1

EXECUTIVE SUMMARY

Tunnel construction is increasing worldwide. Although the majority of tunnel

construction projects have been completed safely, there have been several incidents
that have resulted in delays, cost overruns, and sometimes more significant
consequences such as injury and loss of life. To help eliminate these accidents, it is
necessary to systematically assess and manage the risks associated with tunnel
construction. Tunnel projects are prone to escalations of construction costs and
duration. On an average, final construction costs of tunnel and bridge construction
projects are 34% above original estimates, and there has been no improvement over
the past seventy years. New techniques, which would improve the accuracy of these
estimates and which would enable a systematic learning from past projects, are
therefore needed.

This thesis report describes project scheduling, the various project scheduling
techniques in use and its need. Construction delays, the way they are categorized
including the effects of each type of delay and explains various delay analysis
methods. Various construction risks, their causes, their types, their effects and their
mitigation measures have been cited. Risk management strategy has been explained
with emphasis at each phase including a few risk analysis methods. A tunnel project
in Pir Panjal has been taken for the purpose of study and the risks involved in the
tunnelling project are identified. Risk analysis has been performed using the RFMEA
technique of risk analysis for the project.

This study gives the information about the practical problems involved in the
construction projects due to delays and further the risks associated with them. It has
been observed that all risks in a construction project might be schedule risks because
they are related to the schedule directly or indirectly. Hence the prerogative lies in
timely identification of those factors that lead to these delays, prioritizing them and
managing them efficiently.
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TABLE OF CONTENTS

EXECUTIVE SUMMARY

1. Introduction…………………………………………………………………04

2. Literature Survey…………….…...……………………………………...…07

2.1 Project Scheduling.…………………………………………………….07

2.2 Construction Delays……………………………………………………10

2.3 Construction Project Risks and Uncertainties………….....………….20

3. Case Study: Tunnel Project………………………………………………...51

3.1 Risk Management for Tunnel Project………………………………...54

4. Conclusion…………………………………………………………………...73

ANNEXURE

REFERENCES
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LIST OF FIGURES AND TABLES

FIGURES

2.1 Types Of Delay……………………………………………………………..11

2.2 RFMEA Flowchart……………………………………….………………...36

3.1 Tunneling Methods………………………………………………………...53

3.2 Tunnel Section………………………………………………………...........57

3.3 RPN Of All Identified Risks……………………………………………….65

3.4 RS Of All Identified Risks…………………………………………………66

3.5 Scatter Diagram For All Identified Risks……………………..…….……66

3.6 RPN Of Schedule Risks…………………………………………..………...67

3.7 RS Of Schedule Risks……………………………………………..………..67

3.8 Scatter Diagram Of Schedule Risks………………………………............68

TABLES

3.1 Identified Risks…..…………………………………………………………59

3.2 Calculations……..……………………………………………......................63

3.3 RPN and RS Calculated……..………………………………......................64

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CHAPTER 1

INTRODUCTION

The Indian construction sector has acted as an engine of growth for the Indian
economy for over the past five-decades and becoming a basic input for the socio-
economic development of the country. Construction is the second largest economic
activity after agriculture, and has contributed around 6 to 9% of India's GDP over the
past five years while registering 8 to 10% growth per annum.

Construction projects are complex in nature and have many inherent uncertainties
due to the effect of weather, productivity, design, scope, site conditions, soil
properties, material delivery time, equipment efficiency etc. Schedule delays in
construction projects are common and affect total project duration in unpredictable
ways. These uncertainties are not only from the unique nature of the project but also
from the diversity of resources and activities. In addition, external factors have a very
significant effect on the outcome of a project. Broadly, these risks can affect the two
basic factors against which the success of a project is usually measured-the schedule
and the budget. Without a well planed project schedule, it is difficult to coordinate all
the diverse activities involved in the project and may lead to huge cost over runs.

In addition to assigning dates to project activities, project scheduling is intended

to match the resources of equipment, materials and labour with project work tasks
over time. Good scheduling can eliminate problems due to production bottlenecks,
facilitate the timely procurement of necessary materials, and otherwise insure the
completion of a project as soon as possible. In contrast, poor scheduling can result in
considerable waste as labourers and equipment wait for the availability of needed
resources or the completion of preceding tasks. Delays in the completion of an entire
project due to poor scheduling can also create havoc for owners who are eager to start
using the constructed facilities.
 5

Project management techniques are widely used to plan, execute, control and
deliver construction projects. The goals of a successful project management
endeavour are to finish on time, within budget and according to the specifications and
the quality standards. The ultimate benefit of implementing project management
techniques is a satisfied customer. With higher requirements of quality, increasing
demand for shorter project completion times and more efficient use of available
budgets, project management professionals are facing the necessity of using analytical
and quantitative tools that are more sophisticated than traditional qualitative
approaches. Management of risks and uncertainties in construction projects delays is
only possible if risks have been identified and the potential impacts have been
analysed.

All risks in a construction project might be schedule risks because they are related
to the schedule directly or indirectly. Capturing uncertainty in projects needs to
address ambiguity, imprecision and inaccuracy and analyse the potential impacts of
the risks involved. This study would help in addressing some important practical
problems, such as:

 Scheduling in the face of uncertain estimates on activity durations,

 Scheduling in unstructured or poorly formulated circumstances.

The objective of this study is to clearly understand the various reasons why the
projects undertaken in the construction industry are most often faced with delays
which in turn lead to huge cost over runs and to identify and analyse the risks that are
generated through these delays.

The methodology adopted involves a thorough literature survey covering the areas
of risk management and delay analysis followed by a case study of the risks involved
in tunnel projects undertaken in India. The case has been studied in detail and the
risks due to delays identified, analysed and mitigation measures suggested in the
process.

This thesis gives an insight into the practical problems involved in construction
projects such as the factors that currently delay the efficient, productive, timely and
 6

cost-effective completion of construction projects. Effort has been made to identify

the various sources of uncertainty , understand their origins and studied how to
manage them and to deal with desirable or undesirable implications by using the
principles of risk management to suit the delays involved in the Indian construction
scenario.

The Chapter1 gives a brief insight into the history of this thesis. Chapter 2
involves the literature survey covering the areas of project scheduling, project delays
in the construction industry and risk management. Chapter 3 gives a detailed case
study of a tunnel project and the methodology adopted to manage the risks involved.
Chapter 4 covers the summary and conclusion of the work done and Chapter 5 and 6
lists the Appendices and Bibliography.
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CHAPTER 2

LITERATURE SURVEY

2.1 PROJECT SCHEDULING

A project schedule is a written or graphical representation of the contractors

plan for completing a construction project that emphasizes the elements of time and
sequence. The plan will typically identify the major work items (activities) and depict
the sequence (logic) in which these work items will be constructed to complete the
project. The project schedule should include every element of the project sequenced
in a logical order from the beginning of the project through completion. The schedule
should also define specific time periods for each and every activity in the project. The
sequencing and summation of the individual time elements will define the overall
project duration. The level of detail shown in a construction schedule will vary
depending on a number of different factors. Those factors include the type of schedule
used, the contract requirements, the nature of the work, the contractor’s practices and
so on.

2.1.1 PURPOSE OF A PROJECT SCHEDULE

The project schedule is an estimate of the time required to construct the

project, just as a bid which is an estimate of the costs required for the project. A
project schedule is a valuable project control tool that is used by the project managers
to effectively manage construction projects. If a project schedule is properly
developed and updated throughout the duration of the project, then it will provide
periodic snapshots of the plan to complete the project, as it may change overtime. If
this tool is used properly, it will depict the actual construction plan to the project
participants; allow the management to control and measure the pace of the work that
provides them the required information to take necessary and timely decisions.
 8

Project schedules should be used to identify and measure the delays because
they are the essential snapshots of the project’s status at specific moments in time.
The schedule updates identify what work has been done and also the changes made to
the construction plan.

Scheduling is an iterative process through which duration estimates &

resource estimates are reviewed & revised to create an approved project schedule that
can serve as a baseline against which progress can be tracked.

The inputs to a schedule are:

 Project Scope Statement including the activity start or finish dates and the
project stakeholders
 Activity List
 Project Schedule Network Diagrams
 Activity Resource Requirements
 Resource Calendars
 Activity Duration Estimates
 Project Management Plan
 Progress reports

The major aspects that are addressed through the scheduling are:

 Baseline Schedule: The schedule approved by the management becomes your

baseline for the remainder of the project. Project progress and task completion
will be monitored and tracked against this original plan to determine if the
project is on course as planned
 Resource Requirements: They are an important part of the scheduling process
that is addressed while scheduling and it also has a major impact on the
schedule.
 Activity Attributes: such as the linkages between the activities etc are
incorporated
 9

 Project Calendars : the calendar followed by the project including the non-
working days, half working days and nonworking days are all included in the
schedule so as to get a real image of the project progress.
 Periodic Changes: as per the changes that are incurred as the project
progresses the changes are also taken into account when the scheduling is
done.

2.1.2 PROJECT SCHEDULING TECHNIQUES

 Critical Path Method: It determines the amount of float or schedule

flexibility for each of the network paths by calculating the earliest start &
finishes date and latest start & finishes date for each activity without regard to
resource availability.

 Program Evaluation and Review Technique (PERT): It forecasts the

project schedule with a high degree of reliability by using expected value.
Expected value is calculated using three time estimates for activity duration
instead of one and then finding the weighted average of the three time
estimates

 Schedule Compression is a technique which shortens the project schedule

without changing the project scope, to meet schedule constraints, imposed
dates or other schedule objectives. It includes:
 Crashing: It is a compression technique which tries to gain the greatest
amount of schedule compression with the least amount of cost.
 Fast Tracking: It is starting two tasks at the same time that were
previously scheduled to start sequentially. Fast tracking can increase
project risk and might cause the project team to have to rework tasks.
 10

 What-If Scenario Analysis: uses different sets of activity assumptions to

produce multiple project durations. It weighs the “what” questions and their
assumptions & determines the feasibility of project schedule under these
conditions. Monte Carlo Analysis is a simulation technique that produces a
range of values for each activity with multiple duration possibilities.
Probability durations are then chosen for each activity simulated many times
to come up with the schedule projections and their probability, critical path
duration estimates, and float time.

 Resource Levelling and Smoothing: is used when resources are limited or

time. It attempts to level out the resource assignments to get tasks completed
without overloading the individual while trying to keep the project on
schedule. It can cause the original critical path to change

 Critical Chain Method: is technique that accounts for limited or restricted

resources when modifying the project schedule. It uses both deterministic
(step by step) & probabilistic approaches. The critical path will change after
entering the resource availability.

2.2 CONSTRUCTION DELAYS

Delay can be defined as time overrun or extension of time to complete the

project. Construction delay is something that cannot be avoided. Therefore delay is a
situation when the actual progress of a construction project is slower than the planned
schedule leading to the late completion of the projects.

