What is the risk?

The risk may be defined as an event or situation of exposure to the danger that may derail
the complete plan. The analysis of adverse events at any stage of the project, even during
the designing planning, or programming of construction, is the risk analysis. The risk is
inherently associated with every project, and construction project is no exception. The risks
are always uncertain and affect at least one project objective, such as cost, safety, scope,
quality, or reputation. (Anon., 2021)

Risk Management:
Risk management can be defined as the process of identifying, analyzing, categorizing,
quantifying, and mitigating the threats to any project (Landage, 2016). The risk can be
managed on a construction project if adequately recorded in the risk log and monitored
timely and adjusted the strategy accordingly.

(Williams, 2004)
Risk Analysis
Construction projects are usually very complex and may pose various internal or external
risks. As the risks are filled with uncertainties and sometimes unpredictable and
unprecedented, there is no way to eliminate the risk. Therefore, risk analysis is considered
one of the most crucial processes in achieving the project objectives. To avoid surprises
during the project, risks should be identified and categorized before starting the project,
and the mitigation plan should be prepared accordingly. 
The project risk analysis can be categorized as qualitative and quantitative. The qualitative
risk analysis does not have numerical data to represent, while numerical data can support
quantitative risk analysis. (De Marco, 2014)

The risk associated with the project and their mitigation

Following are the risk associated with the project:

 Financial and economic Risk:  These risks arise due to inflation, funds unavailability,
change in currency rate, change in tax structure and effects of time and cost
overrun. (Anon., 2021)

Mitigation: In our project, the leading cause of financial risk is inflation as, after the
Brexit, the cost of material and labour increases, which can affect the project’s
financial health. However, this risk can be mitigated by a suitable procurement plan
and strategy and timely procurement of material and services.   

 Design or Technical Risks: These risks include everything that restricts achieving the
final product the client wants; This may consist of unavailability of material or
resources, incomplete site investigation or design. Design risks arise due to change
of project scope, design errors or change and changes in requirements by the
client. (Anon., 2013)

Mitigation: The risk can be mitigated by maintaining the design register and design
management plan. In addition, clear communication with the client regarding the
updates on design and sign off on all the designs from the client should be
mandatory.
  Logistic Risks: This risk may be considered linked with global supply chain
management; this includes the availability of construction equipment (spare parts),
material labour and fuel. The projects are at massive risk of delay and cost overrun if
logistics are not appropriately addressed. (Anon., 2021)

Mitigation: The proper logistic plan plays a vital role in the mitigation of logistic risks.
During the Covid-19 pandemic, the supply chain was severely impacted throughout
the world, especially the equipment and material imported from different parts of the
world. Post-Brexit and due to the pandemic, the labour shortage is one of the prime
concerns in the UK. This risk could be mitigated by timely procurement of material,
machinery, and services.

 Physical Risk: This risk mainly covers the risks associated with health and safety,
unsafe working conditions, wastage, theft, unfavourable weather condition
(Extremely hot or cold condition or heavy rainfall), and availability of the material in
terms of adequate quantity and accepted quality.
 
Mitigation: The risk can be mitigated by preparing and implementing good health and
safety plans. Consider the climatic conditions while preparing the logistic plan.
Though the risk associated with unsafe working conditions, wastage and theft can be
minimized by proper monitoring and implementing strict security on site. 

 Contractual risk: Incomplete due diligence, change/variation in scope of works,

impractical schedule, unachievable terms and conditions in contract and payment
problems comprise the contractual risks. (Anon., 2021) 

Mitigation: The contractual risks are unavoidable in the construction phase. These
risks must be mapped and mitigated in the pre-construction phase, especially while
preparing the agreement and the contract. There must not be any discrepancy
between the client’s expectations and the contractor’s understanding. The schedule
must be realistic and achievable, and if there are delays, it must be communicated
and recorded with the client. There must be a practical and approved (Approved by
the client) change management plan to avoid any dispute in case of any change or
variation. 
 
 Socio-Political and Legal Risk: The risks due to shift of political power, change in laws
and regulation, the requirement of permits and licenses, change in global rules like
imports and exports are considered political and legal risks. The political risks
increases if the site area is politically motivated. 

Mitigation: The change of government might always be considered a risk; this might
be because of a change in laws and regulations, but it is the most unlikely event, and
the severity of the risk is usually very low. Though the labour union sometimes may
pose a high risk to the project, it could be avoided by strictly following the labour
laws and engaging more local labours. 

 Management or Organizational risks: Organizational risk is one of the most critical

risks that must be addressed timely in including team selection, resource allocation,
pre-defined procedures and processes, inadequate corrective measures, wrong
decisions by leadership, no or improper project manual and poor-quality control.
(Anon., 2013)

Mitigation: If some tasks are assigned to an incompetent team member, the chances
of error increase, which may hamper the complete project; therefore, the job
assigned to the right team member is key to a successful project. As far as the
project manual is concerned, this risk can be minimized by a project manual that
includes all the necessary pre-defined procedures and processes. It always reduces
the probability of errors and missing out on something that may affect the project.
Therefore, the corrective measure and the decisions taken at the organizational level
are always most important.  
 
 
 Environmental or Act of the God: The environmental risks consist of events like
floods, earthquakes, volcanic eruptions, pandemics, epidemics, or damage due to
any natural disaster. Human beings cannot control these events; that’s why these
are also known as the act of God. 
 
Mitigation: However, we cannot control the risk associated with acts of God, but the
disaster management plan can minimize the damage. The disaster management plan
 must have a standard operating procedure in case of natural calamities. Usually, the
cost impact due to act of the God is covered by the client, but it must be there in
agreement or contract.

Bibliography
Anon., 2013. Scientific & Academic Publishing. [Online]

Available at: http://article.sapub.org/10.5923.j.ijcem.20130205.02.html

[Accessed 29 November 2021].

Anon., 2021. Type of risk in construction project. [Online]

Available at: https://www.constructionplacements.com/types-of-risks-in-construction-projects/

[Accessed 21 November 2021].

De Marco, A. a. M. J. T., 2014. Risk Analysis in Construction Projects. American Journal of applied
sciences 11, Volume 1, pp. 74-84.

Landage, A., 2016. Risk management in construction industry. International journal of engineering
research, pp. 10-25.

Williams, B. C. &. P., 2004. Construction Planning, Programming and Control. Oxford: Blackwell
Publishing.