NICMAR

National Institute of Construction Management And

Research

Pune Campus

Project Risk Management

Name of Organization:

Brigade Enterprises Ltd

Submitted To: Prof. Avirag Bajpai

Submitted By: ACM 34 Sec ‘6’ Group 9

Anupam Singh AP20268

Kartik Ashok Happalad AP20282
Vishal Ekka AP20289
Shubrath Choudhary AP20292
Abhishek Megeri AP20347

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About the Company

The Brigade Group is one of India’s leading property developers with over three decades of
expertise in building positive experiences for all stakeholders. Instituted in 1986, the
company has developed many landmark buildings and transformed the skyline of cities
across South India, namely – Bengaluru, Mysuru, Mangalore, Hyderabad, Chennai and Kochi
with developments across the Residential, Commercial, Retail, Hospitality and Education
sectors. Since its inception, Brigade has completed 250+ buildings amounting to over 70
million sq. ft of developed space across a diverse real estate portfolio.
Brigade assures best-in-class design and top-of-the-line facilities that exude elegance and
sophistication. The Residential developments include villas, villaments, penthouses, premium
residences, luxury apartments, value homes, urban studios, independent living for seniors and
mixed-use lifestyle enclaves and townships. Over the years, the projects have been one-of-a-
kind in the sector, for example Brigade developed Brigade Gateway, Bengaluru’s first
lifestyle enclave and Brigade Exotica, one of the tallest residential buildings in Bengaluru.
Brigade is among the few developers that also enjoys a reputation of developing Grade A
Commercial property. The license owners of the World Trade Centre across South India, the
Group’s commercial spaces have top international clients operating out of them. Brigade also
entered the co-working space with ‘Buzz Works’ in March 2019. The commercial segment
has seen consistent growth over the last few years with over 5 million sq. ft of office spaces
under development.
Brigade Retail’s first venture was the iconic, world-class Orion Mall at Brigade Gateway,
subsequently expanding with Orion Avenue and Orion Uptown. Brigade’s Hospitality
offerings include star hotels, recreational clubs, convention centres and The Baking
Company, a unique patisserie.
Brigade is the founder of The Indian Music Experience (IME) – a monumental and
philanthropic initiative that is India’s only hi-tech interactive music museum. It was
conceived to give back to society and sensitise the present generation to the rich culture of
Indian music. The Group contributes in numerous ways towards community development,
health, education, and the environment. Through the Brigade Foundation, the brand has
successfully opened three schools in its name, offering a holistic education; has conducted
large-scale tree plantation drives; spruced up parts of the city; revived public recreational
spots like lakes and parks, to name a few.
Brigade Real Estate Accelerator Program (REAP), India’s first start up accelerator program,
is a prelude to the changing trends in the real estate industry, which is standing on the cusp of
disruption. REAP brings along innovators and inventors to use technology as a catalyst for
creating sustainable and scalable businesses in the real estate industry.
For 10 years in a row, ‘Great Place to Work Institute’ has rated the Brigade Group as one of
India’s best companies to work for in the real estate industry. This responsible attitude and
innovative mind-set combined with uncompromising quality of the projects over the years
has created a brand of outstanding repute.

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Company mission: To constantly endeavour to be the preferred developer of Residential,

Commercial & Hospitality paces in the markets in which we operate, without compromising
on our core values, for the benefit of all our stakeholders.

Company vision: To be a World-class Organization in our Products, Processes, People, and

Performance

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About Projects

Project Name: Brigade Prakside East

Location: Sarjapur Road, Bangalore
Type: 1 & 2 BHK Apartments
Strength: G+13 Floors having 282 units
Cost: RS 49 lakh onwards
Special features: fully equipped clubhouse, health centers, housekeeping and assisted care
facilities, gymnasium, swimming pool.

Project Name: Brigade Meadows

Location: Kanakapura Road, Bangalore
Type: 1, 2 & 3 BHK Apartments
Strength: 40 Towers
Cost: RS 38 lakh onwards
Special features: Club House, Swimming Pool, Park, Banquet Hall, Jogging and Strolling
Track, Indoor Games Room, Kids Play Area.

