Alexandria Engineering Journal (2018) 57, 2667–2677

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Alexandria University

Alexandria Engineering Journal

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ORIGINAL ARTICLE

Risk management framework for Continuous Flight

Auger piles construction in Egypt
Hossam E. Hosny, Ahmed H. Ibrahim, Raymond F. Fraig *

Construction Engineering and Utilities Department, Faculty of Engineering, Zagazig University, Egypt

Received 14 June 2017; revised 30 September 2017; accepted 18 October 2017

Available online 15 November 2018

KEYWORDS Abstract Performing risk management in construction industry has a potential effect on project
Construction management; success. Achieving schedule, cost, quality and other objectives are highly dependent on applying
Construction equipment; an effective risk management approach. The main purpose of this study is to construct a specific
CFA piles; risk management framework for managing Continuous Flight Auger (CFA) piles construction in
Deep foundations; the Egyptian working conditions to uncover the potential risk categories facing this work package,
Equipment risks; identifying their causes, behavior of occurrence and effect on project objectives. The identified risks
Equipment management; are then prioritized to focus on the most effective elements to optimize risk responses. The study
Piles construction; went through planning proactive and/or reactive risk responses for high and moderate risks to
Risk management enhance positive risks (opportunities) and reduce negative risks (threats) so that the project can
smoothly achieve the needs for which it was undertaken. The structured framework will be inte-
grated later with the previously developed time and cost estimating modules to develop an Inte-
grated Management Model (IMM) for (CFA) piles construction to provide more accurate risk
data and consequently more reliable time and cost estimates. The framework was presented to a
sample of specialized performing organizations to be applied in their projects where the feedback
shows a cost and schedule reduction based on considering this framework as a guide to manage
risks in their (CFA) projects.
Ó 2018 Faculty of Engineering, Alexandria University. Production and hosting by Elsevier B.V. This is an
open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

