Risk management has become very important these days and has become a challenge in the construction industry. The management of risk is very important and different tools should be used for managing and mitigating risk in the organization. The purpose of this paper is to analyze and study the methods and sources of construction project risk. This will also include how to avoid and mitigate the construction project risk. The main disastrous failures that can take place either during the construction project or after its completion will be discussed, which will include the approach to reduce / mitigate and avoid risk.
Risk is normally viewed as a negative term. According to various dictionaries risk is expressed as something exposing to danger or haphazard. Risk is seen as a mix of danger and opportunity. Risk is present everywhere, in all aspects of life and management of risk needs to be done. It is a tradeoff between the future or expected reward and an upcoming danger. In projects especially in construction, risk is related to a certainty during the construction or process or after its completion. Risk itself seems a very smaller term though its impact is very large. It is also a part of human activities hence it is universal. It is a part of decision making process. For example; during the construction of Burj Khalifa proper raw materials should be used of high quality, it needs to verify a lot of things due to the risk associated with it.
Risk management is an effort and more like a challenge to identify where it is present, measure and monitor it closely and then managing the uncertainty or danger that might occur (Reichheld, 2001). Constructors and construction companies should use Risk Management tools to promote safety against the risk of loss and to come up with a more comprehensive approach to manage and estimate risk in the construction process.
Since the Burj Khalifa (considered as the crown jewel) was an important project that took place in the UAE which was formerly known as the Burj Dubai. It is the tallest building in the UAE owned by Emaar Properties along with the biggest construction company of the world namely, Turner Construction Company. The construction took place in the year 2004 and ended in the starting of the year 2010 (Bianchi & Critchlow, 2010). It took almost six years to complete this project and soon after its completion there were a lot of problems observed as discussed for instance the elevator issue and electricity breakdown.
Sources of Construction Project Risk
The construction projects are unique and give rise to a lot of risks from different sources. These projects are not simpler, involves more time and feedback from different consultants. A lot of participants, individuals and organizations are actively involved in the construction project, and ...