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Project Name: Brigade 7 Gardens

Location: Banashankari 6th Stage, Bangalore
Type: 1,2 &3 BHK Apartments
Strength: G+14 Floors, 7 Blocks having 678 units
Cost: RS 26 lakh onwards
Special features: Sports area, signature club, Arts village, Social infrastructure

Project Name: Brigade Bricklane

Location: Kogilu Road, Jakkur, Bangalore
Type: 1&2 BHK Apartments
Strength: G+12 Floors having 749 units
Cost: RS 38 lakh onwards
Special features: Reflexology pathways, Senior citizen’s sitting area, Barbeque counter,
Gym, Swimming pool.

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Project Name: Eden At Brigade

Cornerstone Utopia
Location: Varthur Road, Bangalore
Type: 1 & 2 BHK Apartments
Strength: G+26 Floors having 810 units
Cost: RS 40 lakh onwards
Special features: Multiplex Event Lawn, Youth Corner, Art and Cultural Garden, Swimming
Pool, Volleyball Court

Project Name: Brigade Woods

Location: ITPL, Whitefield, Bangalore
Type: 1, 2, 2.5, 3 & 3.5 BHK Apartments
Strength: 17 Blocks having 333 units
Cost: RS 1.45 Cr onwards
Special features: equipped clubhouse, gymnasium, swimming pool, recreation rooms,
outdoor sports courts, children’s play area, party hall.

RISKS
1.Risk Category: Financial Risks
• Project funding problems
• Incomplete or inaccurate estimate
• Price inflation of construction materials
• Fluctuation in currency and interest rates
• Fluctuation in estimated finance than expected
• Labor-market and labor cost increase

2.Risk Category: Execution Risks

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• Contractors’ poor management ability

• Poor competency of labourer
• Inadequate safety measures, safety operations
• Major/Minor accidents during execution
• Delay in work execution of sub-contractor
• Poor site conditions, layout and space
• Impact of weather condition on completion of project
• Lack of readily available utilities on site
• Inappropriate construction processes used
• Impropriate project schedule
• Material and equipment shortage

3.Risk Category: Contractual or Legal Risk

• Incomplete approval and other documents

• Excessive approval procedures in administrative government departments
• Risk due to delay in approval of Detailed project report (DPR)

4.Risk Category: Political Risk

• Local bodies (political/rowdies) compelling to use the resources
• Political instability
• Pressure from any political party
• Corruption and unfamiliarity with local regulations

5.Risk Category: Social Risk

• Land Acquisition
• Labor agitation and strikes
• Local People Agitation and strikes

6.Risk Category: Environmental, Health & Safety (EHS) risk

• Serious Noise pollution at work place

• Dust at work place
• Harmful gases due to construction activities
• Water pollution caused by construction
• Safety of workers
• Poor safety awareness of top management and project managers

7. Risk Category: Force Majeure risks: due to events like

• Natural Disasters
• Riot
• Flood
• Earthquake, etc.

8. Risk Category: Delay Risk

• Delay in getting project documentation from client

• Delay in work execution of sub-contractor
• Delay due to covid pandemic

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• Late changes of design from client side

• Long lead-time items
• Material and equipment shortage

9. Risk Category: Design Risk

• Design variations
• Inadequate and incomplete design
• Lack of appropriate design check
• Late changes of design from client side
• Problems due to inappropriate design
• Project complexity

Based on the Assumption and diagrammatic analysis, Following are the 10

Risks Identified:
o Delay in getting project documentation from client
o Contractors’ poor management ability
o Poor competency of labourer
o Material and equipment shortage
o Late changes of design from client side
o Delay in work execution of sub-contractor
o Delay due to covid pandemic
o Price inflation of construction materials
o Fluctuation in estimated finance than expected
o Serious Noise pollution at work place

Categorization of Risk

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RISK IDENTIFICATION
Risk identification involves analysing the project in hand and understanding the risks that
will be encountered during different stages of the project. Different combinations of the
following three methods were adopted for risk identification:

1. Expert judgement: The opinions of high ranking executives were taken into
consideration for identifying major risks. This can be done via different methods:

i. Surveys: In survey method, data can be gathered by phone or in writing from the
survey group which is known as the ‘reference population’.

ii. Delphi method: This involves drawing upon the group’s expertise by getting
individual submissions without the drawback of face-to-face meetings.

iii. Nominal group technique: This is a face-to-face Delphi method, allowing group
discussion.
2. Documentation review: Past records and available SOPM of the company were
evaluated to ascertain risks.