2.2.1 CLASSIFICATION OF CONSTRUCTION DELAYS

On construction projects where scheduling is being used to plan the work, it is

not uncommon for delays to occur. It is what is being delayed that determines whether
 11

a project or a milestone is will be completed late. Thus to understand them

construction delays can be broadly classified as shown below.

Fig: 2.1 Types of Delay

 EXCUSABLE DELAY

An excusable delay, in general, is a delay that is due to an unforeseeable event

beyond the contractor’s or the subcontractor’s control. Normally based on common
general provisions in public agency specifications, delays resulting from the following
events would be considered excusable.

o Non-Compensable (Caused by third parties, act of God)

 Fire
 Flood
 Wind damage
 12

 Snow
 Suspensions
 Transportation delays
 Contract modifications
 Labour dispute and strike
 Intervention by outside agencies (such as the NGO’s)
 Differing site conditions or concealed conditions
 Lack of action by government bodies , such as building inspections or
approvals

These conditions may be reasonably unforeseeable and not within the contractor’s
control. Decisions concerning delays must be made within the context of the specific
contract. The contract should clearly define the factors that are considered valid
delays to the projects that justify time extensions to the contract completion time.

o Compensable (Caused by owner/ consultant)

A compensable delay is a delay where the contractor is entitled to a time extension

and to additional compensation. The following are some of the examples to
compensable delays:

 Delay to furnish and deliver the site to the contractor. Change orders by owner
during construction.
 Late in revising and approving design documents by owner.
 Delay in approving shop drawings and sample materials.
 Poor communication and co-ordination between parties.
 Slowness in decision making process.
 Conflicts between joint ownership of the project.
 Unavailability of incentives for contractor for finishing ahead of schedule.
 Suspension of work.
 Inflexibility of consultant.
 Late in reviewing and approving design documents by consultant.
 Conflicts between consultant and design engineer.
 13

 Inadequate experience of consultant.

 Financial problems.
 Contract modifications.
 Lack of co-ordination with contractor.
 Lack of working knowledge.
 Supervision too late and slowness in making decisions.
 Slow to give instructions.
 Lack of consultant’s experience.
 Incomplete documents.
 Lack of consultant’s site staff experience.
 Absence of consultant’s site staff.

 NON EXCUSABLE DELAY

Non-excusable delays are events that are within the contractor’s

control or that are foreseeable. These are some examples of non-excusable delays:

o Caused by Contractor
 Difficulties in financing project by contractor.
 Conflicts in sub-contractors schedule in execution of project.
 Rework due to errors in construction.
 Conflicts between contractor and other parties.
 Poor site management and supervision by contractor.
 Poor communication and co-ordination by contractor with other parties.
 Improper construction methods implemented by the contractor.
 Delays in sub-contractors work.
 Frequent change of subcontractors because of their inefficient work.
 Poor qualification of the contractor’s technical staff.
 Inadequate planning and scheduling.
 Underestimation of productivity.
 Staffing problems.
 Lack of co-ordination on site.
 Scheduling mismanagement.
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 Inadequate review.
 Lack of high technology.
 Poor managerial skills.
 Inspections.
 Material / fabrication delays.
 Material procurement.

Again the contract is the controlling document that determines if a

delay would be considered non excusable. The owner or the client while framing the
contract specifications must be sure that the contract documents are clear and
unambiguous. Similarly, before signing the contract the contractor should fully
understand what the contract defines as excusable and non excusable delays.

 CONCURRENT DELAYS

Concurrent delays are separate delays to the critical path that occur at the same
time. The concurrency argument is not only from the standpoint of determining the
projects critical delays but also from the standpoint of assigning responsibility of
damages associated with delays to the critical path. Owners will always cite
concurrent delays by the contractor as a reason for issuing a time extension without
additional compensation. Contractors will often cite concurrent delays by the owner
as a reason why liquidated damages should not be assessed for its delays. In some
jurisdictions the occurrence of concurrent excusable and non excusable delays result
in the contractor receiving a time extension but no additional compensation

2.2.2 CAUSES OF CONSTRUCTION DELAYS

 Project
 Original contract duration is too short
 Legal disputes between various parties
 Inadequate definition of substantial completion
 Ineffective delay penalties
 15

 Type of construction contract (Turnkey, construction only)

 Type of project bidding and award (negotiation, lowest bidder)
 Owner
 Delay in progress payments by owner
 Delay to furnish and deliver the site to the contractor by the owner
 Change orders by owner during construction
 Late in revising and approving design documents by owner
 Delay in approving shop drawings and sample materials
 Poor communication and coordination by owner and other parties
 Slowness in decision making process by owner
 Conflicts between joint-ownership of the project
 Unavailability of incentives for contractor for finishing ahead of schedule
 Suspension of work by owner
 Contractor
 Difficulties in financing project by contractor
 Conflicts in sub-contractors schedule in execution of project
 Rework due to errors during construction
 Conflicts between contractor and other parties (consultant and owner)
 Poor site management and supervision by contractor
 Poor communication and coordination by contractor with other parties
 Ineffective planning and scheduling of project by contractor
 Improper construction methods and implemented by contractor.
 Delays in sub-contractors work
 Inadequate contractor s work
 Frequent change of sub-contractors because of their inefficient work
 Poor qualification of the contractor s technical staff
 Delay in site mobilization
 Consultant
 Delay in performing inspection and testing by consultant
 Delay in approving major changes in the scope of work by consultant
 Inflexibility (rigidity) of consultant
 Poor communication/coordination between consultant and other parties
 16

 Late in reviewing and approving design documents by consultant

 Conflicts between consultant and design engineer
 Inadequate experience of consultant
 Design
 Mistakes and discrepancies in design documents
 Delays in producing design documents
 Unclear and inadequate details in drawings
 Complexity of project design
 Insufficient data collection and survey before design
 Misunderstanding of owner s requirements by design engineer
 Inadequate design-team experience
 Un-use of advanced engineering design software
 Materials
 Shortage of construction materials in market
 Changes in material types and specifications during construction
 Delay in material delivery
 Damage of sorted material while they are needed urgently
 Delay in manufacturing special building materials
 Late procurement of materials
 Late in selection of finishing materials due to availability of many types in
market
 Equipments
 Equipment breakdowns
 Shortage of equipment
 Low level of equipment-operator s skill
 Low productivity and efficiency of equipment
 Lack of high-technology mechanical equipment
 Labour
 Shortage of labour
 Unqualified workforce
 Nationality of labour
 Low productivity level of labour
 17

 Personal conflicts among labour

 External
 Effects of subsurface conditions (e.g., soil, high water table, etc.)
 Delay in obtaining permits from municipality
 Hot weather effect on construction activities
 Rain effect on construction activities
 Unavailability of utilities in site (such as, water, electricity, telephone, etc.)
 Effect of social and cultural factors
 Traffic control and restriction at job site
 Accident during construction
 Differing site (ground) conditions
 Changes in government regulations and laws
 Delay in providing services from utilities (such as water, electricity)
 Delay in performing final inspection and certification by a third party

2.2.3 EFFECTS OF DELAYS

 Time overrun
Client-related and contractor-related factors have impact on the time overrun. Out
of the important causes of delay discussed earlier, most of the causes belong to client
related and contractor-related factors. Factors such as inadequate planning by the
contractors, improper site management by the contractors, inadequate project
handling experience of contractors, and delay in the payments for the work completed
directly affect the completion of the project and cause time overrun.

 Cost overrun
Contract-related factors such as change orders (changes in the deliverables and
requirements) and discrepancies in the contract document result in cost overrun.
Mistakes and discrepancies in the contract document can be in scope, deliverables,
 18

resources available and allocated, payment terms, achievement of various milestones,

and the project duration. In most of the instances, time overrun leads to cost overrun.

 Disputes
Client-related, contract-related, contract relationship related, and external factors
have impact on the disputes that arise during the course of the project. Factors such as
delay in the payments for completed work, frequent owner interference, changing
requirements, lack of communication between the various parties, problems with
neighbours, and unforeseen site conditions give rise to disputes between the various
parties. The disputes, if not resolved amicably, can lead to arbitration or litigation or
may even contribute to the total abandonment of the project.

2.2.4 DELAY ANALYSIS METHODS

Delays occur commonly in construction projects The selection of the proper

analysis method depends upon information available, time of analysis, capabilities of
the methodology used, time, funds available and effort allocated to the analysis. There
are four methods often mentioned in the construction literature that are professionally
acceptable.

They include

(1) The as-planned vs. as-built schedule analysis method,

(2) The impact as-planned schedule analysis method,

(3) The collapsed as-built schedule analysis method, and

(4) The time impact analysis method.

 The As-planned vs. As-built schedule analysis method

The as-planned vs. as-built method is the observation of the difference

between an as-planned schedule and an as built schedule. The method identifies the
as-built critical activities, compares these activities with the activities on the as-
 19

planned schedule, assesses the impact of delays on the project, identifies the
sequences which actually define the duration of the project, and determines the
causation and responsibility of delays that impact project completion

 The Impact As-Planned Schedule Analysis Method

This method uses only an as-planned or baseline schedule for delay analysis. It is
based on the theory that the earliest date by which a project is completed can be
determined by adding the delays into the as-planned schedule. New activities that
represent delays, disruptions, and suspensions are added to the as-planned schedule
and are used to demonstrate the reason why the project was completed later than
planned. Contractors who submit claims that involve a time extension, add only
owner caused delays to the as-planned schedule in the appropriate sequence to
document the total project delay caused by the owner

 The Collapsed As-Built Method

This is also referred to as the ‘‘but-for’’ schedule method. This analysis is popular
in claim presentations because it is easily understood by triers of fact .SCL defines it
as a method where the effects of delays are ‘‘subtracted’’ from an as-built schedule to
determine what would have occurred but for those events .This approach is a method
of choice when a contractor lacks an acceptable schedule during the project, or when
no as-planned schedule was required in the contract.

 The Time Impact Method

This method relies on the assumption that delay impacts to a project can be
assessed by running a series of analyses on schedule updates. Time impact analysis is
a procedure that uses CPM principles. It assesses delays_ effects on the project
schedule by analyzing the schedule periodically, generally on a day-by-day basis
.Window analysis, a variation of time impact analysis, uses weekly or monthly
updates to perform the analysis. Delay events are inserted into the schedule and delay
impacts are accumulated every time the schedule is recalculated.
 20

2.2.5 REMEDIAL MEASURES

 For time/cost over run
 Absorbing the delays through extension of time with the mutual consent of
the parties is one of the best remedial measure and also an alternative to
the dispute resolution methods.
 Modification of the project plan in such a way that it is capable of
absorbing the delay occurred so far.
 Mediation and conciliation among the two parties in order to avoid further
disputes.
 For disputes
 Arbitration: Client-related and contract relationship-related factors
escalate disputes to be settled by arbitration process. A competent third-
party can settle the disputes amicably without going to the court.

