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To understand risk management, you must become familiar with the term "RISK."

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In the book Megaprojects and Risk    

   !"  (with Nils Bruzelius and
Werner Rothengatter) demonstrates that big ventures (big construction projects, big capital
investments, etc.) are highly risky. For instance, such ventures typically have high cost overruns,
benefit shortfalls, and schedule delays, plus negative and unanticipated social and environmental
impacts.

"Risks" are simply future issues that can be avoided or mitigated, rather than present problems that
must be immediately addressed.

The simple fact is that risk is always a probability issue. Possibility is a binary condition ² either
something is possible, or it·s not ² 100% or 0%. Probability reflects the continuum between absolute
certainty and impossibility. The key thing to keep in mind is that establishing probabilities is not the
same thing as foretelling the future.

In business Risk means of assessing risk vary widely between professions. Indeed, they may define
these professions; for example, a doctor manages medical risk, while a civil engineer manages risk of
structural failure. A professional code of ethics is usually focused on risk assessment and mitigation
(by the professional on behalf of client, public, society or life in general).

In the workplace, incidental and inherent risks exist. Incidental risks are those that occur naturally in
the business but are not part of the core of the business. Inherent risks have a negative effect on the
operating profit of the business.

Risk is the probability that a hazard will turn into a disaster. Vulnerability and hazards are not
dangerous, taken separately. But if they come together, they become a risk or, in other words, the
probability that a disaster will happen.

Nevertheless, risks can be reduced or managed. If we are careful about how we treat the
environment, and if we are aware of our weaknesses and vulnerabilities to existing hazards, then we
can take measures to make sure that hazards do not turn into disasters.

Risk management doesn't just help us prevent disasters. It also helps us to put into practice what is
known as sustainable development. Development is sustainable when people can make a good
living and be healthy and happy without damaging the environment or other people in the long
term. For instance, you can make a living for a while by chopping down trees and selling the wood,
but if you don't plant more trees than you cut down, soon there will be no trees and will no longer
have the means to make a living. So, it isn't sustainable.
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Risk management is a logical process or approach that seeks to eliminate or at least minimize the
level of risk associated with a business operation. Essentially, the process identifies any type of
situation that could result in damage to any resource within the possession of the company,
including personnel, then take steps to correct factors that are highly likely to result in that damage.
Risk management is an important concept that many employees, managers, and stakeholders refer to
when they are concerned about the effects of a certain move on reaching key objectives.

To deal with risk, risk management must plan for the risk, assess the risk, come up with options for
handling risk, and analyze risks in order to determine the ways in which they may change. In
addition to this, risk management must be capable of successfully documenting the complete risk
management system.

Risk management is important because it gives the ability to figure out methods for which events
can be managed, especially those events that may have an adverse impact on the financial or human
capital of the organization.

Risk management should always be thought of as a process which is continuous. Not only does it
allow one to assess risk, but it also gives us the ability to identify risk as well. By being able to assess
and identify risk, it becomes easier for one to prevent it from occurring, or to quickly address
adverse events if and when they do occur.

Risk management must be thought of as a very powerful strategic tool. It has been used in many
industries and organizations for years, but in recent decades, it has become more prevalent due to
international threats and the rapid growth of smaller organizations and companies.

One thing that all organizations must understand is that every one of them will face risks in one way
or another. Whenever an organization or individual has objectives to meet, they will risk their
resources when trying to reach these objectives. This is especially true when it comes to
commercial organizations, and risk management is a tool which will allow these risks to be managed
in an environment which is uncertain.

There are three primary goals that risk management offers to those who use it, and these three goals
are:

[ To combine concerns which are related to the risk of the organization's regular decisions,
and the creation of the implementation process.

[ To place a heavy emphasis on the allocation implications of resources.

[ To develop an understanding of both the trade offs as well as the opportunity costs that
come with any given decision.

Risk is defined as any thing which poses a threat to an organization. Risk management is the process
of dealing with these threats.

For the most part, these methods consist of the following elements, performed, more or less, in the
following order.

[ identify, characterize, and assess threats

[ assess the vulnerability of critical assets to specific threats
[ determine the risk (i.e. the expected consequences of specific types of attacks on specific
assets)
[ identify ways to reduce those risks
[ prioritize risk reduction measures based on a strategy

To understand the usage of risk management, one thing that one must always keep in mind is
that there are different types of risks. There are financial risks, process risks, intangible risks, time
risks, human risks, legal risks, and physical risks. Financial risk is the loss of funding or key
resources. Process risk involves risky business processes that could lead to project failure.

