CCP Certification Technical Paper

The main risks in construction of schools in Saudi

Arabia
)March 2017(

Ahmed Yousef, PMP

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Table of Contents Page
III
List of Tabl…………………………………………………………………………………………
IV
List of Charts ……………………………………………………………………………………..
V
List of Equations ………………………………………………………………………………..
VI
Abstract …………………………………………………………………………………………….

2. Literature Review …………………………………………………………………………. 1

2.1 The Construction Of Schools.……………………………………………………….. 1

2.2 Risk Management and Success Factors…………………………………………. 2

2.2.1 Introduction to Risk Management…………………………………………….. 2

2.2.2 Plan Risk Managemen………………………………………………………………. 3

2.2.3 Identify Risks…………………………………………………………………………….. 3

2.2.4 Perform Qualitative Risk Analysis ……………………………………………… 4

2.2.5 Perform Quantitative Risk Analysis……………………………………………. 4

2.2.6 Plan Risk Responses………………………………………………………………….. 5

2.2.7 Monitor and Control Risks………………………………………….…………….. 5

3. A Case Study………………………………………….……………………………………… 6
3.1 Establishing The Context………………………………………….…………..
6
……... .
3.2 Risk Identification……………………………………………………….……..……….. 7

3.3 Qualitative Risk Analysis……………………………………………….…………….. 9

4. Conclusion………………………………………….……………………………………..….. 13

Bibliography………………………………………….………………………………………….. 14

II
List of Tables Page
Table 1, “Risks List ” ………………………………………………………. 8

Table 1, “Risks Ranking ” ………………………………………………….. 10

III
List of Equations Page
Equation 1, “Risk Ranking ”…………….…………………………………... 9

IV
List of Charts Page
Chart 1, “High priority Risks”…………….……………………………… 11
Chart 2, “Medium Priority Risks”…………….………………………… 11
Chart 3, “Low priority Risks”…………….……………………………… 12

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 Abstract
The risk management is a key factor in construction projects. The main objective of
managing risk is to analyze and classify the risks and establish an approach to
minimize the negative risks and increase opportunities. Construction of schools in
Saudi Arabia has a particular nature, and one of the most important features is the
short period to finish the project on the specified time and within budget. Moreover,
because of this function, multiple risks may be rose starts from initiation followed by
executing and ended by handing over. These risks could affect the project negatively,
especially on the organization's economies. Even if the construction projects are
similar in its components and purposes, but just changing the place is sufficient to
make these projects differ from each other and therefore may these projects
exposed to risks. These risks can interact with each other and could affect negatively
both on the cost and the time needed to complete the projects. This paper provides
an overview of identifying risks, qualitative assessment about a real school project.

Keywords: Risk management; identification of risks; Qualitative assessment; school project

Audience:
 Project managers: because they need to finish their projects according to the
necessary cost and time.
 The owner: because he needs to know whether the contractor submitted his price
in a scientific manner or not.
 Contractors: because they interested to know all risks related to project and they
need to analyze the risks, then they produce or put the right and competitive price.

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1. Introduction
The construction industry has a major effect on any country’s economy. There is an
intimate and co-connection between the construction industry and the other
economic sectors. However, there are a plenty of risks face construction and building
industry. These risks have a major effect on the progress of the projects which lead
to project delays, cost overrun, and poor quality. In this context, there are many risks
such as lack of engineer’s skills, centralization of authority, changing in design, price
risks, communications between stakeholders, inflation risks, political climate and
weather factors.
The primary goal of risk management is to analyze and classify the risks and establish
an approach to minimize the adverse risks and increase opportunities. Project
stakeholders should make the correct decisions related to risks to finish the project
and fulfill objectives.
Construction of schools is fraught with risks which face the contractor or the owner,
and it is hard to avoid or predict it unless these risks identified previously. The
contractor, owner, and other stakeholders should identify all possible risks related to
school projects and find suitable solutions to mitigate, avoid, and share risks to
complete the projects on time and within the authorized budget.
The next pages concentrate on showing an overall view of risk management
processes, factors affecting the success of the application and case study from a real
project. The case study includes risk identification, qualitative risk analysis.

2. Literature Review
The literature review of this paper covers two main topics: (1) The construction
schools, (2) Risk management and success factors.

2.1 The Construction of Schools

Schools construction is similar to the others construction projects, and its construction
processes are standard for almost contractors companies and can state as following

 Mobilization works which include installing the temporary fence and

furnishing the site offices.
 Earthworks and Substructure works which include all activities related to
earthworks such as excavation to reach design levels and dimensions,
compaction and backfilling, plain concrete works for the foundations,
reinforced concrete works for the foundations, grade beams and neck
columns, insulation works, and backfilling works.
 Superstructure works which include reinforced concrete for the columns,
slabs, and

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  Finishing works which include all activities related to the external and internal
finishes plus MEP activities.