 Litigation: Client-related, labour-related, contract-related, contract

relationship related, and external factors escalate disputes to be settled by
the litigation process. The parties involved in the projects use litigation as
a last resort to settle disputes.

2.3 CONSTRUCTION PROJECT RISKS AND UNCERTAINTIES

Construction projects are characterized as very complex, always unique

projects, where risks raise from a number of different sources. These projects are
characterized by a continuous decision making due to numerous sources of risk and
uncertainty, many of which are not under the direct control of project participants.
Construction projects have a bad reputation of failing to meet the deadlines and cost
targets therefore identifying risk sources is extremely important.
Although, risks can be predicted at the very early phases of the project (during
appraisal and planning) the impacts are not experienced until the construction and
execution phase starts. Complexity in construction projects comes from two basic
 21

sources; interdependence of tasks and uncertainty. Uncertainty has four sources:

management is unfamiliar with local resources and local environment, lack of
complete specifications for activities at the construction site, lack of uniformity of
materials, work, and teams with regard to time and place and unpredictability of
environment. Uncertainty in the project, i.e. work that needs to be done, the cost, the
time, the quality needs, communications needs, etc. Uncertainty is a lack of
knowledge about an event that reduces confidence in conclusion drawn from the data.
The investigation of uncertainties may help to identify risks.

2.3.1 RISK DEFINED

Risk is an abstract term. In a given situation, risk is viewed differently by

different people. To some it may pose a hazard, danger or threat, while others may see
it as an opportunity. Risk generally signifies an uncertain event, situation or condition
which may occur. It may have either a positive or negative effect on the project
objectives. Some risks may pose a threat to the achievement of project objectives
while some other risks may enhance achievement of objectives. Favourable risk
events are called opportunities, whereas unfavourable risks are termed as threats.
Factors that induce unfavourable risky situations are called hazards. Risk increases
with hazards but decreases with safeguards.

A risk has three components:

o A situation leading to an event, the occurrence of which is likely to deviate

from the estimated or forecast value
o The probability of occurrence of that event
o The likely impact of that event, i.e. loss or gain

2.3.2 TYPES OF CONSTRUCTION RISK

Construction risk can be classified in many ways.

 22

Based on the level of uncertainty it can be classified as:-

 Known risks: those that have been identified, analyzed, & planned.
 Unknown risks: those that cannot be managed proactively.

Based on the outcome it may be classified as:-

 Bad risks: are those that pose a threat to the project.

 Good risk : are those that may present an opportunity to the project

Based on the effect the risk has on the project it may be classified as:-

 Schedule risk
 Cost risk
 Quality risk
 Environmental risk
 Safety risk

 Schedule risk
 Delay in the completion of activity due to delay in payment by client,
use of inefficient and conventional technologies, non –availability of
resources, customs and import restrictions, industrial relations
problems, delay in approvals from regulatory bodies, strikes and
unstable government policies which can lead to a delay in the overall
project completion.
 Weather and seasonal implications such as earthquake, flood, landslide,
hurricane etc are some other risks that are beyond human control.
 Cost risk
 Inflation, which leads to the final cost of project exceeding the initially
estimated value.
 Accident during construction due to ignorance of the HSE policies and
standards.
 23

 Fluctuation in foreign exchange, change in the local tax system, change

in economic parameters
 Fine or compensation due to change in the scope of work or in the form
of liquidated damages.
 Quality risk
 Rework due to incomplete or misinterpretation of
drawings/specifications, lack of proper communication, inadequate site
investigation or human error.
 Insistence on use of local firms and agents, constraints on
the availability technically sound staff
 Low customer satisfaction.
 Loss of venture or partnership due to non performance of either party.
 Environmental Risk
 Damage to natural resources
 Damage to surrounding environment
 Depletion of hydrocarbon resources
 Damage to ecology and wildlife
 Safety Risk
 Due handling of chemicals or hazardous materials
 Unsafe working conditions
 Site unsafe for sorting of materials

2.3.3 CAUSES OF RISK IN DIFFERENT STAGES OF THE PROJECT

Some significant causes of delays may be: owner interference, inadequate

contractor experience, financing and payments, slow decision making, improper
planning and subcontractors. Thus in order to have a successful project, we must be
aware of all the risks involved.

 Appraisal Stage
 Local taxes
 Change in economic parameters
 24

 Unrealistic SWOT analysis

 Fluctuation in foreign exchange

 Planning Stage
 Incomplete design.
 Inadequate site investigation
 Incomplete or misinterpreted specifications
 Delay in payment as against the initial plan
 Delays in approvals from regulatory bodies
 Industrial relations problems with vendors

 Execution Stage

 Inefficient communication
 Inefficient and conventional technologies
 Non-availability of resources - particularly construction equipments, spare
parts, fuel and labour.
 Non-availability of sufficient transportation facilities.
 Not use of HSE policies and standards
 Human errors
 Difficulties in disposing of plant and equipment
 Insistence on use of local firms and agents.
 Constraints on the availability of technically sound staff
 Unstable Government policies
 Change in labour policies
 Strikes, lockout, lawlessness
 Seasonal availability of labour
 25

2.3.4 EFFECT OF THE RISKS ON THE PROJECT STAKEHOLDERS

 Risks related to clients

“Tight project schedule” is the most significant risk among all factors, which
infers that formulating an appropriate schedule in the conceptual/feasibility phase is
never more constructive to the project delivery. The clients should prepare a practical
schedule allowing sufficient but not redundant time. As time and cost are always
closely correlated, a lengthy schedule will undoubtedly wreck the project cost benefit.
“Variations by the client” can directly result in changes in the planning, design
and construction. Variations possibly result from two reasons, the change of mind by
the clients or the misunderstanding/misinterpretation of the clients’ needs in the
project brief. For the former cause, the clients will bear the responsibility; for the
latter one, a knowledgeable initial project team should be established as early as
possible to define the project scope and functions precisely.
“High performance/quality expectations” is beared in most clients’ mind,
which however may mean the sacrifice of project cost, time and even safety. The
outcome of the project may also outreach the market or the clients’ needs. Hence,
clients should define the performance/quality of the proposed projects based on
rational research of their own and/or the market needs.
“Incomplete approval and other documents” usually occurs due to management
weakness of the project routines or the bureaucracy of government. Clients need to
establish a competent team to obtain the approval from government agencies and
prepare project documents effectively and efficiently.

 Risks related to designers

“Design variations” were popularly arisen in the design phase of a project and
may result from issues such as variations by the client and defective designs. To avoid
defective design, the design team need to fully understand what the clients want as
defined in the project brief and establish an efficient communication scheme among
the designers.
 26

“Inadequate program scheduling” often appears in projects with a tight schedule

when some programs need to be reduced to meet the project timeline. Moreover,
uncertainty surrounds most facets of construction projects, which makes it impossible
to accurately predict the time required for various programs. Choosing experienced
designers can help to minimize the difference between the proposed and practical
program schedules.
“Incomplete or inaccurate cost estimate” is directly related to the
designers/consultants’ knowledge and attitude towards work. As previously
mentioned, many unforeseen factors encompass construction activities, which often
deviates the estimated cost from the real cost. Choosing responsible and experienced
designers and if possible getting the contractors/subcontractors involved early can
help to illuminate the black box and minimize the inaccuracy.
“Inadequate or insufficient site information (soil test and survey report)” can
affect the progress of excavation, foundation and footing construction. Prior to any
design scheme, bore hole, soil test and survey with the government agencies and
nearby buildings should be conducted to ascertain the site conditions and reduce
unexpected risks.

 Risks related to contractors

“Unsuitable construction program planning” may result from inadequate program
scheduling, innovative design or contractors’ lack of knowledge in planning
construction programs, so can “variations of construction programs”. To reduce the
negative influence of the two risks, an informative program scheduling should be
worked out in the design phase, and the constructability of innovative design should
be examined. More importantly, the abilities to manage construction programs and
implement innovative design should be used as key criteria in appointing contractors.
“Lack of coordination between project participants” may lead to chaos in the
management of construction team and programs. A general contractor or project
manager who is skilful in team and program coordination should be engaged. On the
other hand, strengthening the participant’s perception of cooperation and
 27

communication is also of importance for improving construction quality and

efficiency.
“Unavailability of sufficient professionals and managers” and “unavailability of
sufficient amount of skilled labour” may result in delays in the construction phase.
The contractors should be mapping the construction progress all the time and
coordinating different project stakeholders in order to secure sufficient professionals,
managers and skilled labours ready to work.
“Occurrence of dispute” exists in most construction projects, on account of the
discrepancy and variations in the design and construction. Encountering any design
variations or difficulty in construction, contactors should always discuss with the team
and negotiate with the project manager (particularly the representative of clients)
about potential changes in the documentation and record the resulted delay of
progress in construction log.
“Serious noise pollution caused by construction” is a serious issue. Contractors
should arrange a suitable time for the construction work with serious noise and if
necessary, make sound insulation on site.
“General safety accident occurrence” is usually due to lack of project
management, negligence of construction safety policy and confliction of unparallel
construction programs. Once happening, it will bring on personnel change and further
impede the construction progress. Therefore, contractors should establish a systematic
construction program scheduling and provide safety training to on-site staff to
improve their awareness of safety.

 Risks related to subcontractors

“Low management competency of subcontractors” is the only recognised key risk
related to subcontractors. Unlike a general contractor who continuously manages a
construction site for a long period, subcontractors normally allocate their manpower
and other resources to different projects in order to achieve maximum profit of their
own business. Without competent management skills, subcontractors cannot
successfully manage their resources to meet the needs from several concurrent
construction sites. Accordingly, in additional to specialist abilities, the management
 28

competency should be regarded as one of the key criteria for appointing

subcontractors.

 Risks related to government bodies

“Excessive approval procedures in administrative government departments” and
“bureaucracy of government” are usual complains by clients and contractors. These
risks are normally out of the control of the project stakeholders. To attract investment
within their administrative territory, the government agencies should always make
great efforts to create a friendly environment in which the approval procedures are
reduced or at least the approval time is shortened, and the bureaucracy is minimized.
From the project team perspective, they should always adopt the strategies of
maintaining close relationship with local government officers and communicating
with them as much as possible and at the same time recording everything in writing.

 Risk related to external issues

“Price inflation of construction materials”, is identified to be related to external
environment. The price of construction materials is always changing in response to
the inflation and the relation between supply and demand in the construction material
market. As this risk is usually unavoidable, clients should choose an appropriate type
of contract such as lump-sum to transfer the risk to other parties; while contractor
should always avoid using fixed price contracts to bear the risk.

2.3.5 RISK MANAGEMENT STRATEGY

In projects, all the stakeholders (owner sponsor, consultants, designers, project

manager and others) face risky situations. All aim to minimise their risks to the
planned approach. Project Stakeho1ders cannot stop the fast-changing, unstable, risk-
prone environments but they must prepare themselves to manage the resulting impacts
of risks to their role in the project. All stakeholders should prepare contingency plans
 29

to handle risks. If the project risks can be identified well in time, quantified in a
logical manner, assigned roles and responsibilities among the stakeholders, allocated
budget and managed effectively, then the likelihood of schedule and cost overruns
will be significantly reduced.

