should be provided to the construction
site.
Stakeholders
a. Project Manager
b. 3rd Party Environmental Agency
c. Site Surveyors
d. Site Engineer
e. Soil Testing Laboratories

41
Rock beds are usually good for the foundation, and it’s usually found in the hilly areas.
However, it’s very hard to excavate and time consuming. Rock bed can be found by performing
geotechnical survey. If there is any error or if the rock bed is not even, then we have to perform
excavation work with heavy machineries which will consume time and require money.
Risk Monitoring
a. Geotechnical tracking or electromagnetic / Ultrasonic testing of the site.
b. To monitor this risk, we can perform the geotechnical report and Electromagnetic
testing/ ultrasonic testing of the site for the rock structures. If there is any, we can find
out the depth of the rock and the locations of the rock bed at the construction site.
a. Geotechnical report should be taken well in advance; accordingly, we can ask for more
labor and rock cutting machinery.
b. If there is any error in geotechnical report and we find any unexpected rock bed then, to
Control this risk we can rent rock cutting machineries and can increase the number of
laborers, which will accelerate the excavation at the site and would help the get work
done within the scheduled period. Also it may affect the design of the building, so If it is
required, we can ask for change order with in the design as soon as we find the rock
bed.
Reports / Communication
a. Geotechnical report should be done properly and Details should be given properly to
the Project manager.
b. Reports should be provided to the designers and change orders should be given with the
updated report of the site.
Stakeholders
a. Geotechnical Surveyors
b. Geotechnical Engineers

42
c. Equipment operator
d. Project Manager
e. Designers
Water and electricity is the most important and is required right from the beginning of the
construction. We require water for curing, preparing concrete etc and Electricity to operate
heavy electric machineries. If we don’t get supply within time then we have to arrange from
external sources like private companies.
Risk Monitoring
a. We must keep the track of permission of supply of water and electricity.
b. Make proper coordination and communication regularly with the supplier. And we have
to Make sure the supply to be provided to construction site take place well before
construction work starts, for ex. 2-3 weeks before
c. Make Proper check of the pipelines, if there is any problem there could be delay in work
a. We can ask for electricity from private company or use commercial generators and
invertors, if there is any delay in electricity supply. Order for filled tankers prior to the
construction work. Also Project Manager has arranged for Water storage by preparing
reservoir well in advance near construction site. Make proper contact the supplier or
the govt if they are supplying the water and electricity.
Reports / Communication
a. Make sure the supply to be take place well before construction work, for ex. 2-3 weeks
before.
b. Make proper contact the supplier or the govt if they are supplying the water and
electricity.

43
Stakeholders
a. Government Agencies
b. Private Suppliers
c. Project Managers
d. Contractors
e. Machinery suppliers
Recommendations:
A deeper analysis should be done for all the risks found in Project Termik. Controlling
techniques that can be implemented from the beginning of the project could save money and
prevent delays. Constant monitoring of the project will allow to find deviations from cost,
schedule, risks and quality, allowing management the chance to control and mitigate them in
an early base. Report and communication techniques are very important to help project
management to be informed about any relevant situation in the project that requires to
manage risk with established procedures or by new decisions. Project management will be in
charge of dealing with stakeholders to lower risks and keep the expected performance in
schedule, cost, quality and risk management.
All the information of the risk analysis and procedures needed to handle risks should be written
down in a Risk Management Plan, that will contain information on procedures, assumptions,
examples of reports and techniques used throughout project development, and every
document, guide or procedure related to monitoring, controlling, mitigating, reporting and
communicating risk.

Prakhar gupta risk analysis report

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