2.2 Risk Management and Success Factors

As stated in the PMBOK ® Guide – Fifth Edition, Risk Management covers six
processes are as follows:
• "Plan Risk Management.
• Identify Risks.
• Perform Qualitative Risk Analysis.
• Perform Quantitative Risk Analysis.
• Plan Risk Responses.
• Monitor and Control Risks".

2.2.1 Introduction to Risk Management

The principal objective of project risk management is to implement projects
according to the authorized budget, the specified time and required specifications. It
is an attempt to determine the potential impact of threats and the likelihood of
occurrence on the organization.It involves taking appropriate action to address these
threats and to verify the probability of obtaining terms. The study of these
possibilities leads to taking the significant steps to reduce the occurrence of these
risks.Risk management should include the definition of risks, qualitative and
quantitative risk analysis, risk response, and monitoring and control of risk analysis.

The PMBOK ® Guide – Fifth Edition describes the objective of the project risk
management as, "The objectives of Project Risk Management are to increase the
probability and impact of positive events and decrease the probability and impact of
negative events in the project." "Also, The The PMBOK ® Guide – Fifth Edition defines
project risk management as, Project Risk Management includes the processes
concerned with conducting risk management planning, identification, analysis,
responses, and monitoring and control on a project." "Also The The PMBOK ® Guide
– Fifth Edition states, a project risk is an uncertain event or condition that, if it
occurs, has a positive or adverse effect on a project’s objectives."

The risk is the possibility of an adverse deviation from the desired or expected, or
hoped-for result. The primary purpose of risk management is the risk measurement
for monitoring and control. Another definition of the risk is the logical process to
define, analyze, and respond to the risk of the project.

Risk management process must start early starts from project planning and go
through project execution and project closure.The project manager, team members,
stakeholders, and experts from outside the project should participate and involved in
this process and are responsible for managing risks.

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In our real world, some people believe in that the risks is just adverse events and
harm the person or the organization but in real risks can be a positive event too.It
can give the person opportunities to enhance his life attitude and can provide the
organization to improve their projects and gain benefits.

2.2.2 Plan Risk Management

The purposes of the plan risk management are to establish a management strategy
for all the project risks, to determine how can the project manager, his team, and
stakeholders execute this strategy and to make an integration between project risk
management and the other activities.
The project staff should develop the plan risk management in the early stage of the
project. This process defines the work needed for risk management. Throughout this
process, the project manager and his team members determine the tasks required
to manage the risks, the needed resources, relations between activities, roles, risk
management policy and responsibility.
Progressive elaboration is a feature of the plan risk management.The project
manager should consider some factors needed to confirm the achievement of this
process – according to practice standard for project risk management, By PMI- as
follows:

- " Identify and Address Barriers to Successful Project Risk Management

- Involve Project Stakeholders in Project Risk Management.
- Comply with the Organization’s Objectives, Policies, and Practices".

2.2.3 Identify Risks

Identify risks is the important process and without it, we cannot manage the risks as
required. The participants in this process should follow some steps to identify the
risks as follows:
In this process, by using tools and techniques, the project manager and his team can
identify the possible risks which face the project.Risks may appear during project
phases, so risk identification process must be iterative.The basic output of this
process is the risk register. The project manager and the staff members should write
all the identified risks with all required details, and everyone can understand it. The
project manager should be aware of some factors to manage this process as well
and to confirm the success of it -according to practice standard for project risk
management, By PMI- as follows:
- "Early Identification.
- Iterative Identification.
- Emergent Identification.

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 - Comprehensive Identification.
- Explicit Identification of Opportunities.
- Multiple Perspectives.
- Risks Linked to Project Objectives.
- Complete Risk Statement.
- Ownership and Level of Detail".

2.2.4 Perform Qualitative Risk Analysis

After the project manager and his team have identified the risks, the next step is to
assess and analyze theses risks.They should use perform qualitative risk analysis
process.In this process, they need to characterize and evaluate each risk.Also, they
need to rank each risk according to its probability and its impacts on the project
objectives.The outputs of this process are risk register updated and watch
list.Updated risk register output contains the high ranking risks as well as all the
needed information about these risks. Watchlist output carries the risks which
ranked low-risks. There are also some factors must be considered to ensure the
success of this process - as per practice standard for project risk management, By
PMI- as follows:
- "Use Agreed-Upon Approach.
- Use Agreed-Upon Definitions of Risk Terms.
- Collect High-Quality Information about Risks.
- Perform Iterative Qualitative Risk Analysis".