Project risk management strategy involves identifying, analysing, and

controlling risks, which might affect the performance of the project. The risks
responsibility and liabilities between a client and contractor is generally demarcated
in the conditions of contract

The risk identification process involves researching the project to determine

the sources of risk, and connected potential risk factors that lead to risk events and
thereby reducing the chances of overlooking any potential risk event.

Risk analysis or risk assessment aims at quantifying risk exposures to enable

mitigation and development of project risk response plans for managing risks during
execution of the project. Quantifying risks involves the estimation of the probability
of occurrence and the cost of risk consequences of each risk element. This is followed
by the ranking of risks.

The risk response process considers risk transfer, reduction and avoidance
possibilities. A response risk plan ensures that the appropriate risk warning tools are
in place, to handle risks efficiently. A predetermined risk response plan can minimise
the consequences of possible adverse future events and can maximise the benefits of
positive future events.

Risk control aims at controlling deviations to cut down risks and maximise the
project value. It handles risks in a manner that achieves project objectives efficiently
and effectively by monitoring and adjusting plans and evolving alternate plans to
manage foreseeable risks, whenever necessary.

Risk management enables greater certainty of achieving the project goals by

making the project plan realistic, reducing costly surprises, minimising losses and
delay and enabling exploitation of beneficial opportunities. There is no tailor-made
approach for assessing the impact of such exposures and developing response
strategies to combat such risks. The instability in these risk-prone environments calls
 30

for a structured approach for managing risks to achieve the specified performance,
objectives of the project.

2.3.6 RISK IDENTIFICATION

Risk identification process involves determining which risks are likely to

affect the project and documenting the characteristics of each risk. It must be kept in
mind that though the broad categories of risk may be the same, its likelihood of
occurrence, impact and its cause could be different across work
packages/activities.

• During this stage all potential risks that can impact the project objectives and goals
should be listed and looked into.
• Various tools and techniques that are available should be used to identify the
potential risks that can impact the project objectives. It is better to use different
risk identification tools as different tools and techniques have different
advantages and disadvantages.
• In order to list out maximum possible risks all the stakeholders such as
sponsor, team members and project manager must be involved in identifying all
possible risks that can impact the project. There are various tools and techniques for risk
identification some of them are as
follows,

a. Brainstorming
This is one of the most popular techniques. Generally used for solving problems
and idea generation it is also an excellent technique for identifying project risks. All
relevant persons such as the team members and other stakeholders are involved in
identifying the risks that could face the project. Identification should be done in a non-
 31

critical way and all participants should have equal say, irrespective of their rank or
position. Who says what is not important. Rather, what is said is the key. To include
some formal structure to the process there should be an experienced facilitator
guiding the brainstorming session. The facilitator's role would be to:
• Begin the session by briefing the group about various aspects of the exercise such as
the objectives of the brainstorming session, the inputs required from the participants
e.g. their expert knowledge, experience and the outputs of the exercise which will
be an agreed upon list of identified risks.
• Provide a framework or structure to the group that they can focus on e.g. use of the
Work Breakdown Structure as the basis for identifying risks

• Assign suitable owners to further deal with the risk

Before closing the session the facilitator should review the risks identified to eliminate
some of the identified risks and decide on a future course of action for the remaining
risks.

b. Delphi technique
This technique is similar to brainstorming but the participants do not know one
another. Delphi technique, which is used for risk identification is also useful for
qualitative risk assessment.
This technique is useful if the participants are some distance away e.g. via e-
mail and are unaware of who said what. A qualified group is asked to identify risks
anonymously without consulting other participants. In this way views expressed
can remain unbiased. The facilitator acts as a co-coordinator among participants and
sums up the views of all participants. These responses are sent to all participants and
further views are expressed until stable opinions are
reached.

c. Expert opinion/Interviews
Experts or people with sufficient experience in a specific type of project or
problem can be of great help in avoiding/solving similar problems over and over again.
All the different stakeholders as well as relevant senior management persons should
 32

be interviewed to tap inputs from as broad base as possible. An added advantage of

interviewing all stakeholders is that it involves them in the process of risk
management, which means they will be more interested in participating in risk
management in future.

d. Lessons learned from previous similar projects

From the lessons learned and the risk management plans of similar projects, an
analogy can be formed. When comparing two or more projects, characteristics that are
similar to the projects can be found and these will provide insight into the likely risks
that can arises in the new project.

e. SWOT analysis
Identify the strength, weaknesses, opportunity and treat to project and take
appropriate decision based on the analysis.

f. Checklists
These are simple but very useful predetermined lists of risks that are possible for a
given project. The check list which contains a list of the risks identified in projects
undertaken in the past and the responses for those risks provides a head start in risk
identification. The check lists can be obtained from projects done earlier by the
performing organization or from industry specific standards.

2.3.7 RISK ANALYSIS

Probability and impact matrix as a tool

A common way to determine whether a risk is considered low, moderate, or

high by combining the two dimensions of a risk: its probability of occurrence, and its
impact on objectives if it occurs. Probability and impact matrix development will help
in qualifying the risk which will give an indication of how great the risk is. This
 33

process is a subjective analysis of the risks identified. Before proceeding to the risk
analysis we need to understand two terms:

Probability Scale

The probability of occurrence of an event is indicated from “very unlikely” to

“almost certainty” by a numerical scale, i.e. 0.1, 0.3, 0.5, 0.7, 0.9. It depends on the
degree of maturity of the project design

Impact Scale

It reflects the significance of impact, either negative for threat or positive for
opportunities. They are specific to the objective potentially impacted, the type & size
of the project, the organization’s strategies & financial state, and the organization’s
sensitivity to particular impacts. It is rank-ordered, i.e. “very low”, “low”,
“moderate”, “high”, and “very high” and indicated linearly by 0.1, 0.3, 0.5, 0.7, 0.9
or non-linearly , i.e. 0.05, 0.1, 0.2, 0.4, 0.8 .

Risk analysis can be done in two ways :

 Qualitative risk analysis

 Quantitative risk analysis

 Qualitative Risk Analysis

Qualifying the risk will give an indication of how great the risk is. This process is
a subjective analysis of the risks identified in Risk Identification. Qualitative risk
gives a better description of the risk, its dimensions and its characteristics. Risk
qualification involves listing risks and using a risk matrix to determine how risks
should be categorized and ranked according to their impacts on schedule, quality,
cost, and overall success of the project. Quantitative involves getting a finer cut on
risk by applying mathematical and other quantitative tools. In practice, companies
 34

rarely split the two. The point of risk analysis is to drill down on the potentially high
risk tasks to get a more detailed picture of their impacts.

Characteristics

 Usually a rapid & cost-effective means of establishing priorities for Risk

Response Planning
 Lays the foundation for Quantitative Risk Analysis
 Requires output of the Risk Management Planning & Risk Identification
 The project’s risk can be compared to the overall risk of other projects
 The project may be selected, continued, or terminated
 Lead into Quantitative Risk Analysis or Risk Response Planning, depending
on the need of the project & the performing organization.

Inputs To Qualitative Risk Analysis

 Risk management plan

 Identified risks
 Project status: The timing of risk analysis is important because the risk
impacts, particularly in terms of schedule and budget, will change depending
on when they are analyzed. The later in the project cycle, the clearer the
impacts will be.
 Project type: It is important to dimension the risk since an infrastructure
project will be different than a real estate project in terms of risks involved.
 Data precision: The accuracy and precision of data are important.
 Scales of probability: Probability is a subjective in most projects. The
probability of a risk occurring is the result of how many times this kind of risk
has occurred in past similar projects, combined with judgement of the project
manager and key stakeholders based on their experience.
 35

Tools And Techniques:

a. Risk Probability And Impact:

Probability analysis is the process of developing a measure of how likely a risk is to

(a) occur and (b) create the impacts anticipated. Using the risk matrix, the project
manager can identify risks and assign probabilities to all high-impact risks. For most
risks, these probabilities are subjective and simply communicate a sense of confidence
that the project manager has about the risk in question. Generally, probabilities should
be stated in three forms, 25 percent, 50 percent, 75 percent, suggesting little chance of
the risk occurring, substantial chance, or high chance, respectively.

b. Project Assumptions Testing:

Testing assumptions involves taking time to review key assumptions and confirming
that the assumption is right and that the probability assigned is right.

c. Data Precision Ranking:

In this method the data precision ranking indicates how precise the test data are
compared to a common standard.

 Quantitative Risk Analysis

A numerical analysis of the Probability & Impact ( amount at stake or

consequences ) of the highest risks ( that have been prioritized ) on the project from
Qualitative Risk Analysis, to:

 Determine which risk events need responses , determine overall project risk (
risk exposure ) , determine cost and schedule reserves
 Determine the quantified probability of meeting project objectives, for
example:
o We have 80% chance to complete within the 6 months required
o We have 75% chance to complete within the budget.
 Identify risks requiring the most attention
 36

 Create realistic & achievable cost, schedule, or scope targets.

Inputs To Quantitative Analysis

 Investigation into the highest risks on the project

 Determination of the type of probability distribution that will be used, e.g.,
triangular, normal, beta, uniform or log normal distributions
 Sensitivity Analysis - This involves analyzing how much
sensitive the project is to a particular risk, that is, quantifying
linkages between a given risk and the effect it could have on
the project from a schedule, quality, cost, and overall
performance perspective.
 Determining which risks have the most impact on the project
 Determining how much quantified risk the project has
through Expected Monetary Value or Monte Carlo analysis.
 All the inputs to qualitative analysis are relevant here, plus
expert judgement. Expert judgement comes from technical
experts who have knowledge at the technical level on the
risk in question.

Tools And Techniques

a. RFMEA Technique
Risk Failure Mode and Effects Analysis is a risk management
tool developed from the concept of FMEA. It uses multiple
Fig 2.2 RFMEA Flowchart
tools such as RPN, Risk score,Paretto Analysis and scatter diagram
to carry out the [Link] method may be expalined as follows:

First the Risks are identified and the probability of occcurance and the
impact and detectability are evaluated by a team. The
RPN(RPN=Probability*Impact* Detectability ) and the Risk Score
 37

(RS= Probability*Impact) are then calculated and send for expert review
and the revised values are recorded.

In the next step paretto charts of the RPN and RS are made and the critical
RPN and RS are [Link] critiacal value changes as per the project
and varies from project to [Link] a scatter diagram of the RPN vs
RS is made an those risks beyond the critical lines are classified as top
priority risks and the necessary mitigation plans are proposed. Based on
the proposed plans the RPN and RS are re–evaluated.