3. Data analysis by brainstorming: The collected data was analysed by the team to arrive
at a consensus

PROJECT SPECIFIC RISK IDENTIFICATION

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Based on the above-mentioned techniques, different risks were identified for the chosen
project:

I. Market Analysis for Requirement

II. RERA Carpet Area Computation

III. Customisation Requests

IV. Budget Tracking during Project cycle

V. Re-work, Rectification and over billing

VI. Claims & Dispute resolution

VII. Customer Complaints

VIII. WO Conditions & Variation Parameters

IX. Control Over change in contract terms

X. Termination & Blacklisting during project cycle

XI. Site Accidents and damages

RISK RESPONSE AND MITIGATION PLAN

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Risk response is the process of developing strategic options, and determining actions, to
enhance opportunities and reduce threats to the project's objectives. Typically, there are four
risk response methods:

1. Elimination – Here, the risk is almost eliminated. Examples are: Tendering a very
high bid to reduce uncertainties in project cost (and thereby reducing cost overruns),
pre-contract negotiations as to which party takes certain risks.

2. Retention – In this method, the risk responsibility is retained with the original
stakeholder who manages it. Risks that may prove to be more expensive in transfer
may be retained where the losses involved are not significant. There are two retention
methods:

i. Active retention: A deliberate management strategy after a conscious evaluation

of the possible losses and costs of alternative ways of handling risks.

ii. Passive retention: Occurs through negligence, ignorance or absence of decision.

This is highly ineffective.

3. Reduction – This involves continuous effort put into risk mitigation and is hence
related with improvements of a company’s physical, procedural, educational, and
training devices. Risk reduction is done either by reducing the probability or size of
occurrence of loss producing event or its financial implications if it occurs.

4. Transfer – Here, either the activity responsible for the risk or the financial risk is
transferred to another existing or new stakeholder. Following from this definition, risk
transfer has two basic forms:

i. The activity responsible for the risk may be transferred, i.e. hire a subcontractor to
work on a hazardous process where expected risk cost is built in contract price.

ii. The activity may be retained, but the financial risk transferred to insurance.

Once the critical risks are used to formulate the risk response plan, risk monitoring is started
to mitigate the risk, that is, a risk mitigation plan is put in place.

On the basis of impact and probability analysis the top 5 risks identified
are:

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 Material and equipment shortage

 Design variations/ late changes of design from client side
 Contractors’ poor management ability
 Price inflation of construction materials
 Delay due to covid pandemic

Risk Response:
RISK
RESPONS
E
TRANSFE ELIMINA
RETAIN REDUCE
R TE

Risk mitigation and risk review:

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Material and equipment shortage:

• This type of risk generally occurs due to lack of planning.

• This risk can be mitigated by developing a robust construction plan incorporating
rational distribution of material and equipment's throughout the project lifecycle.
• Balance sales planning with operations planning. The best-performing supply chains
in the world use some form of sales and operations planning (S&OP).
• Make good relationship with suppliers in order to procure material in urgent.
• They should map the construction progress all the time to secure sufficient material
and equipment's ready to use.

Design variations/ late changes of design from client side:

 Design variations or change in design generally arises during the design phase
because of the change in mind of the client or misinterpretation by the client. But if it
is late the responsibility should be taken by the clients.
 It affects planning, design, and construction.
 To minimize this defect, the design team should fully understand what the client
wants.
 In order to avoid the change orders or design variation specialized contractors should
be introduced early in the design phase to take into consideration the site conditions
into the design.
 The communication among the designers and the contractors should be good.

Price inflation of construction materials:

 In the construction the price of construction materials is changing because of the

relation between supply and demand and inflation.
 This risk is usually unavoidable, but preventive measures could be taken.
 From the perspective of clients. Client should choose an appropriate type of contract
such as lump-sum to transfer the risk to other parties.
 While the contractor should always avoid using fixed price contracts to bear the risk.
 One good way to deal with potential price variations is to add a contingency premium.

Delay due to covid-19 pandemic:

 This is one risk which we cannot completely vanish. But we can have necessary
precautions to avoid delay such as:

1. Make sure your workplaces are clean and hygienic.

2. Put sanitizing hand rub dispensers in prominent places around the workplace.
3. Make sure these dispensers are regularly refilled.
4. Make sure that staff, contractors and customers have access to places where they can
wash their hands with soap and water.
5. Conduct vaccination drives.

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