Chapter 5: Risk Management plan:

Emar Pakistan is one of the leading construction groups in Pakistan and is engaged in many

construction projects all around the country. Due to high number of projects, there are

many risks occurring during their construction projects. The project managers have faced

many problems at different stages of construction projects due to different types of risks.

This dissertation was focusing to assess different types of risks during construction projects

of developing countries. The company itself belongs to a developing country and focuses

more to analyse different kinds of risks and their proper assessment. This dissertation

provided details about different kinds of risks in literature review and adopted the

methodology to identify different kinds of risks and techniques for their countermeasure.

The main findings of analysis showed that construction projects of developing countries are

facing additional risks during their projects such as country inflation, tax increase, political

instability, war, outdated equipments, terrorism, incompetency of risk managers, change in

policies and lack of knowledge. Therefore, it is required to implement a error less risk

management system before starting the projects and maintain it throughout the

construction projects with certain actions in finding different risks.

There was brief discussion with the senior project managers of Emar Pakistan and it was

clearly noticed that they had a very weaker risk management system in their company. The

managers were not conducting risk assessments before planning for any construction

project. They were only considering the past experiences of their managers for dealing with

different kind of risks during the construction projects. Therefore, many of their projects

were delayed and were not able to fulfil all the requirements of their clients. Also, the

company was not able to manage their cost and waste during their construction projects.

Therefore, it was required to replace their formal risk management system by introducing

different kind of tools and techniques that can boost their performance by minimizing

different risks at all stages of construction projects. The risk management plan can be

implemented at all stages of construction projects, but provides better results if

implemented at the start of the construction project.

 

5.1 Risk Management Plan: 

The risk management plan for Emar Pakistan was designed after reviewing all the

information provided in literature review and techniques highlighted through questionnaire

results. This risk management plan was designed after considering all the requirements of

sponsor and follows all the standards that can be implemented in any construction

organisation. This risk management plan consists of 6 major steps that can be efficiently

used for identifying, analysing and removing different kind of risks during the construction

projects of Emar Pakistan. The given below figure 5.1 is showing the risk management plan

for Emar Pakistan with 6 different stages that can be implemented at all stages of

construction projects.

Figure 5.1: Risk Management Plan for Emar Pakistan

 

5.1.1 Step for identifying project objectives:

The project objectives plays a vital role for construction projects and it is the duty of senior

project managers to explain these project objectives to all the stakeholders well before the

start of construction projects. This can be done either by general body meetings or project

reports. Beside the explanation of construction project objectives, the senior managers

should also discuss all the project objectives with their defined team members through

brainstorming or other techniques. This discussion will remove errors and will provide

better project objectives from the experiences of team members. The project objectives

should also consider the budget, project plan and quality level of construction projects. The

meetings can be conducted to define certain tools and techniques that will be used during

the construction projects. There should be meetings with main focus on integrating

different risks during construction projects though proper project schedules, proper

financial planning, workers safety and proper management of quality during construction

projects.

5.1.2 Step for forming risk management team:

The senior managers should form a risk management team that includes employees from all

the departments of Construction Company. This risk management team should include

experienced professional with more experience in construction projects. This team should

include employees and project managers from all active departments such as design team,

finance, human resources, technical experts, engineers, quality control, legal advisors and

architects. The combination of experts from all departments will provide major

achievements for completing the objectives of construction projects. Although, there may

be some difficulties due to the diverse nature of risk management team, but initiating the

process of risk management at start of construction projects and monitoring it throughout

the construction project can provide better results.

5.1.3 Step for implementing risk management techniques:

The risk management teams should identify all kind of risks at their early stages and can

perform certain actions to minimize or remove these internal and external risks from

construction projects. The risk management team can use different tools and techniques

such as brainstorming, probability impact analysis, SWOT analysis, Decision tree, PRINCE 2

and many others for identifying risks from all the sources in construction projects. The

 

analysis of this dissertation highlighted brainstorming as best technique for identification of

risk management system and recommends Emar Pakistan to adopt this technique for

getting benefits from freely expressed ideas of their employees from all departments of

company. Beside different techniques, the risk management team should adopt certain

strategies in their companies that can help in minimizing different risks in construction

projects. Also, combination of different risk management techniques with different

strategies of construction companies can provide better results for dealing with risks from

all sources.

5.1.4 Step for analysing the probability of risks:

After successfully identifying different risks during construction projects, the risk

management team can analyse the probability and impact of different risks on project

objectives. The risk management team should maintain the histories of different risks and

based on these histories can defined certain priorities for different kind of risks in

construction projects. This can be done by using different techniques such as Monte Carlo

technique, Probability Impact grid analysis and decision tree analysis. This dissertation was

using probability grid analysis technique to check the probability of different risks.

Therefore, this technique is recommended to Emar Pakistan for maintain histories of certain

risks and defining certain priorities depending on the probability and impact of risks in

construction projects. The high priority should be given to risks with high probability and

severe impacts on construction projects. Although, these techniques requires special skills

and trainings that should be properly provided to risk management team.

5.1.5 Step for formulating risk response strategy:

The risk management team should select the risk response strategy after thoroughly

checking all the aspects involved with risks in construction projects. Although, these

strategies vary for different kind of risks and situation at which these risks occur during the

construction projects. But the risk management team should define such strategy that

should focus on both risk reduction and risk transfer. Also, they should collaborate

efficiently with all the stakeholders to minimize different kind of risks and for deploying

certain strategies in construction projects. The risk response strategy should consider the

establishment of efficient risk management system, provision of training for risk

 

management and proper documentation of risk histories depending on their probability and

impacts in construction projects.

5.1.6 Step for monitoring risks:

The success of risk management system is depending on the monitoring of different risks

throughout the life cycle of construction projects. The risk management team should focus

on monitoring these tools, in order to remove them at their early stages and alert certain

departments on any unlikely events during the construction projects. Beside monitoring

risks, the company should focus on providing sufficient training to their employees for

properly using risk management system and policies of risk management system. The

company should consider different modern and updated tools and techniques that can

improve the performance of their construction projects.