The RFMEA is a advanced risk tool that is simple and intuitive. It

increases the value of the risk management process by by expanding the
concept of a simple risk score based only on likelyhood andimpact by
adding the detection attribute to the risk event.

b. Sensitivity Analysis

Sensitivity analysis enables us to test which components of the project have the
greatest impact upon the results, thus narrowing down the main variables to be
considered. The technique is widely used because of its simplicity and ability o focus on
particular estimates. It does not however actually evaluate risk, the decision maker
must still assess the probability of an event occurring.

c. Breakeven Analysis
This technique is an application of sensitivity analysis. It can be used to measure
the key variables which show a project to be either attractive or unattractive. A simple
example for a project would be examining the critical rate of return with the cash inflow
and initial cash outflow, the capital cost, the rate of inflation, the discount rate, and
with a rent review every three years with the new rent being based upon the annual rate
of inflation in the year preceding the review plus 2%.
 38

The rate of return is calculated by finding the appropriate rate which equates all
future cash lows with the initial capital cost. The net present value criterion merely
states that a project is worth undertaking if the present value of all future discounted
cash flow is greater than, or equal to, the initial capital cost.

d. Scenario Analysis
This method the aim is to consider various scenarios as options. When undertaking
a scenario analysis the key variables are identified together with their values. For
instance, at the early concept stage of a project the architect might be looking at various
different layouts of the building to optimise the net to gross floor area by minimising the
amount of circulation and balance area, ie. the area taken up by toilets, corridors, lift
wells, and ducts. Similarly, the provision for car parking might be under consideration.
The quantity surveyor could present various scenarios showing the impact on the cost
change for the change in floor area, forecasts of inflation, and the expenditure on roads
and car parking that might be stipulated by the local authority.

e. Decision Tree Analysis

Most of the risks we face on a project are independent of other risks. These types
of risks are easier to identify and easier to manage. However, there are times when
risks are connected. That is, it's possible that certain risks will only appear as a result
of actions taken as a result of managing another risk. A decision tree is a technique for
determining the overall risk associated with a series of related risks.

Decision tree analysis uses a decision tree diagram. It is also known as Impact
analysis diagram which is used when a decision is to be viewed as a sequence of
several interrelated decisions and not as a single isolated occurrence. They are
graphical models used to depict a project and can clearly reflect the effects of each
decision that could be taken in the project.
 39

f. Monte Carlo Analysis

Monte carlo analysis is the method generally used for analyzing the risk
quantitatively. It can take duration of activities with varying probability distribution
patterns. The network model generally uses triangular distribution to analyze the
project schedule with the object of understanding how uncertainty affects the project
completion. With the each simulated run, the model generates random numbers and
performs a forward and backward pass, indicating in each trial the tasks on the critical
path. After running a complete simulation (say 1000 runs), it evaluates the probability
of each task on the critical path of the project and displays them on a histogram chart
of the stimulated values.

Monte Carlo gives an unbiased estimate of the mean and variation of the project
duration along with the degree of criticality of each activity. The analysed model can
then be used to focus on the preventive measures to safeguard against delays and
bottlenecks of these key drivers (critical tasks) to improve the outcome for the entire
project, thus minimising project [Link] information also enables forecasting
probability of project completion on a given time schedule and to decide the
acceptable risk level while developing the project master schedule.

The Monte Carlo simulation for estimating probable project completion time
follows the procedure given here.

 Develop the network model.

 Assess the probability distribution (uniform, triangular, normal, or other) for
the duration of each activity. Generally, three-times triangular estimates is
preferred.
 Generate random number, such data can be extracted from random tables or
by computer. A random is a variable, which assumes different values
conforming to the activity duration probability distribution, using relationship
as explained in the examples given in subsequent paragraphs.
 Incorporate the random variant for the duration of each activity in the network
model.
 40

 Analyse the network to determine critical activities and project completion

time. Store this output data for further statistical analysis.
 Run the above process on computer, number of times (say at least 1000 times),
using different random numbers.
 Analyse the stored output data of each iteration to determine project
probability distribution, its mean value and standard deviation.

The project probability distribution with its stored data is then used to identify the
criticality of the probable activities that will be critical to project completion.

2.3.8 METHODS OF RISK MITIGATION

Risk management is one of the growing areas of importance within the

construction management arena. It creeps into every discussion, every solution
discussed, and it is becoming one of the catchphrases of the time when dealing with
how to extract greater economic value from the construction management processes.

There is no escape from the presence of risk, and humanity must accordingly seek
ways of dealing with it. Some risks - generally of a fundamental nature - are met
through the collective efforts of society and government. Municipal police and fire
departments are good examples of the collectively financed approaches to dealing
with risk, but there are countless others that might be suggested. Although society and
government can help to alleviate the burden of risks in many areas, most risks are
considered to be the responsibility of the management.

The existence of risk is a source of discomfort to most people, and the uncertainty
accompanying it causes anxiety and worry. Since risk is distasteful and unpleasant,
people's rational nature leads them to attempt to do something about it. Basically,
people deal with risk in five ways. They avoid, retain, transfer, share, or reduce it.
 41

 Objectives of Risk Mitigation and Planning

The objectives of risk mitigation and planning are to explore risk response
strategies for the high risk items identified in the qualitative and quantitative risk
analysis. The process identifies and assigns parties to take responsibility for each risk
response. It ensures that each risk requiring a response has an owner. The owner of
the risk could be a planner, engineer, or construction manager, depending on the point
in project development, or it could be a private sector contractor or partner, depending
on the contracting method and risk allocation.

Risk mitigation and planning efforts may require that agencies set policies,
procedures, goals, and responsibility standards. Formalizing risk mitigation and
planning throughout the industry will help establish a risk culture that should result in
better cost management from planning through construction and better allocation of
project risks that align teams with customer-oriented performance goals.

Once the planner, engineers, and construction managers have thoroughly analyzed
the critical set of risks, they are in a better position to determine the best course of
action to mitigate those risks. Three key questions can be posed for risk mitigation
which are;

 What can be done and what options are available?

 What are the tradeoffs in terms of all costs, benefits, and risks among the
available options?
 What are the impacts of current decisions on future options?

An understanding of these three questions is critical to risk mitigation and risk

management planning. Question 1 addresses the available risk response options,
which are presented in the following section. An understanding of questions 2 and 3 is
necessary for risk planning because they determine the impact of both the immediate
mitigation decisions and the flexibility of risk mitigation and planning on future
events.
 42

 Risk Response Options

Risk identification, assessment, and analysis exercises form the basis for sound
risk response options. A series of risk response actions can help agencies and their
industry partners avoid or mitigate the identified risks. A risk may be the following:

 Unrecognized, unmanaged, or ignored (by default).

 Recognized, but no action taken (absorbed by a matter of policy).
 Avoided (by taking appropriate steps).
 Reduced (by an alternative approach).
 Transferred (to others through contract or insurance).
 Retained and absorbed (by prudent allowances).
 Handled by a combination of the above.

The above categorization of risk response options helps formalize risk

management planning. The project development team must identify which strategy is
best for each risk and then design specific actions to implement that strategy. The
strategies and include the following:

 Risk May Be Avoided

Risk is avoided when the management refuses to accept the risk even for an
instant. This is accomplished by merely not engaging in the action that gives rise to
risk. If you do not want to risk losing your invested capital in a hazardous venture,
then pick one where there is less risk. If you want to avoid the risks associated with
the ownership of property, do not purchase the property, but lease or rent it instead.

The avoidance of risk is one method of dealing with risk, but it is a negative rather
than a positive technique. Advancement of the project and progress in the economy
both require risk taking. If risk avoidance were utilised extensively, both the
stakeholders and society would suffer. For this reason, avoidance is an unsatisfactory
approach to dealing with many risks.
 43

 Risk May Be Retained

Risk retention is perhaps the most common method of dealing with risk. When
faced with an unlimited array of risks; in most cases nothing is done about them.
When there is no positive action taken to avoid, reduce, or transfer the risk, the
possibility of loss involved in that risk is retained.

Risk retention may be conscious or unconscious. Conscious risk retention takes

place when the risk is perceived and not transferred or reduced. When the risk is not
recognised, it is unconsciously retained. In these cases, the party so exposed retains
the financial consequences of the possible loss without realising that they do so.

Risk retention may also be voluntary or involuntary. Voluntary risk retention is

characterised by the recognition that the risk exists, and by an implied agreement to
assume the losses involved. The decision to retain a risk voluntarily is made because
there are no alternatives more attractive. Involuntary risk retention takes place when
risks are unconsciously retained. Involuntary retention also takes place when the risk
cannot be avoided, transferred, or reduced.

Risk retention is a legitimate method of dealing with risk; in many cases it is the
best way. Each party must decide which risks to retain and which to avoid or transfer
based on margin for contingencies or ability to bear the loss. A loss that might be a
financial disaster for one party might easily be borne by another. As a general rule,
risks that should be retained are those that lead to relatively small losses.

 Risk May Be Transferred

Risk may be transferred from one party to another who is more willing to bear the
risk. An example is the process of hedging, where an individual guards against the
risk of price changes in one asset by buying or selling another asset whose price
changes in an offsetting direction.
 44

In addition, risk may be transferred or shifted through contracts. A hold-harmless

agreement, in which one individual assumes another's possibility of loss, is an
example of such a transfer. For example, a tenant may agree under the terms of a lease
to pay any judgments against the landlord that arise out of the use of the premises.
Insurance such as CAR etc is also a means of shifting or transferring risk. In
consideration of a specific payment, the premium, by one party, the second party
contracts to indemnify the first party up to a certain limit for the specified loss that
may or may not occur.

 Risk May Be Shared

Risk is shared when there is some type of arrangement to share losses. Risks are
shared in a number of ways in our society. One outstanding example of a device
through which risk is shared is the corporation. Under this form of business, the
investments of a large number of persons are pooled. A large number of investors
may pool their capital, each bearing only a portion of the risk that the enterprise may
fail. As we shall see, insurance is another device designed to deal with risk through
sharing. One basic characteristic of the insurance device is the sharing of risk by the
members of the group.

In the construction industry many risks are shared by all the stakeholders. Since
all projects are time-bound and time is equally precious for all-client, contractor and
consultant, risk of delays is very high. Hence parties are obliged to share the risk
arising due to delays involved and hence all efforts must be made to make quick
amendments.

 Risk May Be Reduced

Risk may be reduced in two ways. The first is through loss prevention and control.
There is almost no source of loss where some efforts are not made to avert the loss.
Safety programs and loss prevention measures such as medical care, fire departments,
 45

night security guards, sprinkler systems, and burglary alarms are all examples of
attempts to deal with risk by preventing the loss or reducing the chance that it will
occur. Some techniques are designed to prevent the occurrence of the loss, while
others, such as sprinkler systems, are designed to control the severity of the loss if it
does happen.

