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1. negative effect on at least one project objective, such as time,
cost, scope, or quality.
Risk, in its most general form, is an estimate of a potential of an
undesirable outcome due to an event.
Risk = Probability of event X Magnitude of loss/gain
In Infrastructure it can be defined as:
The relationship between a particular hazard (or threat) that
might degrade the performance of the infrastructure under
consideration and the associated consequences
Uncertainty: can be deemed as the chance occurrence of some
event where the probability distribution genuinely is unknown,
meaning that uncertainty relates to the incidence of an event
about which little is known except the fact that it might occur.
Thus, the occurrence of uncertainty is therefore present when an
action leads to more than one possible outcome but the
probability of each outcome is unknown.
A negative risk is defined as a threat while a positive risk is
defined as an opportunity. Therefore, something that is properly
defined as risky does not necessarily mean that it is a bad thing,
only that it is an uncertain thing.

2. common characteristics:
Factors found in all projects which make them inherently risky
include:
 Uniqueness.
 Complexity.
 Assumptions and constraints.
 People.
 Stakeholders.
 Change.

3. Social / inappropriate for social habit of society
Technical / Poor communication with stakeholders
Legal / codes, regulations, and contractual matters
Environment/ Rain-induced mudslides damage
Types of Risks in infrastructure projects:
• Acts of God (flood , fire, wind damage, …)
• Physical (Damage to Structure , Theft , Labor Injuries…)

4. • Operation and Maintenance Risk (Technological Risk) (Low
operating productivity , Maintenance cost higher than
expected , Operation cost overrun….)
• Socio-Economic Risks (Unwillingness to Pay , Community
Protests )
Risk Management:
is one of the nine Project Management Knowledge Areas
identified in A Guide to the Project Management Body of
Knowledge (PMBOK) That is:
Risk Management includes the processes concerned with
conducting risk management planning, identification, analysis,
responses, and monitoring and control on a project. The
objectives of project risk management are to increase the
probability and impact of positive events and decrease the
probability and impact of negative events in the project.
Risk Management Objectives:

5.  Project risk includes all those risks that might impact on
the cost, schedule or quality of the project.
 Operations and processing risks include all those risks
that might impact on the design, procurement,
construction, commissioning, operations and maintenance
activities, including major hazards and catastrophic events.
Primary steps in Risk Management:

6. Delphi technique;
Root cause analysis (RCA)
 Diagramming techniques (Fishbone OR (cause and
effect) diagram);
SWOT Analysis
• interviews and focus group discussions;
• scenario analyses;
• surveys and questionnaires; and
• Work Breakdown Structure analysis.
SWOT analysis:

7. • Determine appropriate ways to eliminate the hazard, or
control the risk when the hazard cannot be eliminated (risk
control)
Risk assessment
Periodic, scheduled reviews of identified risks, risk responses, and
risk priorities should occur during the project. The idea here is to
monitor risks and their status and determine whether their
consequences still have the same impact on the project objectives
as when they were originally planned. Every status meeting
should have a time set aside to discuss and review risks and
response plans.
Risk identification and monitoring is an ongoing process
throughout the life of the project. Risks can change, and
previously identified risks might have greater impacts than
originally thought as more facts are discovered. Reassessment of
risks should be a regular activity performed by everyone involved
on the project.
Qualitative analysis is based on nominal or descriptive scales for
describing the likelihoods and consequences of risks. This is
particularly useful for an initial review or screening or when a

8. Risky Project includes a comprehensive risk planning and control
capability that includes mitigation and response plans. Mitigation
plans are composed of a few different features: the Mitigation
and Response View, the Mitigation Waterfall Diagram, History and
a Cost of Risk analysis. To create a mitigation plan, you first need
to add it to the Mitigation and Response Plan view. A mitigation
plan includes a unique name, cost, planned reductions in
probability and impact.
Risk Evaluation
Risk evaluation is about deciding whether risks are tolerable or
not to the project,
The evaluation step compares risk priorities from the initial
analysis against all the other risks and the organization’s known
priorities and requirements. Any risks that have been accorded
too high or too low a rating are adjusted, with a record of the
adjustment being retained for tracking purposes. The outcome is
a list of risks with agreed priority ratings.
Once risks have been identified and assessed, all techniques to
manage the negative risk fall into these major categories:

