The risks and uncertainties involved in construction industry are far more than in any other industries. It is due to its vastness and the complexity of activities and processes. It is known but is always sidelined. Due to this the construction projects are failing to meet the time schedule, budget and quality of work. There is a requirement for a good risk assessment and management system in construction industry. The purpose of this paper is to critically analyse the journal titled ‘Risk Management in Construction Industry’ authored by Dr. Nadeem Ehsan, Mehmood Alam, Ebtisam Mirza and Azam Ishaque from Engineering Management department, Centre for Advanced Studies in Engineering, Islamabad, Pakistan.
Risk management …show more content…
Three factors; experience, judgement and intuition of team members, are the basis for risk analysis and management. So formal techniques and activities are rarely used. This is because of ignorance of the team members towards such techniques and the associated myths that these techniques are not suitable to be used in construction industry.
2. Even when risk management is to be used in the conceptual phase of project development and the team is familiar with the formal risk analysis and management techniques and processes, they are found be rarely employed in the conceptual phase of projects.
3. In case of international joint ventures in construction, a survey of contractors revealed that the most critical risk factors existed in the financial aspects of the JV, government policies, economic conditions and project relationships.
4. 28 risks related to construction projects in developing countries have been identified and amongst them 22 are categorised as critical.
5. Other risks such as differences of culture between the expatriates and locals and amongst the locals, exchange rates of currency and its fluctuations, high financing cost, political and social risks are part of an international construction …show more content…
Risk transfer is found to be widely used in the industry to deal with risks.
After reading the literature survey and the result of the survey conducted by the authors, we can find that regardless of countries and technologies available to people, risk analysis and management is not given the attention that it commands.
Since every construction project is unique, factors like experience, intuition and judgement seldom help in analyzing and managing risks.
Risks involved in international projects though cannot be eliminated, can be managed effectively to prevent its growth further. Hence utmost care should be taken during drafting of the contract documents in such cases.
Teams and individuals who are involved and are a part of the construction industry, must soon adopt the formal techniques of risk management and should promote the same. We have to help our own people in our fraternity to change their attitude towards risk analysis and management in order to minimize its adverse effects.
Risk transfer should not be used as a way to escape the risk assessment and management processes, but to effectively mitigate