From one point of view, loss prevention is the most desirable means of dealing
with risk. If the possibility of loss could be completely eliminated, risk would also be
eliminated. From a second point of view, loss prevention is seen to be an inadequate
approach to dealing with risk. No matter how hard we may try, it is impossible to
prevent all losses. In addition, in some cases the loss prevention may cost more than
the losses itself. In addition to reduction of risk through loss-prevention activities, risk
can be reduced in the aggregate by the use of the law of large numbers. By combining
a large number of exposure units, it is possible to make reasonably accurate estimates
of the future losses for a group. On the basis of these estimates, it is possible for an
organisation to assume the possibility of loss of each exposure, and yet not face the
possibility of loss itself.

Given a clear understanding of the risks, their magnitude, and the options for
response, an understanding of project risk will emerge. This understanding will
include where, when, and to what extent exposure will be anticipated. The
understanding will allow for thoughtful risk planning. Some simple and pragmatic
applications of risk mitigation in the real world have been discussed below.

 Risk Of Human Error

As technology becomes more and more reliable, one of the dominant sources of
failure modes is that of human error. There are a range of types of human error, and a
range of methods for analyzing their probability. The inability of people to do certain
tasks to the level of performance that are required of them, inability to get their hands
 46

into certain areas, inability to stand up while in other areas, these are classic human
errors. Such errors can easily delay projects to long spans of time.

Obviously the potential for risk mitigation in these areas is great. While there is the
temptation to try to pull everything away from fallible humans with our short
attention spans, this sort of technology is still quite expensive and out of reach
commercially.

 Managing inventory

It is difficult to speak about risk mitigation without discussing strategies for

managing the physical asset inventory. In the construction industry, the management
of risk drives inventory management. Holding inventory costs money. Risk can be
mitigated by shifting some of the risk to the vendors.

Through managing the contracts better, arrangements can be made where the
vendors hold certain levels of stock on your behalf, with the guarantee to deliver this
within a specific timeframe. Holding costs reduced to practically zero, and if the
contract is managed right then the risk of not having the parts is eliminated also.

 Managing whole-of-life costs

This particular strategy has been adopted in a widespread fashion by those within
the mining industry and others managing fleets of mobile equipment such as the
construction industry.

It involves developing a partnering arrangement with the equipment providers

through a well orchestrated negotiation process. This needs to be a fair arrangement
whereby you share the risks of the whole of life costs of the asset. The vendor is asked
to provide a unit cost price for the running of the asset, scaled to represent the rising
cost over the life of the asset. And financial agreements are made to ensure that any
 47

variation from this is either compensated, or negotiated. In the mobile equipment field
these sorts of arrangements are exempt from operator damage and accidental damages
in particular.

 Risk Planning

Risk planning involves the thoughtful development, implementation, and

monitoring of appropriate risk response strategies. Risk planning is the detailed
formulation of a plan of action for the management of risk. It is the process to do the
following:

 Develop and document an organized, comprehensive, and interactive risk

management strategy.
 Determine the methods to be used to execute a risk management strategy.
 Plan for adequate resources.

Risk planning is iterative and includes describing and scheduling the activities and
processes to assess (identify and analyze), mitigate, monitor, and document the risk
associated with a project. For large projects or projects with a high degree of
uncertainty, the result should be a formal risk management plan.

Planning begins by developing and documenting a risk management strategy.

Early efforts establish the purpose and objective, assign responsibilities for specific
areas, identify additional technical expertise needed, describe the assessment process
and areas to consider, delineate procedures for consideration of mitigation and
allocation options, dictate the reporting and documentation needs, and establish report
requirements and monitoring metrics. This planning should also address evaluation of
the capabilities of potential sources as well as early industry involvement.

 Risk Planning Documentation

Each risk plan should be documented, but the level of detail will vary with the
unique attributes of each project. Large projects or projects with high levels of
 48

uncertainty will benefit from detailed and formal risk management plans that record
all aspects of risk identification, risk assessment, risk analysis, risk planning, risk
allocation, and risk information systems, documentation, and reports. Projects that are
smaller or contain minimal uncertainties may require only the documentation of a red
flag item list that can be updated at critical milestones throughout the project
development and construction.

 Red Flag Item Lists

A red flag item list is created at the earliest stages of project development and
maintained as a checklist during project development. It is perhaps the simplest form
of risk identification and risk management. Not all projects will require a
comprehensive and quantitative risk management process. A red flag item list can be
used in a streamlined qualitative risk management process.

A red flag item list is a technique to identify risks and focus attention on critical
items that can impact the project's cost and schedule. Issues and items that can
potentially impact project cost or schedule in a significant way are identified in a list,
or red flagged, and the list is kept current as the project progresses through
development and construction management. By listing items that can potentially
impact a project's cost or schedule and by keeping the list current, the project team
has a better perspective for setting proper contingencies and controlling risk.
Occasionally, items considered risky are mentioned in planning but soon forgotten.
The red flag item list facilitates communication among planners, engineers, and
construction managers about these items. By maintaining a running list, these items
will not disappear from consideration and then later cause problems.

 Risk Charters/Registers

The creation of a risk charter is a more formal identification of risks than the
listing of red flag items. Typically, it is completed as part of a formal and rigorous
risk management plan. The risk charter provides project managers with a list of
significant risks and includes information about the cost and schedule impacts of these
risks. It also tracks changes in the magnitude of potential cost and schedule risk
 49

impacts as the project progresses through the development process and the risks are
resolved.

A risk charter is a document containing the results of a qualitative or quantitative

risk analysis. It is similar to a list of red flag items, but typically contains more
detailed information about the potential impact of the risks and the mitigation
planning. The risk charter contains a list of identified risks, including description,
category, and cause. It may contain measurements of magnitude such as the
probability and impact of occurrence. It may also include proposed mitigation
responses, "owners" of the risk, and current status. This method may be more
effective than simply listing potential problem areas through red flagging because it
integrates with the risk monitoring and control processes. The terms "risk charter" and
"risk register" are synonymous in the construction industry.

A risk charter is used as a management tool to identify, communicate, monitor,

and control risks. It provides assistance in setting appropriate contingencies and
equitably allocating risks. As part of a comprehensive risk management plan, the risk
charter can help control cost escalation. It is appropriate for large or complex projects
that have significant uncertainty.

The charter organizes risks that can impact cost estimates and project delivery. A
risk charter is typically based on either a qualitative or quantitative assessment of risk,
rather than simple engineering judgment. The identified risks are listed with relevant
information for quantifying, controlling, and monitoring. The risk charter may include
relevant information such as the following:

o Risk description
o Status
o Date identified
o Project phase
o Functional assignment
o Risk trigger
o Probability of occurrence (percent)
o Impact ($ or days)
 50

o Response actions
o Responsibility (task manager)

 Formal Risk Management Plan

The project development team's strategy to manage risk provides the project team
with direction and basis for planning. The formal plan should be developed during the
planning and scoping process and updated at subsequent project development phases.
Since the agency and contractor team's ability to plan and build the facility affects the
project's risks, industry can provide valuable insight into this area of consideration.

The plan is the road map that tells the agency and contractor team how to get from
where the project is today to where the public wants it to be in the future. Since it is a
map, it may be specific in some areas, such as the assignment of responsibilities for
agency and contractor participants and definitions, and general in other areas to allow
users to choose the most efficient way to proceed. The following is a sample risk
management plan outline:

o Introduction
o Summary
o Definitions
o Organization
o Risk management strategy and approach
o Risk identification
o Risk assessment and analysis
o Risk planning
o Risk allocation
o Risk charter and risk monitoring
o Risk management information system, documentation, and reports

Each risk plan should be documented, but the level of detail will vary with the
unique attributes of each project. Red flag item lists, risk charters, and formal risk
management plans provide flexibility in risk management documentation.
 51

CHAPTER 3

CASE STUDY : TUNNEL PROJECT

A tunnel is an underground passageway, completely enclosed except for

openings for ingress and egress, commonly at each end. A tunnel may be for foot or
vehicular road traffic, for rail traffic, or for a canal. Some tunnels are aqueducts to
supply water for consumption or for hydroelectric stations or for sewers. Other uses
include routing power or telecommunication cables. A tunnel is relatively long and
narrow, in general the length is more (usually much more) than twice the diameter,
although similar shorter excavations can be constructed such as cross passages
between tunnels.

Traditionally, tunnels have been designed using empirical methods and a semi-
observational approach. A series of high-profile collapses in civil tunneling have
demonstrated that the designers need to take a risk-based design approach. Therefore
it is necessary to incorporate strategies into the design and construction phases of a
project that provide both continuity and a framework for an open process that can be
adjusted during the progress of the works to suit the actual conditions

A tunnel project must start with a comprehensive investigation of ground

conditions by collecting samples from boreholes and by other geophysical techniques.
An informed choice can then be made of machinery and methods for excavation and
ground support, which will reduce the risk of encountering unforeseen ground
conditions.

Tunnels are dug in types of materials varying from soft clay to hard rock. The
method of tunnel construction depends on factors such as:

 the ground conditions,

 the ground water conditions
 the length and diameter of the tunnel drive
 52

 the depth of the tunnel

 the logistics of supporting the tunnel excavation
 the final use and shape of the tunnel

 Methods Of Tunnelling:

There are different methods for tunneling process to be carried out. The best
applicable/suitable method of constructing a tunnel is to be used by considering
various factors as mentioned above. The consideration of the most suitable mode of
tunneling will always reduce a large amount of risk which would further reduce the
adverse effects of project delays and cost overruns. Hence the methods of tunneling
are as follows:

Fig:3.1 Tunneling Methods

 53

In order to select the appropriate method, it is essential to have a precise and

timely knowledge of the characteristics of the ground to be drilled so that it can be
perfectly defined and we can implement all the measures to prevent the appearance of
unforeseen types of ground and avoid dangers affecting the [Link] the
following different factors must be taken into account:

 Possibility of ground settlements which may cause the tunnel to collapse, so

that enough overburden is intended to be above the tunnel.

 Possible presence of water which may involve problems in the excavation,

such as landslides.

 Loss of ground which sometimes results in the appearance of chimneys.

 The hardness and abrasiveness of rocks result in an important reduction in the

equipment’s capacity and a considerable increase in the maintenance expenses
.

 Presence of gases.

 Impossibility to carry out ground treatments from the interior of the tunnel.

 Tunneling Hazards:

The source of risk is a thing or activity with a potential for consequence.

Typically the focus is on threats such as unforeseen geological conditions and it is
often difficult to investigate and fore-cast problems for long tunnel drives in remote
areas. Owing to the enclosed space of a tunnel, fires can have very serious effects on
users. The main dangers are gas and smoke production, with low concentrations of
carbon monoxide being highly toxic.
 54

3.1 RISK MANAGEMENT FOR TUNNEL PROJECT

For the purpose of study of the risk management strategy in tunnel projects, the Pir
Panjal Railway Tunnel Project T-80 was chosen. The features of this project are
explained in the following sections.

 About The Project:

Name of the project -Pir Panjal Railway Tunnel Project T-80

Client: -Northern Railways

Prime Contractor: -IRCON International Ltd.