1. Introduction risks [12]. Risk management, as a sector of project manage-

ment, includes the processes of conducting risk management
The main purpose of a construction project is to meet the own- planning, identification, analysis, response planning, and con-
er’s functional requirements based on the nature of the project trolling risks on a project [15]. The challenge of effective risk
while achieving schedule, budget and quality objectives [10]. management is to turn as many of unknown risks into known
Failure in achieving such objectives can be frequently attribu- risks through creative risk identification, assessment and con-
ted to the failure of contractors to deal with unanticipated trol. Generally, the objectives of project risk management are
to enhance positive events (opportunities), and decrease nega-
* Corresponding author.
tive events (threats) in the project [16]. The construction indus-
try has a bad reputation of time and cost overruns that happen
E-mail address: raymond.fraig@pua.edu.eg (R.F. Fraig).
due do inaccurate risk management [2].
Peer review under responsibility of Faculty of Engineering, Alexandria
University.
https://doi.org/10.1016/j.aej.2017.10.003
1110-0168 Ó 2018 Faculty of Engineering, Alexandria University. Production and hosting by Elsevier B.V.
This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
2668
Continuous Flight Auger (CFA) piling construction is a
complex construction work package that is exposed to a vari-
ety of risks and uncertainties. This situation might increase the
difficulty of obtaining accurate cost and time estimates due to
the absence of a systematic approach of risk management that
could predict, analyze, response and take control of specific
risks associated with such a piling job [17]. This approach, if
exists, may aid in achieving realistic and achievable estimates,
in addition to providing effective responses to typical risk con-
ditions that are used to happen with CFA in a frequent
manner.
2. Literature review
Project risk is an uncertain event or condition that, if it occurs,
has a positive or negative effect on one or more project objec-
tives such as scope, schedule, cost, and quality. A risk may
have one or more causes and, if it occurs, it may have one
or more impacts [25]. It is also defined as the exposure to loss
or gain, or the probability of occurrence of loss or gain. Events
are said to be certain if the probability of their occurrence is
100% or totally uncertain if the probability of occurrence is
0%. In between these extremes the uncertainty (risk) varies
quite widely [4]. Risk also was defined by [8] as the presence
of potential or actual constraints that could stand in the way
of project performance, causing partial or complete failure
either during construction or at time of use. Risks can be cat-
egorized as pure risk (the risk of injury, death or damage) and
business risk (the risk affecting cost or time objectives). The
project risk is a type of business risks that could be managed
using a systematic approach of standard processes to achieve
the project business objectives [16]. Project risks can also be
categorized into two main types; Positive risks (known as
opportunities) that may result in a cost saving and/or a sched-
ule lead to the project due to a desired effect; the other one is
negative risks (known as threats) that may result in a cost over-
run and/or a schedule delay to the project due to undesired
effect [25].
The causes of risks in construction industry were studied in
many researches in order to give means to stakeholders to
identify risks. Ehsan et al. [18] mentioned the factors affecting
risks in construction as; history, experience, management sta-
bility, team size, resources availability, time compression,
design complexity. They also categorized construction risks
into technical, logistical, management, environmental, finan-
cial and socio-political risks. Clough and Sears [1] classified
the types of risks in the construction contracts due to physical
works, delay, disputes, direction and supervision, damage,
injuries, external factors, payment and arbitration. Estate
Management Manual [6] developed a checklist of risk drivers
that includes; economical, governmental, social, environmen-
tal, and construction risks. Enhassi and Mayer [5] modified a
risk identification list for construction projects, the list main
categories were; force majeure (earthquake, flood, fire), physi-
cal (equipment damage, material damage, theft), financial
(inflation, exchange rates, customs, funds availability), politi-
cal and environmental (law, regulations, war, civil disorder,
permits, pollution, public consultation), design (incomplete
scope, design changes, inadequate specifications, defective
design) and site construction (productivity, defective work,
accidents). On studying more researches, it was found that
H.E. Hosny et al.
no more potential risk causes categories can be further
recognized.
Many research approaches dealt with the application of
risk management in construction projects. Orabi [9] studied
the risk in the Egyptian construction industry, main objectives
were to: (1) identify the most critical risks facing construction
projects in Egypt and their criticality from the perspective of
large scale contractors, (2) identify risk response methods
employed by contractors and their effectiveness, (3) compare
the nature of risks in Egypt to risks in other international mar-
kets based on literature review, and (4) develop a spread sheet
that summarizes the findings of this research to be introduced
as a tool to contractors for risk assessment in their projects. Ali
[12] developed a risk management process (RMP) methodol-
ogy that provides a logically consistent framework to manage
risks. The methodology was used to formulate a risk manage-
ment model incorporating infrastructure project costs for bud-
geting purposes, and applying it on real projects to improve
cost control. Eldosouky [22] focused on the management of
upside and downside risks through an approach for determina-
tion and monitoring of Cost Contingency Reserves (CCR)
with an interface with Earned Value Management, the
approach was applied to a real project, where post mitigation
simulations showed that the value of CCR is 2.88% of the pro-
ject cost considering the potential savings due to opportunities.
The project is monitored for eight months and the final results
were as follows: CCR was enough to cover current and resid-
ual threats.
The previous literature was beneficial in defining and
explaining project risks even threats or opportunities, also it
presented a variety of risk causes and categories that will help
to stimulate thinking organize thoughts and draw ideas to
properly identify general construction risks. Researchers pro-
vided many approaches to deal with risks in construction
industry which may act as benchmarks for the proposed
research. Some weaknesses found were that most of the
researches were generally oriented to construction industry
with no focus on a specific work package especially Continu-
ous Flight Auger (CFA) piling, most of them studied risk con-
ditions in other countries rather than Egypt with its unique
risk conditions and none of them performed risk management
in full accordance to the recognized Project Management Insti-
tute (PMI) practice standard in risk management. Accord-
ingly, the proposed research would consider all this findings
to benefit from literature strengths and overcome its
weaknesses.
3. Problem statement
Continuous Flight Auger (CFA) piles construction is a tradi-
tional part of construction industry in Egypt where many pro-
jects are not achieving their cost, time and quality objectives
sufficiently. The most obvious failure, based on expert judg-
ment and observations, is a severe schedule delay associated
with a cost overrun in most of CFA piles construction jobs
in Egypt and Middle East. One of the major reasons is the exis-
tence of common risks and uncertainties through all project
phases especially infrastructure and foundation works includ-
ing CFA piles construction. However, most construction man-
agers and planners are conducting risk management, if exists,
based on their intuition, judgment and experience rather than
Risk management framework for Continuous Flight Auger piles construction in Egypt
through a systematic risk management approach leading into
