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Chapter 5: Risk Management plan:

Emar Pakistan is one of the leading construction groups in Pakistan and is engaged in many
construction projects all around the country. Due to high number of projects, there are
many risks occurring during their construction projects. The project managers have faced
many problems at different stages of construction projects due to different types of risks.
This dissertation was focusing to assess different types of risks during construction projects
of developing countries. The company itself belongs to a developing country and focuses
more to analyse different kinds of risks and their proper assessment. This dissertation
provided details about different kinds of risks in literature review and adopted the
methodology to identify different kinds of risks and techniques for their countermeasure.
The main findings of analysis showed that construction projects of developing countries are
facing additional risks during their projects such as country inflation, tax increase, political
instability, war, outdated equipments, terrorism, incompetency of risk managers, change in
policies and lack of knowledge. Therefore, it is required to implement a error less risk
management system before starting the projects and maintain it throughout the
construction projects with certain actions in finding different risks.
There was brief discussion with the senior project managers of Emar Pakistan and it was
clearly noticed that they had a very weaker risk management system in their company. The
managers were not conducting risk assessments before planning for any construction
project. They were only considering the past experiences of their managers for dealing with
different kind of risks during the construction projects. Therefore, many of their projects
were delayed and were not able to fulfil all the requirements of their clients. Also, the
company was not able to manage their cost and waste during their construction projects.
Therefore, it was required to replace their formal risk management system by introducing
different kind of tools and techniques that can boost their performance by minimizing
different risks at all stages of construction projects. The risk management plan can be
implemented at all stages of construction projects, but provides better results if
implemented at the start of the construction project.


5.1 Risk Management Plan:
The risk management plan for Emar Pakistan was designed after reviewing all the
information provided in literature review and techniques highlighted through questionnaire
results. This risk management plan was designed after considering all the requirements of
sponsor and follows all the standards that can be implemented in any construction
organisation. This risk management plan consists of 6 major steps that can be efficiently
used for identifying, analysing and removing different kind of risks during the construction
projects of Emar Pakistan. The given below figure 5.1 is showing the risk management plan
for Emar Pakistan with 6 different stages that can be implemented at all stages of
construction projects.

Figure 5.1: Risk Management Plan for Emar Pakistan
5.1.1 Step for identifying project objectives:
The project objectives plays a vital role for construction projects and it is the duty of senior
project managers to explain these project objectives to all the stakeholders well before the
start of construction projects. This can be done either by general body meetings or project
reports. Beside the explanation of construction project objectives, the senior managers
should also discuss all the project objectives with their defined team members through
brainstorming or other techniques. This discussion will remove errors and will provide
better project objectives from the experiences of team members. The project objectives
should also consider the budget, project plan and quality level of construction projects. The
meetings can be conducted to define certain tools and techniques that will be used during
the construction projects. There should be meetings with main focus on integrating
different risks during construction projects though proper project schedules, proper
financial planning, workers safety and proper management of quality during construction
projects.
5.1.2 Step for forming risk management team:
The senior managers should form a risk management team that includes employees from all
the departments of Construction Company. This risk management team should include
experienced professional with more experience in construction projects. This team should
include employees and project managers from all active departments such as design team,
finance, human resources, technical experts, engineers, quality control, legal advisors and
architects. The combination of experts from all departments will provide major
achievements for completing the objectives of construction projects. Although, there may
be some difficulties due to the diverse nature of risk management team, but initiating the
process of risk management at start of construction projects and monitoring it throughout
the construction project can provide better results.
5.1.3 Step for implementing risk management techniques:
The risk management teams should identify all kind of risks at their early stages and can
perform certain actions to minimize or remove these internal and external risks from
construction projects. The risk management team can use different tools and techniques
such as brainstorming, probability impact analysis, SWOT analysis, Decision tree, PRINCE 2
and many others for identifying risks from all the sources in construction projects. The
analysis of this dissertation highlighted brainstorming as best technique for identification of
risk management system and recommends Emar Pakistan to adopt this technique for
getting benefits from freely expressed ideas of their employees from all departments of
company. Beside different techniques, the risk management team should adopt certain
strategies in their companies that can help in minimizing different risks in construction
projects. Also, combination of different risk management techniques with different
strategies of construction companies can provide better results for dealing with risks from
all sources.
5.1.4 Step for analysing the probability of risks:
After successfully identifying different risks during construction projects, the risk
management team can analyse the probability and impact of different risks on project
objectives. The risk management team should maintain the histories of different risks and
based on these histories can defined certain priorities for different kind of risks in
construction projects. This can be done by using different techniques such as Monte Carlo
technique, Probability Impact grid analysis and decision tree analysis. This dissertation was
using probability grid analysis technique to check the probability of different risks.
Therefore, this technique is recommended to Emar Pakistan for maintain histories of certain
risks and defining certain priorities depending on the probability and impact of risks in
construction projects. The high priority should be given to risks with high probability and
severe impacts on construction projects. Although, these techniques requires special skills
and trainings that should be properly provided to risk management team.
5.1.5 Step for formulating risk response strategy:
The risk management team should select the risk response strategy after thoroughly
checking all the aspects involved with risks in construction projects. Although, these
strategies vary for different kind of risks and situation at which these risks occur during the
construction projects. But the risk management team should define such strategy that
should focus on both risk reduction and risk transfer. Also, they should collaborate
efficiently with all the stakeholders to minimize different kind of risks and for deploying
certain strategies in construction projects. The risk response strategy should consider the
establishment of efficient risk management system, provision of training for risk
management and proper documentation of risk histories depending on their probability and
impacts in construction projects.
5.1.6 Step for monitoring risks:
The success of risk management system is depending on the monitoring of different risks
throughout the life cycle of construction projects. The risk management team should focus
on monitoring these tools, in order to remove them at their early stages and alert certain
departments on any unlikely events during the construction projects. Beside monitoring
risks, the company should focus on providing sufficient training to their employees for
properly using risk management system and policies of risk management system. The
company should consider different modern and updated tools and techniques that can
improve the performance of their construction projects.