Contractor: -Hindustan Construction Company Ltd.

Consultant: -GC –Rites

Location of project: -Gund-Tethar, Post-Banihal, Dist-Doda

State-Jammu and Kashmir

-Nearest Airport: Srinagar (120 km)

-Nearest Railway station: Udhampur (150 km)

Project -Zone V-A

-Zone V-B

Commencement Date - 10th Aug' 05

Duration -44 months

 Details Of Tunnel (T-80):

Length of tunnel -10.96 km

Method adopted -NATM (New Austrian Tunelling Method)

 55

Shape of the tunnel -Modified Horse Shoe

Cross section of tunnel -Width 8.88 m and Height 8.85 m

Geologically the tunnel is divided into - Eight rock classification

Number of faces for excavation of tunnel -Five

Dimensions of shaft at north end -Dia 12 m and 55 m in depth

Dimensions of Adit at south end -780 m in length with 10 % down gradient

Major equipments used - Road Header

- Boomer (L2C & L2D)

-CIFA shotcrete

 Salient Features:

 Pir Panjal tunnel (T-80) is the part of JURL project. This is the longest rail
tunnel of India (10.96km). When completed, this will provide alternate high
capacity, reliable means of transport to Kashmir valley, not vulnerable to
frequent closures due to snow fall and hill slides.
 The tunnel is completely straight in almost N-S direction. It joins Cheril
Village in valley with lower Munda on Qazigund.
 The maximum overburden is approximately 1150m. 4 km length has an
overburden > 500m. 650 m length has >1000m.
 There is single track tube with side road 3m wide for repair/emergency rescue.
 Creation of more faces: Adit (south portal) and Shaft (north portal).
 There is a rising grade of 1% from south to the high point at Km 159.134 and
subsequently there is a falling gradient of 0.5% up at the end.
 56

 Scope Of Work:

 Construction of main tunnel from Ch.152+600 to Ch. 158+730 i.e., 6130 m

(Zone VA) and from 158+730 to 163+560 i.e., 4830 m (Zone VB).
 Construction of the approx. 780 m long access tunnel section for start of two
interim construction face (MTS1 & MTS2) of the main tunnel as per proposal
of the CONTRACTOR and as approved by the ENGINEER.
 Construction of a shaft at north portal with diameter 12mts and length 52mts.
 Excavation in all kinds of soil/rock in the tunnel including disposal of muck as
per approved drawings or site requirements.
 Support installation, concrete or shotcrete inner lining & other concrete works,
and all other ancillary works as per approved drawings.
 Slope stabilisation and slope protection as per approved drawings or as per site
requirement. This also includes temporary slope stabilisation and slope
protection
 Construction of final portal structures at the South Portal and north portal
including back filling as per approved drawings
 Any other incidental / ancillary works connected with the above as directed by
Engineer-in-charge.

 Why TBM Is Not Used:

 TBM design requires reliable geologic information in the initial stage itself
and there is always a likelihood of mixed-face excavation in Pir Panjal.
 There is also heterogeneous geology i.e. soil near portals to Trap and quartzite
in middle which is not well suited for TBM. Heavily faulted areas and/or wide
fault zones are also expected, TBM may be trapped by ground movement
behind the face.
 High squeezing is anticipated in the middle zone with 1150m overburden and
likelihood of heavy water inflow in the lime stone zone with heavy over
burden.
 57

 High initial period needed for ordering, design, manufacture and

commissioning of TBM.
 Retrieval of TBM’s approaching each other requires large cavern.
 TBM obstructs final lining activity for a long time after break-through.
 Non circular section can only be achieved by enlargement later.
 TBM requires specialized skilled crew and also there is heavy requirement of
electric power.
 There is a high risk of getting TBM stuck under squeezing ground conditions,
in fault zones and in alluvium like situation at the ends.
 Designing, tendering, manufacturing and installation of TBM takes 10 to 14
months.
 Therefore NATM method was selected for Pir Panjal tunnel project.

Fig 3.2 Tunnel Section

 NATM

The NATM is rather a concept or a philosophy than a construction method. The

NATM constitutes the concept, where the surrounding soil or rock mass of a tunnel is
 58

integrated into the overall support structures, the rock is activated to a load bearing
ring around the tunnel. Old conventional tunnelling methods consider the rock mass
surrounding the tunnel only as a loading member.

In NATM the initial support consisting of shotcrete, reinforced by wire-mesh or

steel fibre, possibly steel ribs and rock bolts, is installed in close contact with the rock
surfaces and form a composite structure. The composite system rock (soil) /
supporting elements allow controlling the deformation to achieve stress release and
stress redistribution around the tunnel. It also limits the loss of natural rock / soil
strength in order to maintain the carrying capacity of the rock arch around the tunnel.

During construction continuous Geotechnical measurements and Controls are

carried out to monitor the stress rearrangement process, to control stability and to
optimize the supporting system, construction sequence and to verify the rock
classification.

The NATM represents the state of art in modern tunnel. Its concept makes NATM
more economical than conventional means of tunnelling.

Sequence Of Activities Involved In NATM:

o Face drilling
o Charging and Blasting.
o Defuming.
o Mucking
o Wire-mesh and lattice girder fixing.
o Shotcreteing.
o Rock-bolting.
o Forepoling.
 59

3.1.1 RISK IDENTIFICATION:

The first step of the risk management process involves the identification of the risks
involved in the project. The methods used in this project for identifying different risks
are:

 Expert opinion method

 Brainstorming

The identified risks have been tabulated in the table3.1 below.

TABLE 3.1
Identified Risks

LABEL RISKS

1. Schedule risks
A Unforeseen site conditions
B Cycle Time (de-fuming to de-fuming)
C Lining Cycle time
D Average Cycle time
E Delay due to breakdown of machines
Tunnel road is in poor condition and this leads to delay of activities and
F
breakdown of equipments.
Delay in concreting is mainly due non-availability and breakdown of
G
transit mixers.
Transit Mixers are not operating at their full capacity due to high gradient
H
near batching plant.
Private tippers are overloaded which may lead to accident and also
I
breakdown.
2. Cost Risks
J Unforeseen site conditions
 60

Transit Mixers are not operating at their full capacity due to high gradient
K
near batching plant.
Private tippers are overloaded which may lead to accident and also
L
breakdown.
3. Quality risks
M Excavation in Soft Ground/Poor Rock Mass Tunnelling
N Every step involved in the NATM Method of tunnelling.
O Formation of cold joints at many locations.
Transit Mixers are not operating at their full capacity due to high gradient
P
near batching plant.
Q Deformations in the rocks.
4. Environmental risks
Handling of explosive:
Excessive confinement of explosives is the leading cause of poor blasting
R
results such as back break, ground vibrations, air blast, unbroken toe, fly
rock, and poor fragmentation.
S De-fuming
5. Safety risks
T Due to low visibility stationary vehicles are not clearly visible
U Some vehicles are observed moving without back light and reverse horns
It has been observed that drivers are not wearing their reflecting jacket
V
while they come down from their vehicle inside the tunnel.
Private tippers are overloaded which may lead to accident and also
W
breakdown.
X Lack of safety signage inside the tunnel

3.1.2 RISK ANALYSIS

 Using RFMEA Technique

Risk analysis techniques include expert interviews, expected monetary value, and
response matrices, etc. The RFMEA technique is not just another way of analysing
 61

project risks but helps focus the risk contingency planning required early in the
project on critical risks.

The use of RFMEA technique is explained here with terminology, along with
detailed methodology. The “probability”, “likelihood” of the occurrence of a risk
event is termed as “Probability of Occurrence”. The discrepancies do not stop with the
probability value. A second attribute typically associated with a risk event is what is
called the “Impact”.

In the RFMEA technique a third attribute is used called “Detectability” of a risk

event differentiating it from the FMEA technique. This attribute of a risk event gives
an idea of the ability of a risk to be detected.

Probability of occurrence value guidelines:

9 or 10 - Very likely to occur

7 or 8 - Will probably occur

5 or 6 - Equal chance of occurring or not

3 or 4 - Probably will not occur

1 or 2 - Very unlikely

Detectability value guidelines:

Detection is defined as the ability of detection technique or method(s) to detect

the risk event with enough time to plan for a contingency and act upon risk.

9 or 10 - There is no detection method available or known that will provide an

Alert with enough time to plan for a contingency.

7 or 8 - Detection method is unproven or unreliable; or effectiveness of

detection method is unknown to detect in time.

5 or 6 - Detection method has medium effectiveness.

 62

3 or 4 - Detection method has moderately high effectiveness.

1 or 2 - Detection method is highly effective and it is almost certain that the

risk will be detected within adequate time.

Impact value guidelines:

9 or 10 - Schedule – Major milestone impact and > 20% impact to critical path.

Cost – Total project cost increase > 20%

Technical – The effect on the scope renders and item unusable.

7 or 8 - Schedule – Major milestone impact and 10% - 20% impact to critical

path.

Cost – Total project cost increase 10% - 20%

Technical – The effect on the scope changes the output of the project
and it may not be usable to client.

5 or 6- Schedule – Impact 5% -10% impact to critical path.

Cost – Total project cost increase 5% - 10%

Technical – The effect on the scope changes the output of the project
and it will require client approval.

3 or 4- Schedule – Impact of <5% impact to critical path.

Cost – Total project cost increase <5%

Technical – The effect on the scope is minor but requires an approved

scope change internally and maybe with the client.

1 or 2- Schedule – Impact insignificant.

Cost – Total project cost increase insignificant.

Technical – Changes are not noticeable.

The risks that where identified where then subjected to a questionnaire

through which the probability of its occurrence, impact and the detectability where
determined through a probabilistic approach and the average of the values thus
obtained where calculated. The average values obtained are listed below.
 63

TABLE 3.2

Calculations

Average of the Probability of Average of the Average of

Occurrence Impact Detectability
A 7.80 7.60 8.00
B 7.40 6.40 7.40
C 6.00 5.40 4.80
D 6.40 5.80 6.60
E 7.00 7.80 6.20
F 5.20 5.80 6.00
G 5.00 6.60 5.40
H 5.40 5.80 5.40
I 6.00 6.20 4.20
J 7.20 8.00 7.60
K 4.80 5.80 5.40
L 5.80 5.60 4.40
M 7.20 7.80 6.60
N 5.20 7.00 7.40
O 5.20 6.60 5.40
P 5.60 5.20 4.20
Q 8.00 7.60 6.20
R 7.40 6.00 5.60
S 8.00 7.80 3.00
T 7.40 8.40 5.60
U 7.40 7.80 5.60
V 6.20 7.00 5.80
W 6.00 7.80 3.60
X 7.40 7.00 4.60
 64

Next the Risk Priority Number and the Risk Score for each risk where calculated as
follows:-

Risk Priority Number=Probability of occurrence* Impact*Detectability

Risk Score= Probability of occurrence* Impact

TABLE 3.3

RPN & RS Calculated

Risk Priority Number Risk Score

A 474.24 59.28
B 350.46 47.36
C 155.52 32.40
D 244.99 37.12
E 338.52 54.60
F 180.96 30.16
G 178.20 33.00
H 169.13 31.32
I 156.24 37.20
J 437.76 57.60
K 150.34 27.84
L 142.91 32.48
M 370.66 56.16
N 269.36 36.40
O 185.33 34.32
P 122.30 29.12
Q 376.96 60.80
R 248.64 44.40
S 187.20 62.40
T 348.10 62.16
U 323.23 57.72
V 251.72 43.40
W 168.48 46.80
X 238.28 51.80
 65

Once the RPN and the RS have been obtained the RPN Paretto Graph was
plotted to determine the critical RPN number. Since there is no scientific rule to
determine the critical RPN number, it is assumed to be 250 in this case. In the actual
calculations performed in the industry, professionals are able to determine the critical
values based on their experience. Similarly the RS Paretto Graph was plotted and the
critical RS value was determined to be 40.