inaccurate time and cost estimates that are difficult to be
achieved causing short and long term problems, in addition
to a lack of planned risk responses triggering more risks and
so forth. Stakeholders working in CFA piles construction pro-
jects in Egypt are in need of an effective framework that may
guide them to manage risks facing their projects while keeping
schedule, cost and scope objectives for successful delivery.
4. Research objectives
The objective of this research is to develop a systematic and
actionable framework to enable CFA contractors to: (1) plan
risk management, (2) identify risks, (3) perform quantitative
and qualitative risk analysis, (4) plan risk responses and (5)
control risks facing the construction of CFA piles in the
Egyptian working conditions. The proposed framework
would help to accurately anticipate risk events and analyzing
their characteristics to select appropriate proactive responses
with accurate time and cost contingency reserves, then typi-
cally the project schedule and budget that could be smoothly
achieved.
5. Research methodology
The proposed research aims to draw as much as possible
expert judgment to identify specific risks affecting CFA con-
struction using interviews and pre-structured questionnaires,
performing qualitative and quantitative analysis for each iden-
tified risk, evaluating the potential responses and finally taking
control of positive and negative risks to minimize the project
risk exposure using the following procedure; (1) Developing
a prompt list of the most common risks facing CFA piles con-
struction in the Egyptian operating conditions using a brain-
storming guided questionnaire based on expert inputs
illustrating the causes, risk events, effects for each identified
risk, in addition to the probability, warning signs and the
potential responses suggested by experts, (2) developing a risk
breakdown structure to recognize risks by their causes, risk
events and potential effects, (3) prioritizing the identified risks
based on risk score calculations obtained by assessing and
multiplying the probability of occurrence and impact on time
and/or cost objectives, (4) studying the potential responses
offered by experts to risks and selecting the most suitable
response even as a preventive or corrective approach, (5) devel-
oping the final framework, (6) implementing the framework to
a sample of projects and measuring the risk exposure before
and after risk control to evaluate the effectiveness of the risk
management approach, (7) adjusting the approach if required.
6. Risk identification and data collection
The objective of risk identification is to develop a compre-
hensive list of risks facing the construction of Continuous
Flight Auger (CFA) piles. The main sources of input data
are: literature review and questionnaire surveys presented
to a sample of qualified experts even in geotechnical
engineering, piling and construction management. Risk
identification should be an early step to facilitate the analysis
and response planning of future risks [14]. The proposed
2669
comprehensive list should be used to facilitate the process
of risk identification based on previous experiences, knowl-
edge and lessons learned from similar completed projects.
The procedure of data collection can be summarized in the
following steps:
(1) Literature review; where several research papers, thesis
and references are reviewed to recognize as much risk factors
in construction industry as possible to develop a primary list
of risk factors that might affect CFA piles construction pro-
jects [7]. This primary list is to be presented through a ques-
tionnaire form to experts to comment, modify or add new
factors, (2) Interviews; with senior managers, project man-
agers, consultants and site engineers with experience in execut-
ing CFA piles in Egypt. The primary list is to be modified
based on the expert inputs obtained through individual and
panel consultations, (3) Delphi technique; the modified list of
risk factors is then presented back to experts to reach consen-
sus and to conduct minor adjustments if any, and accordingly,
(4) the final list of risks should be developed. The final list of
risk factors contains nine main risk categories. Each category
is subdivided into a number of risk factors that directly affect
CFA piles construction as follows:
1) External risks:
a. Major forces: such as earthquakes, flood, storms,
wars, and revolution.
b. Weather conditions: such as temperature increase/
decrease, humidity or rain.
2) Design risks: [16]
a. Improper or inadequate soil assessment.
b. Scope creep, shrinkage or vagueness.
c. Design requiring innovative construction methods,
equipment or materials.
d. Drawing, quantity or methodology changes.
e. Incomplete design or information.
f. Delay in designer’s response.
3) Management Risks: [20,24]
a. Poor communication between project stakeholders.
b. Improper organizational structure.
c. Poor qualification of staff.
d. Delay in inspection and testing.
e. Delay in approval of contractor’s submittals.
f. Ineffective decision making.
4) Construction risks: [20–22]
a. Lack of quality management (planning, assurance
and control)
b. Labor mistakes, rework and idle times.
c. Labor shortage.
d. Labor conflicts and disputes.
e. Safety issues.
f. Labor cost fluctuations
g. Surveying and site handling mistakes.
5) Sub-contractors risks: [23]
a. Lack of managerial skills.
b. Delay in delivering project requirements.
c. Low credibility.
d. Others.
2670
6) Equipment risks: [19]
a. Accidents with internal or external stakeholders.
b. Improper maintenance.
c. Delay in conducting service and spare parts delivery.
d. Logistics delay and/or failure.
e. Lack of operators’ competency.
f. Others.
7) Political and Governmental risks: [3,22]
a. Political instability: such as changes in government,
agitation for change or dispute between parties.
b. Corruption risks: such as officials demanding bribes
or grants.
c. Failure to obtain approvals or permits.
d. Import restrictions.
8) Economical Risks: [13]
a. Fund shortage: unavailability of cash flow by the
contractor.
b. Inflation risks: unanticipated price changes.
c. Taxation risks: such as rising tax rates or applying
new taxes or customs.
d. Economic crisis.
e. Foreign currency risks: unsteady exchange rates,
transfer restrictions and supply- demand equilibrium.
9) Owner generated risks: [20,11]
a. Failure to finance the project.
b. Unqualified owner representatives.
c. Delay and/or refusal of compensation to the
contractor.
d. Owner’s ultra-standards expectations and
requirements.
e. Delay or inability of the owner to provide full posses-
sion of site.
Based on the previously suggested risks, a final prompt list
of CFA risks was developed as an output of risk identification
process. This list will be used as a structured tool to facilitate
the further risk analysis processes.
7. Qualitative risk analysis
The qualitative risk analysis is the process of prioritizing risks
for further analysis or action by assessing and combining their
probability of occurrence and impact. It aims to rank and
Fig. 1 Risk Impact Calculation Standard (Source: [25]).
H.E. Hosny et al.
categorize the identified risks for further analysis or action
by computing their probability of occurrence (P) and Impact
(I) as shown in the example below. This can help the project
manager to focus on high priority risks that indeed warrant
a response. The analysis procedure should encompass the fol-
lowing steps; (1) assessing a subjective value of risk probability
(P) on a scale ranged from 0 to 1 (e.g. 0.1, 0.3. . .0.0.9), (2)
assessing a subjective value of risk impact (I) on a similar scale
based on the standard impact evaluation guide shown in
(Fig. 1) for cost and/or schedule impacts, (3) determining the
risk score (RS) by multiplying the probability (P) times the
highest impact (I), (4) prioritizing risks in a descending order
based on their risk score values and recognizing risk rating
(RR), (5) using the Probability and Impact matrix in (Fig. 2)
to classify risk categories (RC) into high (H), moderate (M)
or low (L) risks and (6) select high and moderate risks (risks
that warrant a response) to proceed for further analysis and
action. The key benefit of this process is that it enables project
managers to reduce the level of uncertainty and to focus on
high-priority risks as shown in example (1).
Example (1):