2.2.5 Perform Quantitative Risk Analysis

The second step should the project manager do in the planning risk phase is to
perform quantitative risk analysis.This process assesses and evaluates the risks
numerically.The project management staff can neglect this process if he does not get
enough information about the risk or if the effort of this process costs more.After
completing this process, the project manager and the team members can determine
the likelihood of achieving the project objectives also they can determine the
contingency needed (cost and time)for the risky activities.There are also some
factors must be considered to ensure the success of this process - as per practice
standard for project risk management, By PMI- as follows:
- "Appropriate Project Model.
- Commitment to Collecting High-Quality Risk Data.
- Unbiased Data.
- Overall Project Risk Derived from Individual Risks.
- Interrelationships Between Risks in Quantitative Risk Analysis".

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 2.2.6 Plan Risk Responses
After finishing quantitative risk analysis, the next step is to develop a plan for
responding the identified risks.This Process describes the necessary actions required
from the responsible to deal with risk.The responsible should do the action in a
proper manner and on time. Sometimes during executing phase, new risks can rise
when response plan is working.So, the project manager should review these risks,
and update the risk register.When the stakeholder response to the positive risk, he
or she can share, enhance, accept, and exploit it, but when he or she response to the
negative risk, he or she can transfer, avoid, accept or mitigate it. There are also some
factors must be considered to ensure the success of this process - as per practice
standard for project risk management, By PMI- as follows:
- "Apparently, Define Risk-Related Roles and Responsibilities.
- Communicate.
- Specify Timing of Risk Responses.
- Provide Resources, Budget, and Schedule for Responses.
- Address the Interaction of Risks and Responses.
- Ensure Appropriate, Timely, Effective, and Agreed-Upon Responses.
- Address Both Threats and Opportunities.
- Develop Strategies before Tactical Response".

2.2.7 Monitor and Control Risks

During this process, the project manager, team members, and responsible
stakeholders should monitor the identified risks and residual risks. Also, they can
identify and make adjustments for new risks, and also it helps them to know if the
response plan is executing at the right time or not. There are also some factors must
be considered to ensure the success of this process - as per practice standard for
project risk management, By PMI - as follows:
- "Integrate Risk Monitoring and Control with Project Monitoring and Control.
- Continuously Monitor Risk Trigger Conditions.
- Maintain Risk Awareness.
- Tools and Techniques for the Monitor and Control Risks Process".

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3. A Case Study
The following pages provide a case study for a real project in Saudi Arabia. The
project is a construction of a high school for boys.

3.1 Establishing the Context

 Project name: Construction of Ibn Hazm High School for boys
 Contract Value (SR): 20,000,000
 Project Duration: 12 Months
 Project units: The main building, multipurpose sports hall, football court and
guard room.
 Project Location: -Al Qassem –Saudi Arabia.
 Stakeholders:
1. Ministry of Education
2. Al Qassem Educational Directorate
3. Arabian Contractor Company
4. The project manager and all working stuff
5. The sub-contractors
6. The suppliers
7. The Environment
8. The School Manager
9. The neighbors
10. Saudi Electricity Company
11. Ministry of Water

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 3.2 Risk Identification

Historical Review, SWOT Analysis, Interviewing, Brainstorming, Delphi technique,

and Expert judgment are the tools and technique which used in identifying the risks.
Risk list as follows:

No Risk Description

Excavation in undefined Excavation in Rock soil takes a long time more than excavation in
1
soil sandy soil and costs more rather than increasing costs.

Poor skills of the labors Poor skills of the labors cause decreasing in productivity and lead
2
and site engineers. to project delays.

All the team members must do all, and only the required work, if
3 Scope of the work not, the gold plating and the scope creep are going to take place
and also cost more.

Executing the activities in a bad quality lead to rework and put the
4 Poor quality
project over budget.

Working in such hot, cold, sand windy weather may cause

5 Weather conditions
decreasing in productivity and sometimes work stoppage.

Due to the owner’s payment delays, the contractor may not be

6 Payments delays
able to deliver the project on time.

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 Design and scope Due to the design errors or scope changing, the work is going to
7
changing stop partially or wholly.

Communications between Poor and misunderstanding communication lead to delay the

8
stakeholders works.

Difficulty in obtaining a license or work permits from the

9 Permits and approval. authorized entities lead to a work stoppage.

1 Inflation and prices Due to inflation and prices fluctuation, the labors, and materials
0 fluctuations are going to increase and result in excessive in the project budget.