9. Impact mitigation
Impact mitigation is directed to minimizing the consequences of
risks.
Impact reduction strategies include:
• contingency planning;
• engineering and structural barriers;
• separation or relocation of an activity and resources;
• quality assurance;
• contract terms and conditions;
• regular audits and checks to detect compliance or information

10. organization and its suppliers or sub-contractors. Contracts are
the primary means of allocating risk between the parties involved
in most projects. Many risk sharing strategies for projects or
procurements require decisions to be taken at very early stages,
usually in the pre-tender phases.
Risk Acceptance
Sometimes risks cannot be avoided or transferred, or the costs of
doing so would be high. In these circumstances, the organization
must retain the risks. In some instances, organizations may wish
to consciously retain significant risks, particularly where they have
the appropriate expertise to manage them.
Cost-Benefit Analysis of a Risk Response
In developing a risk response, always weigh the potential cost
impact of the un-responded risk against the cost of the risk
response strategy and the residual impact of the risk. Many risk
responses do not eliminate the risk, but rather lower the risk’s
probability and impact. The cost of developing the risk response,
its implementation, and the residual risk must be less than that of
the original risk. If this is not true, it is better to accept the risk
and carry contingency or develop an alternative, more cost

11. conditions or clauses. Many of these government agencies have
perceived that they can transfer risk and liability by placing major
responsibilities upon contractors through contract clauses.
These clauses are intended to shift the preponderance of risk to
contractors and associated insurers while minimizing the risk to
themselves, the owners. This practice may result in high bid prices
because contractors may add risk or uncertainty to the bid cost in
the form of contingencies.
Infrastructure construction projects are typically large, uncertain,
and complex in many aspects. Therefore, they are subject to more
risks related to economic, social, political, and environmental
conditions than other types of construction projects. Should these
risks materialize, they may have an impact on the cost, schedule,
or quality of projects (or a combination of these). Construction
risk can seldom, if ever, be eliminated. It can merely be
transferred from one party to another. In large-scale
infrastructure projects, risks and liabilities should be fairly shared
among project participants through contractual arrangements. In
order to prevent unexpected risks and thus disputes during
construction, international contracts should pay close attention to
local project characteristics and contract practices. Political

12. difficulty, and the basic notion of risk analysis is that it is useful to
at least make an attempt to identify these risky items and attach
some financial value to them. These amounts can then be added
to a project budget as items of possible expenditure.
Risks in Contracts:
Traditionally, risk in construction projects is allocated as follows:
• client to designer and contractor;
• contractor to subcontractor;
• client, designer, contractor, and subcontractor to insurer;
• contractor and subcontractor to sureties or guarantors.
Contractual risk transfer process

13. Analyzing risks in this way allows you to determine which risks
require the most aggressive management.
Probability is the likelihood that an event will occur
Determining risk probability can be difficult because it’s most
commonly accomplished using expert judgment. This means you
are guessing (or asking other experts to guess) at the probability a
risk event will occur.
Impact is the amount of pain (or the amount of gain) the risk
event poses to the project.
The risk impact scale can be a relative scale that assigns values
such as high-medium-low (or some combination of these) or a
numeric scale known as a cardinal scale.
Cardinal scale values are actual numeric values assigned to the
risk impact. Cardinal scales are expressed as values from 0.0 to 1.0
and can be stated in equal (linear) or unequal (nonlinear)
increments.
What is Risk Matrix
A risk matrix is a project management tool that allows a single
page – quick view of the probable risks evaluated in terms of the