For a given work package, the probability of occurrence of
a certain risk is 50%, therefore the subjective value of prob-
ability (P) equals 0.5 on a scale from 0 to1.

If the original cost of this work package is EGP 100,000 and
if the risk occurs it will increase the cost by EGP 18,000
(18% cost increase), therefore the corresponding subjective
value of cost impact (I) equals 0.2 on a scale from 0 to 1
based on risk impact calculation standard (Fig. 1).

If the original duration of this work package is 20 days and
if the risk occurs it will increase the duration by 5 days
(25% time increase), therefore the corresponding subjective
value of time impact (I) equals 0.8 on a scale from 0 to 1
based on risk impact calculation standard (Fig. 1).

It is clear that the impact score of time is greater than that
of cost, therefore for safety consideration, the maximum
value of (I) will be considered to calculate the risk score.

The risk score (RS) = 0.5 * 0.8 = 0.4, this value is entered
to the Probability and Impact Matrix (Fig. 2) where it
shows that the risk category (RC) as HIGH and accordingly
it warrant a risk response planning.
The probability subjective score (P) and impact subjective
score (I) are then used to calculate risk score (RS) using the fol-
lowing equation:
Risk management framework for Continuous Flight Auger piles construction in Egypt
Fig. 2 Probability and impact matrix (Source: [25] modified).
RS ¼ P  I ð1Þ
The calculated risk score (RS) is then used to recognize the risk
ranking (RR) for each single risk (e.g. the highest risk score RS
will be ranked as the most important risk with risk ranking
RR = 1 and so forth in a descending order), the risk score
RS is also used as an input to the probability and impact
matrix to classify risks into high, moderate or low as shown
in Fig. 2.
Each risk is rated on its probability of occurrence (P) and
impact (I) if it does occur, the job risk thresholds are shown
on the matrix where high, moderate and low risks are located
in the grey, light grey and dark grey zones respectively based
on its risk score (RS). The identified risks were then subjected
to an evaluation by a sample of sixty nine experts with a vari-
ety of experiences, backgrounds and perspectives such as con-
tracting, consulting or academia to perform a complete
qualitative risk analysis for CFA projects in Egypt and the
results were collected and shown in example (2) and Table 1.
Example (2):

For the External Risks category; the values of (P) and (I)
are the average values out of sixty nine expert responses
by dividing the sum of evaluation values by 69.

For major forces risk (1a); the average value of (P) was 0.19
and that of (I) was 0.47 based on the average of 69 readings,
accordingly the risk score (RS) equals 0.0893.

Similarly, for weather conditions risk (1b); the average
value of (P) was 0.53 and that of (I) was 0.14 based on
the average of 69 readings, accordingly the risk score (RS)
equals 0.0742.

The risk ranking (RR) is 1 for major forces risk for having
the higher risk score, then 2 for weather conditions.

The risk category (RC) of both risks is Medium based on
standard probability and Impact matrix.

