Construction risks

There are numerous construction risks associated with the government’s dam project. These
risks may affect the government if not managed correctly. Unreliable contractors working on
the dam construction project are a major construction risk. Due to their unreliability, these
contractors may cause catastrophic delays to the project schedule and completion date. The
consequence of delay to the dam construction completion date is additional overhead costs to
keep the project running such as labour wages and having equipment and machinery on site.
This in turn may affect the overall budget allowed for the dam construction hence causing
construction claims. In addition to delays, the work of these contractors may lack quality and
be defective due to their unprofessional workmanship. This will affect the overall quality of
the project and may cause defect problems well after project completion.

This risk of having unreliable contractors working on site can be mitigated by applying a
restricted tendering procurement method. This procurement method places a limit on the
amount of tenders by contractors. Therefore, this procurement method is selective in nature.
Only the invited contractors by the procuring team can tender for the dam construction
project. This method is selective to find the best-suited and most qualified contractors. Also,
the previous works of these contractors on other projects can be inspected to examine their
work quality before signing the contract to conduct work on the dam project. Warranties
provided by the contractors are also crucial to cover the government in case of any defects
that arise after completion of the project.

Another construction risk involves poorly written contracts. These contracts include
inaccurate time estimates for the completion of works, an undetailed scope of works, and no
emphasis on the consequence of delays caused such as liquidated damages. These contracts
can either be between the government and the head contractor or between the head contractor
and the subcontractors. The poorly written contracts are a major source of conflict and
dispute between the parties involved. These conflicts often lead to timely and costly
procedures such as litigation in a court of law. This in turn can also cause delay to the project
completion date and put strain on the budget allowed for the dam project.

This risk can be mitigated by writing up an accurate and detailed contract that sets realistic
time frames for completion of works with a detailed scope of works that covers all works
without any exclusions. This level of detail for scope of works will be well suited for the
fixed price lump sum contract type chosen for the dam project. The fixed price lump sum
contract type chosen for the project will eliminate many risks for the government. It transfers
the risk to the head contractor as there are fewer ways to allow them to vary their price and
gives the government some certainty about the likely cost of the works. Also, a well defined
set of conditions for project delay such as liquidated damages applied to the head contractor
for every day delayed past the agreed completion date provides security to the government
and ensures the project finishes on time.

Furthermore, delayed delivery of construction material poses a significant risk to the dam
project. Delayed delivery affects the progression of work on-site and scheduled completion
dates of works. A small site access and delivery area also affect the size and quantity of
deliveries made to site. Small site access and turning bay areas only allow small trucks and
loads to be delivered to site at one time. Once the material is delivered to site, sufficient
storage area for all contractors is required. Insufficient site storage area also causes delays to
work progression on-site since some contractors are required to wait for another delivery to
resume work.

The risk of delayed delivery of construction material can be mitigated by identifying long
lead items early, and investigate backup suppliers for bulk material. This risk can also be
mitigated by choosing to deal with a reliable company representative to process orders and
schedule deliveries. The risk of inadequate site access, delivery/turning area, and storage area
can be mitigated by hiring adjoining private land to increase the area for deliveries.

Finally, inadequate site security is a significant risk to the dam construction project.
Inadequate site security allows break-ins and theft of materials and equipment by workers
and members of the public. Insufficient site security also allows vandalism, arson and other
damages to take place on-site during unstaffed hours. Fire accidents are also a major risk to
the dam project. A single spark from an electrical wire or temporary lighting and the like will
easily set wood, packaging or gasoline, which may be found on the dam construction site,
alight. Therefore, insufficient site security and fire accidents can cause significant delays and
financial losses to the government if not managed correctly.

The risk of inadequate site security can be mitigated by providing proper and secure fencing
with adequate fence base and clamps as well as a padlock on the entry gate. Security cameras
can also be installed on-site which are linked to a security monitoring centre during unstaffed
hours who notify police of any intruders. Contractors should also keep detailed records of all
materials, secure equipment in safe places when it is not being used and register the dam
project’s heavy equipment with their insurer. Also, the risk of a fire accident can be mitigated
by ensuring that the heat, combustible material and oxygen are not combined in an
uncontrolled manner.