1 Difficulty to reach or access the site such as the topography of the

Site accessing
1 areas next to or beside the project.

No Risk name Description

Lack of a safety lead to workers injuries and lack of loyalty to the

1
Safety plan does not exist project, also, the absence of employees as a result of injuries.
2

Because of bribery, some work may be carried out incorrectly, and

1 Bribery
sometimes the building may collapse.
3

1
Change orders Change orders can lead to an extension of the project schedule.
4

1 Any materials especially those related to the critical activities

Shortage of materials
5 result in delays in the project delivery.

1 Delays in delivering Any delay in delivering electricity facilities lead to imposing

6 Electricity facilities penalties.

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1 Delays in delivering water Any delay in delivering water supply facilities result in imposing
7 supply facilities penalties.

1 Delays in delivering Any delay in delivering sanitation facilities lead to imposing

8 sanitation facilities penalties.

1 Environmental disasters result in work stopping rather than loss of

Environmental disasters
9 money and life

2 Government changes result in changing laws and legislations

Government changes
0

Risk list (Table – 1)

3.3 Qualitative Risk Analysis

Throughout this process, each risk is analyzed and assessed. The range of
likelihood and impact is fall between (0 – 100) %.
The project manager, team members, and external experts participated in the
evaluations of the impact and probability of the risk list.
According to "Risk management for overseas construction projects, He Zhi,
School of Civil and Structural Engineering, Nanyang Technological University,
Singapore 2263- page 234."

R=P×I (Equation – 1)
Where:
"R" is the degree of risk, within [0,100] %.
"P" is the probability of the risk occurring, within [0,100] %.
"I" is the degree of impact of the risk, which is defined as being within [0,100] %.

The following table is presenting the ranking of risks. The table shows a variety
of ranks as risks may be high risk, medium, or low.

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 .

Probability Impact Risk Ranking Risk priority

No Risk name
(P, %) (I, %) (R,%)
1
Excavation in undefined soil 70 80 56 High

2 Poor skills of the labors and

35 70 24.5 Medium
site engineers.
3 Scope of the work 30 20 6 Medium
4 Poor quality 10 50 5 Medium
5 Weather conditions 90 90 81 High
6 Payments delays 90 90 81 High
7 Design and scope changing 10 50 5 Medium
8 Communications between
55 70 38.5 High
stakeholders
9 Permits and approval. 15 20 3 Low
10 Inflation and prices
30 50 15 Medium
fluctuations
11 Site accessing 10 20 2 Low
12 Safety plan does not exist 70 80 56 High
13 Bribery
10 90 9 Medium

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14 Change orders 10 30 3 Low
15 Shortage of materials 20 20 4 Low
16 Delays in delivering
80 90 72 High
Electricity facilities
17 Delays in delivering water
90 80 72 High
supply facilities
18 Delays in delivering
70 90 63 High
sanitation facilities
19 Environmental disasters 2 80 16 Medium
20 Government changes 90 60 54 High

Risk Ranking (Table – 2)

The next three charts represent the high risks priority, medium risk priority,
and low risks property respectively.

Excavation in undefined soil

Weather conditions
Payments delays
Communications between
stakeholders
Safety plan does not exist
Delays in delivering Electricity
facilities
Delays in delivering water
supply facilities
Delays in delivering sanitation
facilities
Government changes

High priority Risks (Chart – 1)

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 Poor skills of the labors and site
engineers.
Scope of the work
Poor quality
Design and scope changing
Inflation and prices fluctuations
Bribery

Environmental disasters

Medium priority Risks (Chart – 1)

Permits and approval.

Site accessing

Change orders

Shortage of materials

Low priority Risks (Chart – 3)

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4. Conclusion
In general, all construction projects are linked with risks. Risk management is an
iterative process; it can starts in the planning phase and also can go through
execution phase. There are some factors must be aware of through risk management
processes to ensure the success of these processes.Schools constructions are risky
projects and must be managed to implement the project according to its
objectives.Risk management is essential for the project manager in implementing
the project; he can provide support to his organization and his project as follows:
- Savings extra costs
- Deliver the project on time
- Enhance the performance
- Obtain lessons learned
- Enhance future estimate
- Drive your company and your team members forward

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 Bibliography

No
. Description

1. Practice Standard For Project Risk Management

Project Management Institute

2. PMBOK ® Guide – Fifth Edition

Project Management Institute

3 Risk Management For Overseas Construction Projects

He Zhi
School of Civil and Structural Engineering, Nanyang Technological
University, Singapore 2263

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