The total risk score (TRS) for this category is calculated by
adding the values of risk scores to be equals 0.164.
2671
According to the previous evaluation results, the total risk
score (TRS) of each main risk category is calculated as the sum
of all risk scores under this category as shown in Eq. (2). Risk
categories were prioritized in a descending order as follows;
design risks, equipment risks, economical risks, construction
risks, management risks, owner granted risks, political risks,
subcontractor risks and external risk with TRS of 0.64, 0.59,
0.58, 0.56, 0.45, 0.44, 0.29, 0.18 and 0.16 respectively as shown
in Pareto diagram in Fig. 3.
X
TRS ¼ RS ð2Þ
8. Risk diagnostics
The objective of risk diagnostics process is to understand and
explain every single identified risk by recognizing and analyz-
ing the root cause of such risk, documenting the risk in a
Cause/Risk/Effect (CRE) format to provide sufficient knowl-
edge to anticipate risk behavior and thus choosing the appro-
priate response. This approach should depend on various data
sources to get a comprehensive knowledge regarding CFA con-
struction risks such as; company various levels of expertise,
published academic or industry articles, specialized consulting
firms even in risk management or geotechnical engineering and
benchmarking of industry competitors who may face similar
risk events.
The risk diagnostics meetings, face-to-face consultations or
phone calls were held to discuss various opinions about risk
causes where sometimes there was a consensus or a slight vari-
ance between expert inputs. All opinions were integrated
through a series of workshops with a nominal group of experts
to document, filter and organize the diagnostics results as
shown in Table 2. The table is divided into four columns rep-
resenting the risk identification number, the root cause that
may initiate the risk, the risk event itself and the consequence
effect on schedule and/or budget.
2672 H.E. Hosny et al.

Table 1 Qualitative risk analysis results.

Category SN Risk factor Analysis
P I RS RR RC
External risks (TRS = 0.164) 1a Major Forces (floods, wars . . .) 0.19 0.47 0.0893 1 M
1b Weather Conditions 0.53 0.14 0.0742 2 M
Design risks (TRS = 0.640) 2a Inadequate soil assessment 0.52 0.44 0.2288 1 H
2b Scope creep, shrinkage or vagueness 0.37 0.22 0.0814 3 M
2c Innovative construction methods, equipment or materials 0.42 0.26 0.1092 2 M
2d Design changes 0.3 0.27 0.081 4 M
2e Incomplete design or information 0.29 0.23 0.0667 6 M
2f Delay in designer’s response 0.36 0.2 0.072 5 M
Management risks 3a Poor stakeholders communication 0.45 0.34 0.153 1 M
3b Improper organizational Structure 0.29 0.28 0.0812 3 M
(TRS = 0.451) 3c Poor staff qualification 0.24 0.2 0.048 5 L
3d Delay in inspection and testing 0.2 0.09 0.018 6 L
3e Delay in approval of contractor’s submittals 0.35 0.16 0.056 4 M
3f Ineffective decision making 0.45 0.21 0.0945 2 M
Construction risks (TRS = 0.564) 4a Lack of quality management (planning, assurance and 0.14 0.28 0.0392 6 L
control)
4b Labor mistakes, rework and idle times 0.21 0.49 0.1029 3 M
4c Labor shortage 0.19 0.23 0.0437 5 L
4d Labor conflicts and disputes 0.13 0.24 0.0312 7 L
4e Safety issues 0.32 0.44 0.1408 1 M
4f Labor cost fluctuations 0.17 0.41 0.0697 4 M
4g Surveying and site handling mistakes 0.39 0.35 0.1365 2 M
Sub-contractors risks (TRS = 0.179) 5a Lack of managerial skills 0.58 0.14 0.0812 1 M
5b Delay in delivering project requirements 0.3 0.17 0.051 2 L
5c Low credibility 0.31 0.15 0.0465 3 L
Equipment risks (TRS = 0.591) 6a Accidents 0.46 0.47 0.2162 1 H
6b Improper/Inadequate maintenance 0.28 0.34 0.0952 4 M
6c Delay in conducting services 0.35 0.16 0.056 5 M
6d Delay in spare parts delivery 0.44 0.27 0.1188 2 M
6e Lack of operators competency 0.36 0.29 0.1044 3 M
Political & governmental risks 7a Political instability 0.26 0.19 0.0494 3 L
(TRS = 0.285) 7b Corruption risks (bribes, demands . . ..) 0.45 0.23 0.1035 1 M
7c Failure to obtain approvals or permits 0.28 0.3 0.084 2 M
7d Import restrictions 0.31 0.15 0.0465 4 L
Economical risks (TRS = 0.587) 8a Fund shortage 0.33 0.41 0.1353 3 M
8b Inflation/price changes 0.3 0.55 0.165 2 H
8c Taxation risks (rising taxes or new taxes) 0.19 0.31 0.0589 4 M
8d Economic Crisis 0.15 0.36 0.054 5 M
8e Foreign currency risks 0.28 0.62 0.1736 1 H
Owner Generated risks (TRS = 0.438) 9a Failure to finance the project 0.41 0.34 0.1394 1 M
9b Unqualified owner representatives 0.49 0.27 0.1323 2 M
9c Delay/refusal of compensation to the contractor 0.44 0.23 0.1012 3 M
9d Ultra standards requirements 0.16 0.14 0.0224 5 L
9e Delay/inability to provide full possession of the site 0.17 0.25 0.0425 4 L

