Troubled projects in constructions due to inadequate risk management

Abstract

“It was the failure of risk management that led to the Columbia disaster," STS-114 mission specialist Andrew Thomas told Australian reporters via NASA TV. This thesis will focus on troubled projects in construction due to inadequate and insufficient Risk Management. The author has chosen this topic because his vision is one day to work on troubled turnaround projects” sector in a company. The main objective of the present document is not to propose a radically renewed risk management process, but to attempt a composition of already known processes, at such way that it can be applied by the modern enterprises that deal with the undertaking or/and implementation of constructional work. This thesis will try to reveal the main sources for the failure of a construction project due to the lack of risk management in projects, aiming that from now on the risk management matters will be considered more serious and professional. The benefits of risk management are not confined to large or risky projects. The process may be formalaized in these circumstances, but it is applicable for all scales of project and procurement activity. It can be applied at all stages in the project cycle, from the earliest assessments of strategy to the supply, operation, maintenance and disposal of individual items, facilities or assets. It has many applications, ranging from the evaluation of alternative activities for budgets and business plans, to the management of cost overruns and delays in projects and programs. Risk management will also provide benefits in better accountability and justification of decisions, by providing a consistent and robust process that supports decision-making. The author examined existing data, results and extensive bibliographies, drew several outcomes and created a checklist for all those who are involved in construction project disasters. The author’s expectation is to be realistic; there is not a magic wand that will turn a fiasco into a triumph. However, a more positive outcome is possible, if we see the threats as opportunities and we try to learn from the trouble project.