Risk Management in Road Construction Projects: High Volume Roads

Abstract

Road construction projects carry a significant amount of risk due to its spread over a wide geographical area and threat from underground conditions. Risk can be defined as an event of known uncertainty and this uncertainty is measured in terms of its probability of occurrence. Risk has significant effect on any one of the aspects of a project namely cost, time or scope of the project. Understanding risks in the early stages of a project will help project managers to reduce its impacts and complete the project in an improved and more efficient manner. This can be achieved through proper Risk Management. The process of Risk Management comprises of identification, analysis and application of methods to reduce the identified risk. Along with identification and analysis, it is also necessary to allocate the risk properly to the respective contracting parties such as owners, consultants, contractors etc., so that risk handling decisions can be taken properly with authorization and without any disputes. This study focuses on management of risk in road construction projects. The roads are categorized as “High-volume roads” and “Low-volume roads” and analysis is carried out for High-volume roads roads. Identification of risk factors is done through a questionnaire survey and assessment of risk is done considering both the probability of the occurrence of risk and impact of the risk factor using 5 point likert scale for high volume and low volume roads. From the two parameters ‘risk priority’ is calculated by multiplying the RII values of both the parameters and the risks are ranked according to the RII values of the ‘risk priority’. Further allocation of the risk is also done through the questionnaire according to the responses of the respondents for each risk factor. The allocation is done towards the owner, consultant, contractor or the risk is shared between them. This study would help project managers to better estimate risks prior to the commencement of a project and allows them to develop proper mitigation measures at an early stage of a project.