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Risk Analysis in Residential Construction Project in Pune: Analytical Essay

Abstract

Risks have a definite impact on a construction project’s performance in terms of cost, time, and quality. Construction industry is highly risk prone, with complex and dynamic project environments where an atmosphere of high uncertainty and risk are always gets create. Management of risks in construction projects has been recognized as a very important management process in order to achieve the project objectives in terms of time, cost, quality and scope. This research focuses on residential projects in Pune, Maharashtra. The aim of this research is to find the critical factors that affect the projects. It involves the use of software like Microsoft Excel and questionnaire for interview with Site Manager or Engineer. This research represents the factors with Probability and/or Impact on any project.

Introduction

Risk is defined as any action or occurrence which will affect the achievement of project objectives. As every construction project is different, each offers a multitude of varying risks. As the size and complexity of the projects increased, the ability to manage risks throughout the construction process has become a central element preventing unwanted consequences. Risk is an integral component of any project. The occurrence of risk has a degree of obscurity and can either be positive or negative. A positive risk is a convenient opportunity and have low impact, while a negative risk is a threat and hence inconvenient and have high impact. The more convenient and less convenient risks show progressive and negative outcomes respectively. Risk is present in all projects irrespective of their size or sector. No project is totally free from risks. If risks are not properly analyzed and strategies are not trained to deal with them, the project is likely to lead to failures. To ensure the success of a project, a contractor starting on a construction project must be able to recognize and assess those risks. This research aims to identify those risks from which the Risk Management can be done to deal with the risks.

Objective

  1. To find those risks which are involved in the residential construction projects.
  2. To analyze the impact of these risks with respect to cost and duration of the project.

Literature Review

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  1. Risk Assessment in Residential Construction Projects by SPSS. The authors of this research paper are - Patel Ankit Mahendra, Prof. Jayeshkumar Pitroda, Prof. Jaydevbhai J. Bhavsar. The main objective of their study is to identify and control the possible future risk proactively rather being reactive and spread awareness regarding risk management in the construction industry.
  2. Risk Management in Infrastructure Projects in India. The authors of this research paper are - Chaitali S. Pawar, Suman S. Jain, Jalinder R. Patil. This paper deals with the risk management in construction contract and aims to identify the key problems in critical areas of construction project, which have the potential to become major roadblocks in the progress of the project. They take a case study Flyover in Pune city of Maharashtra state, India, has been referred. The study done the identification and classification of various risks in a given set of contract documents of construction project, and on basis of qualitative risk analysis, suggests methods to mitigate risks in construction projects.
  3. Risk Management in Construction Industry- The author of this research paper are-Krantikumar Mhetre, B.A.Konnur, Amarsinh B. Landage. This research paper covers the concepts of risk management and various risk analysis techniques to be used for the one stop solution for all types of hazards most likely to occur during any construction project lifecycle.

Methodology

The research begins with the identification of the factors of risk analysis from which the questionnaire prepared. This questionnaire interview with the project personnel on the basis of their probability and impact. For this, two sites have been reviewed for data collection- Solitaire Project, Kondwa, and Godrej Elements, Hinjewadi. From the questionnaire, data collected from their experience. After that data were analyzed.

Table 1.1 show Risks involved in the Construction Industry

Technical Risk

Logistical Risk

Inadequate Site Investigation

Insufficiency of Transportation Facility

Incomplete Design

Insufficiency of Equipment Availability

Inappropriate Specification

Non-availability of Operators

Uncertainty of Material Availability

Non-availability of Maintenance Facility

Management Related Risk

Environmental Risk

Unstable Management

Natural Disaster

Uncertain Productivity

Weather Implication

Problematic Industrial Relation

Financial Risk

Socio-Political Risk

Fluctuation in Foreign Exchange

Customs & Imports Restriction

Payment Delays

Constraints on Availability of Expatriate Staff

Inflation

Constraints on Employment of Expatriate Staff

Local Taxes

Insistence on Use of Local Firms & Agents

Common Source of Risk

Safety Risk

Design Errors

Slips, Trips and Falls

Design Omissions

Construction Machinery

Change in Project Scope

Electricity

Change in Project Requirement

Instability

Inadequacy in Roles of Staff

Inadequacy in Responsibilities of Staff

Other

Insufficiency of Skilled Staff

Compressed Time Schedule

Inadequacy of Contractor Experience

Large Team Size

Unfamiliarity with Local Conditions

History

Unavoidable Accident

Complexity

The data were collected from the projects mentioned in the methodology. The data were taken as feedback from the project personnel from their work experience.

Result

  1. With the help of the questionnaire given to the project personnel, it shows that inadequate site investigation is the risk which can have high impact on the project cost and duration as it is difficult to know the strata below the ground surface and cannot predict from observing above the ground.
  2. Insufficiency of Transport facility is also the risk which have impact on the project duration as it affects the supply of materials on time due to problem by vehicle operator as facing problem of heavy traffic and road problems like potholes, alligator track, etc.
  3. Unstable Management risk can be there on site and in office also because of no proper communication with the Departments and Contractors. Miscommunication can lead to conflicts and cause delays in the project.
  4. Project personnel also face inflation risk because the rate and cost can change due to change in contractors/suppliers margins. When construction volume increases rapidly, margins increase rapidly and it can lead to cost overrun in the project.

Conclusion

From the data collected from project personnel of the projects, major risk for them is the inadequate site investigation which have impact on the project cost and duration. Unstable management is the minor risk which occurs rarely in the projects.

Future Scope

From the results and conclusion, the Client/Contractor can be aware about this risks and efficient risk management can be done by them to minimize the impact of these risks in the project.

References

  1. Chaitali S. Pawar, Suman S. Jain, Jalinder R. Patil; “Risk Management in Infrastructure Projects in India”; International Journal of Innovative Research in Advanced Engineering (IJIRAE) ISSN: 2349-2163 Issue 4, Volume 2 (April 2015)
  2. Krantikumar Mhetre, B.A.Konnur, Amarsinh B. Landage; “Risk Management in Construction Industry”; International Journal of Engineering Research Volume No.5, Issue Special 1 pp: 153-155
  3. Ekaterina Osipova; “Risk management in construction projects: a comparative study of the different procurement options in Sweden”; ISSN: 1402 -1757
  4. Patel Ankit Mahendra, Prof. Jayeshkumar Pitroda, Prof. Jaydevbhai J. Bhavsar; “Risk Assessment in Residential Construction Projects by SPSS; “International Journal of Engineering Science & Research Technology (IJESRT)” ISSN: 2277-9655

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