9. Risk response planning
A risk response is a planned action to proactively enhance
opportunities and reduce threats to project objectives. This
can be done by analyzing the root cause(s) of a certain risk
as well as its behavior if occurred to develop the most appro-
priate option to deal with it. To optimize risk response efforts,
only high and moderate risks are supposed to warrant a
response and each risk should have two main responses; a pre-
ventive or proactive response that aims to deal with a certain
risk before it happens which is considered to be easier, more
probable to succeed and of lower cost, and a corrective
response or a workaround that deals with a risk reactively after
it happens to cure its effect(s) as much as possible. Also, it is
beneficial to merge risks of common causes through one
response – if possible – to reduce cost, time and effort
according to [25], there are four strategies to deal with threats;
(1) Avoidance: eliminating the threat by eliminating its cause,
(2) mitigation: reducing the risk score by reducing its
probability of occurrence and/or impact as much as possible,
Risk management framework for Continuous Flight Auger piles construction in Egypt 2673

0.7

0.6

0.5

0.4

TRS
0.3

0.2

0.1

CFA Risk Categories

Fig. 3 TRS values of CFA risk categories.

Table 2 CFA Risk Diagnostics Information.

Risk ID Cause
Risk
Potential Effect(s)
1a – Act of God (earthquake or flood)
– Political issues (revolution or public disorder)
– Full or partial stop/damage of equipment
– Full or partial theft
– Delay in construction due to idle time
– Over cost of repair, supplements and security
1b – Storms and rain
– High temperature
– Low production rate due to rain consequences (heavier soil, sliding, improper equipment maneuvering and surveying mistakes)
– Low production rate due to fatigue of labor, lubrication and other maintenance
– Delay and/or over cost for surveying, construction and maintenance reworks
– Delay and over cost
2a – Inadequate soil assessment due to inaccuracy, lack of knowledge or experience of consultant
– May result in an unplanned soil conditions (soil failure, improper auger penetration or unforeseen soil components
– Delay in the commencement of construction and over cost to develop a new soil investigation report
2b – Scope creep, shrinkage or vagueness
– May result in conflict of interests and technical opinions during construction
– Causing a cost and schedule overrun to get cross functional approval on scope baseline
2d – Design changes due to a change in designer’s and/or owner’s mind
– May result in a construction idle time if the changed work package is in progress
– Schedule delay and cost overrun while awaiting the design updates
2e – Incomplete design or information
– May result in a construction idle time to request the missing information
– Schedule delay to require information and/or cost overrun due to idle equipment and labor
2f – Lack of communication planning between stakeholders.
– Delay in designer’s response especially on urgent consultation requests during construction
– Schedule and/or cost overrun according to the case size and complexity
3b – Improper/unclear organizational structure
– Conflict of interest, duplication of tasks, existence of communication barriers and failure of work assignments
– Schedule delay to deal with conflicts and cost overrun due to scope creep and reworks
(continued on next page)
2674 H.E. Hosny et al.

Table 2 (continued)
Risk ID Cause
Risk
Potential Effect(s)
3e – Delay in approval of contractor’s submittals
– The contractor may not be able to move forward with the planned milestones due to delayed funding
– Delay in work progress and/or cost overrun to cover cash in delays
3f – Ineffective decision making due to inexperienced management and executing staff
– Delays, faulty construction, scope creep, non-value added work and more labor conflicts
– Schedule and cost overruns to deal with bad consequences of decisions
4b – Lack of quality management procedures (planning, assurance and control)
– Quality problems to be discovered and solved after testing rather than being resolved earlier
– Causing cost and/or schedule overrun to cover reworks, defect repairs and re-testing
– Long term business losses due to customer dissatisfaction and bad reputation
4e – Improper safety planning, procedures or control
– May cause accidents, injuries, fire or death
– Unaccepted safety issues
– Schedule and cost overruns for curing, governmental investigations and public obligations
4f – Due to severe inflation rates within the last five years
– Labors frequently ask for wages increase to cover their life essentials
– Schedule delay to negotiate with labor and/or cost overrun to cover increased labor cost
4g – Lack of skilled surveyors and/or calibration of surveying equipment
– Causing surveying and site handling mistakes leading to faulty pile location
– Schedule and cost overruns of redesign, modification and testing of successor structural components (semels, straps and pile caps)
5a – Lack of managerial skills in project managers and site engineers
– Ineffective planning, executing, decision making and control in various project tasks
– Schedule and/or cost overruns according to size and complexity of issues
6a – Due to improper site organization, unskilled drivers, improper safety precautions and using deteriorated equipment
– Equipment and human accidents may occur
– Unaccepted safety issues
– Schedule and cost overruns for curing, governmental investigations and public obligations
6b – Improper and/or inadequate maintenance for equipment.
– Idle equipment and/or low production rate
– Schedule delays to fix equipment in and off site
– Cost overruns to cover replacements of affected spare parts rather than traditional maintenance
6d – Due to foreign currency restrictions and price fluctuations
– Delivery of imported spare parts may be delayed causing idle equipment
– Causing a schedule delay and/or cost overrun to cover outsourcing of alternative equipment
6e – Lack of skilled operators who prefer to work abroad
– Leading to a decrease in production rates and/or idle equipment
– Schedule delay
7b – Due to lack of security in some provinces after political disorder of January 2011
– Bribes, demands or public obligations may face the project execution
– Schedule delays for negotiations, restoring theft items and governmental investigations
– Cost overruns for replacing stolen items, acquiring security guards or to respond to illegal demands
7c – Due to complexity of governmental procedures in Egypt
– Owner and/or contractor may fail to obtain certain approvals or permits
– Causing a delay in the commencement of work
8a – Due to lack of current assets and/or delay in submittals approval
– Contractor may fully or partially fail to fund the project
– Causing a schedule delay due to lack of resources and/or cost overruns to cover sellers/banks credit interests
8b – Due to severe increases in inflation rates
– Prices of resources may be dramatically increased
– Causing an ultra predictable cost overrun

