DEFINITION

SUMMARY :

Risk involves chances or probability that an event,

specifically a danger, an injury, a loss or a hazard will occur

1
 RISK IN CONSTRUCTION WORKS

Development Risk
Employers Risks Construction Risk
Development Risk
Contractors Risks Construction Risk

2
 Employers Development Risks

Competition from other developers

Design not attractive to purchasers
Change in governments policy on development
Change in the law
Financial
Continued Finance
Economic fluctuation
Suitability of site and design
Availability of goods and materials

3
 Employers Construction Risks

Change in the law or governments policy

Economic fluctuations
Contractors delay
Poor quality of workmanship and materials/good
Availability of materials/good
Completeness of design (variations)
Contractors bankruptcy or insolvency
Termination of contract by contractor

4
 Contractors Development Risk
Competition from other contractors
Fixing tender price
Government s policy
Change in the law- new regulations
Economic fluctuations
Financial risk
Continued finance

5
 Contractors Construction Risk
Weather
Site conditions
Method of working
Accidents
Payment delay
Employers bankruptcy or insolvency
Termination of contract by employer

6
 TENDER AUDIT RISK ASSESS

Risk Management Procedure

Risks Identification
Risks Analysis
Cost Benefit analysis
Identification of the appropriate risks management method

7
 Employers Risks
Clause Description
JKR2007 PAM2006
5 2 SO s/A s Instructions
6 3 Sufficiency of contract Documents- Variation
35 6 Materials and workmanship
28 30 Overpayment
51 26 Contractor's bankruptcy or insolvency, other defaults
51 25 Abandonment by contractor
65 34,35 Disputes with contractor and others

8
 Contractors Risks
Clause Description
JKR PAM
6 3,6,14 Scope of contract- materials, workers
8 3 Sufficiency of contract documents
19 5 Setting out
11 9 Site condition
14,15,1 18,19,20 Safety of workers & insurances
617
23 24 Payment of wages
14,16 19,20 Contractors public liability
15 19,20 Safety of the works
28 30 Payment
65 34,35 Disputes with employers or others

9
 Shared Risks
Clause Description
JKR PAM
74 Nil Epidemics & medical attendance
30 Nil Fluctuation of price
65 34,35 Disputes

10
 Risk Management Procedure
Avoid the risk (redesign/ redefine/ abandon)
Ignore the risk (doing nothing about the risk)
Accept the risk 9take the risk and not transfer it)
Transfer the risk
Contractual terms
Subcontract out
Insurance

11