Risk Management in Highway Projects

Abstract

Construction industry is the key of development to any country in present scenario. It involves various uncertainties and risk associated with different aspects and at different level of execution which has to be identified and monitored properly as it can have a huge impact on the project objectives ( scope, time , cost etc.). In consideration of the same if any kind of wastage of resources takes place that will result in huge monetary losses. These losses are due to various types of risk associated with such development projects. A crucial role is played by these risks for the completion of project successfully within the time schedule and allotted budget. Thus a risk management strategy is very essential to identify, analyse, plan risk response and monitor and control the project. The objectives of risk management are to increase the probability of positive events and to reduce the consequences of negative events by identifying and analysing the different risk factors occurring in a particular project before hand and take suitable actions to reduce their impact on project objectives. Indian transportation industry contributes largely to its economy and has second largest road network in the world accounting of 4.7 million kilometres and also planning commission of India plans to spend nearly 20 % of total investment of USD 1 trillion during the 12th Five year plan (2012-2017) to develop roads. Thus delay in the Highway projects can effect the economy of the country in huge manners. Thus the aim of this study is to identify the risk factors associated with the highway constructions in India and to find the critical factors by analysing the identified factors based on ratings obtained through a Questionnaire survey circulated among different consultants, contractors, supervisors, involved in highway construction industry and to suggest mitigation techniques to reduce the impact of these risk involved in construction of highways in India to boost the economy to meet the increasing demand of roads and highway of the increasing population. An attempt to present a systematic approach to calculate the impact of risk at activity level and project level has also been done using the @Risk software in which activity time allowance at activity and project has been calculated considering the different percentage of occurrence of risk at activity level and project level.