8e – Closure of most of exchange companies and Central bank restrictions

– Foreign currencies (US Dollars and Euros) may become unavailable to import spare parts
– Schedule delays for idle equipment and/or cost overruns for black market exchanges
Risk management framework for Continuous Flight Auger piles construction in Egypt 2675

Table 2 (continued)
Risk ID Cause
Risk
Potential Effect(s)
9a – Because the customer is depending on sales to secure project funds.
– Causing a full or partial failure to finance the project, and consequently to contract disputes
– Schedule delays to settle claims or arbitration
– Cost losses
9b – Due to unprofessional owner relationships (relatives, friends and others)
– Owner may assign unqualified/unprofessional representatives
– Schedule delays for handling issues
9c – Due to inaccurate and/or ambiguous contract terms and conditions
– Owner may delay or refuse compensations to the contractor
– Schedule and cost overruns to resolve compensation issues

Table 3 CFA risk response planning.

Risk Risk/Trigger Preventive Response(s) Corrective Response(s)
ID
1a Major forces – Avoid: scope change (design and/or piling – Apply cost and time reserves
method)
1b Weather conditions – Mitigate: scheduling the work out of flood season – Use an instant dewatering system, special personal
tools and equipment
2a Inadequate soil – Avoid: use multiple trusted consultations sources – Stop construction and use a new trusted consultation
assessment (Delphi technique) source
– Mitigate: monitoring the soil intake process
2b Scope creep, – Avoid: clearly define the scope and get final – Communicate the problem to stakeholders through
shrinkage or approval from all impacted stakeholders an integrated change request and get their approval
vagueness
2c Innovative – Exploit: perform a feasibility study, quick deci- – Accept: no action
construction sion making to optimize the use of the new
technology approach
2d Design – Avoid: clearly define the product and get final – Communicate the problem to stakeholders through
2e changesIncomplete approval from all impacted stakeholders an integrated change request and get their approval
design
2f Delay in designer’s – Avoid: clearly show the project communication – Follow up with the designer until you got the desired
response requirements in the designer agreement associated reply
with a penalty for non conformance
– Mitigate: create a planned approach to allow
effective communication between designers and
executers
3a Poor stakeholders – Mitigate: develop a communication management – Maintain status meetings with impacted stakeholders
communication plan based on stakeholders’ communication to clarify any communication problems and perform
requirements. the suitable solution.
3b Improper – Avoid: create a responsibility assignment matrix – Create a new RAM for the rest of the project and
organizational RAM) to define roles, responsibilities and report- introduce it to your team
structure ing relationships
3f Ineffective decision – Mitigate: create decision making procedures.
making
3e Delay in the – Mitigate: tailor a contract clause that organizes – Track the processing of your submittal to claim any
approval of processing of submittals with a due date of delay as early as possible
contractor’s disposition
submittals
(continued on next page)
2676 H.E. Hosny et al.