Fig 3.3 RPN Of All Identified Risks

 66

Fig 3.4 RS of All Identified Risks

Once the critical RPN and RS values where determined the scatter diagram of
the RPN verses RS was plotted and the point of intersection of the critical RPN and
critical RS values was marked on the graph as well.

The Risks that have a RPN and RS values higher than the critical values (as
indicated in the diagram) need to be of first priority in the risk response planning.

It may be noticed that sometimes although some risks have a high risk score,
since they can be detected early enough they are given a low detection value and
hence a low RPN.

F
Fig3.5 Scatter Diagram For All Identified Risks
 67

It may be noted that among the risks listed, schedule risks appear to be mostly
in the first priority area of the graph. Also it must be understood that all risks
irrespective of whether they are cost risks, quality risks, environment risks or safety
risks, will have an indirect impact on the schedule of the project and hence may delay
the project. While considering only the listed schedule risks, and performing the
RFMEA Technique, the following results were obtained.

Fig 3.6 RPN for Schedule Risks

Fig 3.7 RS for Schedule Risks

 68

Fig 3.8 Scatter Diagram for Schedule Risks

Here it is observed that the unforeseen site conditions, fuming-defuming cycle

time and the delays caused due to the break-down of machines are the major threat
towards completing a project within the given time frame, and hence they need to be
concentrated on with a practical approach.

3.1.3 RISK MITIGATION MEASURES

 Risk Factor: Unforeseen Site Conditions

Mitigation Measure: A list of all unforeseen site conditions which may occur during
the execution of the project is to be made. As per these conditions, backup plan or
restoration plan for every condition is to be made and should be ready to be executed
in case an unforeseen site condition has been encountered.

If a condition has been encountered which has not been listed, it should be dealt
with utmost care and expertise without any delay. There might be such situations and
one should be ready to handle them in the right way.
 69

 Risk Factor: Cycle Time (Defuming to defuming)

Mitigation Measure: Every step in the NATM method of tunnelling is of equal

importance. During the scheduling of every step of it, care is to be taken to avoid any
type of delay. The equipment and machinery which is to be used for each step of the
method is to be well maintained to avoid problems during execution. Spare equipment
is to be arranged for that type of machinery which is most prone to malfunctioning
during the time of execution. Any delay caused in the process is to be given
immediate attention and appropriate problem solving techniques are to be used.

 Risk Factor: Delay due to breakdown of machines

Mitigation Measure: All the equipment and machinery used in the project including
the ones used in the NATM method of tunnelling are to be well maintained and
serviced as per the servicing manuals and operated by the right skilled personnel.
Spare machinery is to be arranged for such machinery which are mostly prone to
malfunctioning or breakdowns.

 Risk Factor: Average Cycle time

Mitigation Measure: The average cycle time includes the cycle time and the lining
cycle time. Concrete supply to the lining process is to be ensured to be intermittent
and continuous. Batching plants should be ensured to be working at their designed
efficiency and any problem in them should be immediately rectified to ensure the free
flow of the process without any delays.

 Risk Factor: Tunnel road is in poor condition and this leads to delay of
activities and breakdown of equipments.

Mitigation Measure: As the laying of tunnel road is a part of the project, care is to be
taken during its laying so that it is of good quality and doesn’t deteriorate during
 70

usage. In case of any damages during the usage, it should be repaired immediately so
that it doesn’t cause any delays in the execution and doesn’t lead to any breakdown in
the equipments being used. Pot holes should be filled with muck and continuous use
of road roller should be done.

 Risk Factor: Delay in concreting is mainly due to non-availability and

breakdown of transit mixers.

Mitigation Measure: Proper planning of transit mixers at regular interval of time so

that continuous concreting operation can be achieved. Transit mixers are to be
maintained well and spare mixers are also to be arranged for contingency.

 Risk Factor: Transit mixers are not operating at their full capacity due to
high gradient near batching plant.

Mitigation Measure: As maintaining the gradient for transit mixer is a part of the
setting up of the transit mixers, care is to be taken to maintain proper gradient to avoid
decrease in efficiency of the mixer.

 Risk Factor: Private tippers are overloaded which may lead to accident
and also breakdown.

Mitigation Measure: As filling of the private tippers is done at the site and it is not a
result of some operation, care is to be taken to avoid their overloading. Drivers should
be instructed to carry load according to the permissible capacity of their equipment
and strict control over this is to be taken by weighing the tippers after loading. If this
simple step is avoided, it may lead to severe accidents in the site which is dangerous
and results in increased cost and time.
 71

 Risk Factor: Lining Cycle time

Mitigation Measure: The lining cycle time includes lining of the rock surface with
concrete after blasting. The main delay in this activity is due to the lack of continuous
supply of concrete. Care is to be taken to ensure continuous supply of concrete to the
lining process with the desired strength.

 Risk Factor: Formation of cold joints at many locations

Mitigation Measure: Continuous supply of concrete.

 Risk Factor: Due to low visibility stationary vehicles are not clearly
visible.

Mitigation Measure: Vehicles should be provided with reflectors so that they are
easily visible from far distance. Proper lighting inside the tunnel is to be arranged
inside the tunnel to ensure safety.

 Risk Factor: Some vehicles are observed moving without back light and
reverse horns.

Mitigation Measure: Pre-use inspection by concerned person should be done.

 Risk Factor: It has been observed that drivers are not wearing their
reflecting jacket while they come down from their vehicle inside the
tunnel.

Mitigation Measure: Use of PPE’s should be made mandatory even for drivers and a
proper check on this is to be maintained.
 72

 Risk Factor: Lack of safety signage inside the tunnel.

Mitigation Measure: Safety signs should be provided inside the tunnel in sufficient
number.
 73

CHAPTER 4

CONCLUSION

The construction industry in India is experiencing widespread delays. Due to a

dramatic shift in the capacity and volume of the Indian construction sector over the
last decade, the need of a systematic analysis of delays in the industry has become
crucial. A delay caused by a party may or may not affect the project completion date.
It can be caused by more than one party; or none of the parties. It may occur
concurrently with other delays and may impact the project completion, productivity or
cost and lead to contract termination.

In construction projects where time truly equals money, the management of

time itself has become very critical, thus predicting the likelihood of time-overrun
may play a key role towards project success. Hence project manager must be in a
position to identify and manage the delays before their occurrence in the project.

Various intricacies involved in construction industry have paved way for many
uncertainties in any project undertaken. Due to the uniqueness of each project, these
uncertainties may be introduced by the project stakeholders, statutory or regulatory
bodies and other intrinsic and extrinsic constraints. The study includes the
identification of various risks involved in different stages of a construction project,
the causes and impacts of these risks, analysis of the risks and some mitigation
measures to avoid the risks. The analysis of risks recognized in the case study leads to
the observation that among all the risks identified, schedule risks are the most difficult
to detect, have the highest probability of occurrence and have a huge impact on the
project. Hence they need to be focused on from the very beginning of the project and
continuously monitored.

This study gives the information about the practical problems involved in the
construction projects due to delays and further the risks associated with them. It has
been observed that all risks in a construction project might be schedule risks because
they are related to the schedule directly or indirectly. Hence the prerogative lies in
timely identification of those factors that lead to these delays, prioritizing them and
managing them efficiently.
 74

ANNEXURE

QUESTIONNAIRE

Respondent Details:

Name of the respondent: ..............................................................................................................

Name of the company working/worked for: ................................................................................

Designation: .................................................................................................................................

1. Have you worked on tunnel projects? If yes please mention the name of the project.

.....................................................................................................................................................

2. As compared to other projects do you think that tunnel projects involve a greater risk? If
yes please mention why.

.....................................................................................................................................................

3. What were the major difficulties faced by you during the project?

.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
....................................................

4. How did you and your team manage these difficulties?

.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
...................................................

5. What in your opinion are the major risks faced by any tunnel project in general?

.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
 75

6. Can you suggest some mitigation measures that may be followed in order to manage
these risks?

.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
.......................................................................................................................................................
...................................................

7. Kindly fill the attached sheet based on your experience of the probability of occurrence
of a risk, its impact and the detectability of the risk on a scale of 1- 10, 1 being the lowest
and 10 the highest.

I
M DETEC
PROBA P T-
LABEL RISKS BILITY A ABILIT
C Y
T

1. Schedule risks
A Unforeseen site conditions

B Cycle Time (de-fuming to de-fuming)

C Lining Cycle time

D Average Cycle time

E Delay due to breakdown of machines

Tunnel road is in poor condition and this leads to delay of

F
activities and breakdown of equipments.

Delay in concreting is mainly due non-availability and

G
breakdown of transit mixers.

Transit Mixers are not operating at their full capacity due

H
to high gradient near batching plant.

Private tippers are overloaded which may lead to accident

I
and also breakdown.

2. Cost Risks

J Unforeseen site conditions

 76

Transit Mixers are not operating at their full capacity due

K
to high gradient near batching plant.

Private tippers are overloaded which may lead to accident

L
and also breakdown.

3. Quality risks
M Excavation in Soft Ground/Poor Rock Mass Tunnelling

N Every step involved in the NATM Method of tunnelling.

O Formation of cold joints at many locations.

Transit Mixers are not operating at their full capacity due

P
to high gradient near batching plant.

Q Deformations in the rocks.

4. Environmental risks
Handling of explosive:
Excessive confinement of explosives is the leading cause
R of poor blasting results such as back break, ground
vibrations, air blast, unbroken toe, fly rock, and poor
fragmentation.
S De-fuming

5. Safety risks
Due to low visibility stationary vehicles are not clearly
T
visible
Some vehicles are observed moving without back light
U
and reverse horns
It has been observed that drivers are not wearing their
V reflecting jacket while they come down from their vehicle
inside the tunnel.

Private tippers are overloaded which may lead to accident

W
and also breakdown.

X Lack of safety signage inside the tunnel

THANKYOU
 77

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 78

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