The document discusses risk management in construction projects in Romania. It defines risk as events that could cause a project to fail its objectives. It emphasizes that proper risk management is important to control costs, delays, and quality issues. The document outlines qualitative and quantitative risk assessment methods and identifies common risks such as financial difficulties, incomplete designs, and late materials. Effective risk management can reduce costs and improve project success rates.

1. CONTRACTING IN ROMANIA NOWADAYS RISKS,
ADVANTAGES, CONSTRAINTS, CONTRACT
MANAGEMENT, CONSTRUCTION LAW AND
GUIDANCE BEST PRACTICE

2. Understanding the
Importance of Risk
Presented by James Wood
Claims Manager & Head of Quantity Surveying & Quantum
Techno Engineering & Associates
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

3. What is
Risk?
A potential event, either internal or external to a project, that, if it
occurs, may cause the project to fail to meet one or more of its
objectives.
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

4. The Financial
Implications
of Risk ?
Risks and uncertainties, involved in construction projects, cause
cost overrun, delay and lack of quality during the progression of
the projects.
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

5.  Concept many construction companies give too
little thought to
 Economic downturn = increased competition and
pressure
 Construction projects are unpredictable
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

6. Managing Risk
 Recognised as being very important process
 Try to eliminate the unexpected, by thinking about all
the things that might happen to deflect a project from
its objectives
 Achievement of project objectives:
 Time
 Cost
 Quality
 Safety
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

7.  The main aims of risk management are to:
• Identify potential risks
• Assess the probability and impact of each risk
• Identify alternative actions that may prevent the risk from happening
(avoidance), or if it does happen ameliorate the impact (reduction), or
provide a strategy for dealing with the accepted consequences
(acceptance)
• Implement and monitor those actions that are cost effective and
necessary to the successful delivery of the project objectives
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

8.  The proper management of risks requires that they
be identified and allocated in a well-defined
manner.
 This can only be achieved if contracting parties
comprehend their risk responsibilities, risk event
conditions, and risk handling capabilities.
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

9. Which method
technique to
choose?
How to measure
a risk?
How to identify
risk in construction
projects?
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

10. Qualitative
Assessment
 Identification of risk
 Evaluation process
 Assess the impact and
likelihood
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

11. Quantitative
Assessment
 Magnitude of consequences
 Monte Carlo Simulation
Modelling
 Quantifies probability of
occurrence
 Estimate frequency of risks
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

12. QUALITATIVE QUANTITATIVE
risk-level project-level
subjective evaluation of
probability and impact
probabilistic estimates of
time and cost
quick and easy to perform time consuming
no special software or tools
required
may require specialized tools
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

13. Ten potential delay
factors
 Contractors’ financial difficulties
 Client cash flow problems
 Engineer’s incomplete drawings
 Subcontractors’ slow mobilisation
 Late delivery of ordered materials
 Incomplete structural drawings
 Contractors’ planning and scheduling problems
 Price escalation
 Subcontractors’ financial difficulties
 Expropriation issues
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

14. Summary
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

15.  Effective risk management process encourages the
construction company to identify and quantify risks and
to consider risk containment and risk reduction policies.
 Construction companies that manage risk effectively and
efficiently enjoy
 financial savings, and
 greater productivity,
 improved success rates of new projects and better
decision making.
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

16.  Risk Management in the construction project
management context is a comprehensive and
systematic way of identifying, analysing and
responding to risks to achieve the project
objectives.
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com

17. Thank you for your time!
Workshop ASEMER – 29 November 2016
Understanding the Importance of Risk
www.technoeng.com