Table 3 (continued)
Risk Risk/Trigger Preventive Response(s) Corrective Response(s)
ID
4b Labor mistakes, – Avoid: create affirmative selection criteria for – Monitor and control labor performance on a regular
rework and idle labor selection based on experience, skills, compe- basis to detect any variation and take suitable correc-
times tency and capacity to perform tive actions based on analysis of weaknesses (e.g:
– Mitigate: create ground rules regarding labor per- training, development or replacement)
formance with a suitable rewarding system to
motivate them.
4e Safety issues – Avoid: assign an experienced HSE officer to – Determine the nearest hospital/clinic to your site to
secure suitable safety precautions to keep all transfer cases.
stakeholders safe – Be prepared with first aid medications
4f Labor cost – Avoid: use long term contracts with labor with – Negotiate with
fluctuations fixed wages/salaries.
4g Surveying and site – Mitigate: select skillful and experienced surveyors – Apply contingency reserves to adjust (redesign) any
handling mistakes. – Transfer: ask your client to provide you with his surveying mistakes
fixed points
6a Equipment – Transfer: buy insurance to cover predicted – Apply contingency reserves to fix and/or replace
accidents accidents equipment
6e Lack of operators – Mitigate: assign experienced equipment
competency drivers/operators
6b Improper/ – Mitigate: assign mechanical crew with a planned – Apply contingency reserves to fix idle equipment and
inadequate maintenance schedule for each equipment to rent a replacement
maintenance
6d Delay in spare parts – Transfer: sign a maintenance contract with your
delivery equipment provider
7b Corruption risks – Avoid: assign security guards – Inform governmental agencies
(bribes, demands – Transfer: sign a security contract with a special- – Apply reserves to buy replacements
. . .) ized organization
7c Failure to obtain – Transfer: the client should be responsible for – Claim the delay of approvals to compensate your
approvals or obtaining all permits before work commencement losses due to idle time
permits
8a Fund shortage – Mitigate: secure your funding using a variety of – Use later credit funding and/or procurement.
sources (self funding, debt or equity)
– Mitigate: ask the client to pay a down payment
– Mitigate: sign later credit contracts with your sell-
ers and business partners
8b Inflation/price – Mitigate: use contract clauses that allow you to – Apply management reserves
8e changes claim compensation due to price changes
Foreign currency
risks
9a-c Owner generated – Mitigate: use a contract that organizes and details – Claims management
risks contractor/owner relationship to reach a win-win
agreement

(3) transference: assigning the risk package to a third party
who is more capable to deal with the risk through subcontract-
ing or buying insurance and (4) Acceptance: applying contin-
gency reserves to make up risk consequences. Similarly, there
are another four strategies to deal with opportunities; (1)
exploiting: increasing the opportunity as maximum as possible
to turn the risk into a fact, (2) enhancement: increasing the risk
score of a risk by increasing its probability of occurrence and/
or impact, (3) sharing: retaining the opportunities (or part of
it) through joint venture agreements and (4) Acceptance: not
changing the project plan to deal with an upside risk. Table 3
shows the results of CFA risk response planning based on an
expert judgment and panel consultations of executers,
structural consultants and subject matter experts, the table
shows both preventive and corrective responses to secure all
scenarios as well as the trigger or warning sign to initiate an
agreed upon response.
10. Conclusions and recommendations
The research scopes to develop a risk management framework
for Continuous Flight Auger piles construction jobs especially
in Egypt. The key benefit of the proposed model is to get all
stakeholders familiar with risk events, identification tools,
analyses and diagnostics procedures in order to select the most
Risk management framework for Continuous Flight Auger piles construction in Egypt
appropriate risk responses to achieve project objectives such as
budget, schedule and quality. It was started by a comprehen-
sive literature review to draw as much as possible risk factors
affecting construction industry including equipment and piling
tasks. A long list of identified risks was developed based on
sixty nine questionnaire surveys that targeted a variety of
experts. The identified risks were prioritized through a classic
qualitative risk analysis by assessing and combining the prob-
ability of occurrence and impact to compute the risk score of
each specific risk. Results of qualitative analysis ranked the
main CFA risk factors as follows; design, equipment, econom-
ical, construction, management, owner, political, subcontrac-
tor risks with percentage share of 16.5, 15.2, 15.1, 14.3, 11.6,
11.3, 7.4, 4.5 and 4.1% respectively. Risks were categorized
based on a standard probability and impact matrix into high,
moderate (risks that warrant a response) or low risks that
should be neglected. Further diagnostics analysis was per-
formed by experts to identify and document the root causes
of prioritized risk in a standard Cause-Risk-Effect format.
Risk response planning was performed to select reasonable
and appropriate risk responses to reduce the effect of threats
and enhance that of opportunities. The framework was pre-
sented to five main contractors who used it in their projects
and the feedback shows a reduction of 9–12% in schedule
and 3–5% reduction in budget than ever. For further research
elaboration, it is recommended to; extend the approach to
cover other construction equipment risks, progressively elabo-
rate the study of CFA risks to identify, analyze and response
new risks, perform a quantitative analysis to reach duration
and cost estimate for selected responses and integrate the
research results with the previous time and cost estimate mod-
els to produce an adjusted schedule and budget after consider-
ing risks of CFA construction.
Declaration
This paper is based on a PhD thesis of the third author and
supervised by the first two authors.
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