Intangible risks are often associated with any damage that is done to the reputation of the brand of
the organization. Time risks are risks which often involve things connected to time, such as delays or
opportunity costs which are missed.

A human risk involves any risks which are connected to humans, such as the loss of critical
employees or knowledge. Legal losses include government regulations, regulations which have an
adverse impact on the operations of the company. Physical risks involve the loss of physical
resources, and can include things such as equipment, buildings, or land. Disasters, whether they are
man made or natural, are the gravest threat to physical resources.
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A project must complete in predetermined time and quality according to limited budget. Therefore
the risk management of project is very important to succeed in project. One of the most important
steps in risk management process is identifying risk factors of a project. In this study, the important
risk factors are categorized into two main groups as internal factors and external factors. Each main
group consists of several factors. A prevalent problem that is investigated by researchers in project
risk management is specifying risks of threats to which the project is exposed.

Construction Project Management is the overall planning, co-ordination and control of a project
from inception to completion aimed at meeting a client·s requirements in order to produce a
functionally and financially viable project that will be completed on time within authorized cost and
to the required quality standards. Project management is the process by which a project is brought to
a successful conclusion.


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Once a project is defined and approval given, tracking the costs of construction materials
becomes an important variable in the delivery of a project within scope, schedule and
budget. The criticality of the cost of construction material for project cannot be undermined.

Considering the complexity of the job and to have a more scientific and systematic way of
performing the same the project owner / client may develop the electronic cost indices
comprising Cost index, costing database and software.

If during the operative period of the Contract as defined in condition ( i ) below, there shall
be any variation. The main variation into the cost of the material and other factors are given
below:

(1) Labour Component

(2) Material Component

(3) Petrol, Oil and Lubricants Component

(4) Bitumen Component

(5) HYSD & Mild Steel Component

(6) Cement Component

(7) C.I. and D.I. Pipes Component and etc.



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Time-bound project is constrained by hard deadlines in which the timing of the delivery is as
important as the delivery itself. Another way to put it is that if you deliver after the deadline,
 the delivery loses much of its value. Examples of hard deadlines include exhibition dates,
competitors· announcements, and government-imposed regulations.

As with many other projects, most time-bound projects start with more requirements than
developers can realistically handle within the imposed time constraints. As a result, they
often have to start slashing these requirements halfway through the project, resulting in
missed deadlines, customer frustration, and wasted effort.

A better approach is to deÀne requirement priorities prior to starting a project and then
allocate their development to successive releases of the project. With this approach, ever
under severe adversity, the development team can guarantee delivery of the most important
requirements by the deadline while still having a fair chance of completing less important
requirements.

But failing to prioritize requirements is not the only reason that projects miss deadlines. The
inability of traditional planning methods to deal with the uncertainty of estimates on which
the plans are based and the failure to recognize that development work does not progress in
linear fashion (the infamous 90- percent-complete syndrome) are also to blame.

Traditional critical-path calculations that attempt to address development uncertainties tend

to produce considerably shorter schedules than what is realistic. With a shorter schedule as a
starting point, being late often occurs almost by deÀnition. The second problem, assuming
that a task progresses at a constant rate, prevents project managers from seeing the early
signs of delay until it is too late to take any other action except to trim features, compromise
on quality, or reschedule the project.

Statistically Planned Incremental Deliveries (SPID) addresses these problems by combining

ideas from critical chain planning, incremental development, and rate monitoring into a
practical method for planning and executing time-bound projects. SPID focuses on how
best to organize a project to guarantee delivery of at least a working product with an agreed
subset of the total functionality by the required date.

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A toll road (or tollway, turnpike, toll highway or an express toll route) is a privately or
publicly built road for which a driver pays a toll (a fee) for use. Structures for which tolls are
charged includetoll bridges and toll tunnels. Non-toll roads are financed using other sources
of revenue, most typically fuel tax or general tax funds. The building or facility in which a
toll is collected may be called a toll booth, toll house, toll plaza, toll station, toll bar or toll
gate. This building is usually found on either side of a bridge and at exits.

Three systems of toll roads exist: open (with mainline barrier toll plazas); closed (with
entry/exit tolls) and all-electronic toll collection (no toll booths, only electronic toll
collection gantries at entrances and exits, or at strategic locations on the mainline of the
road).
 On an open toll system, all vehicles stop at various locations along the highway to pay a toll.
While this may save money from the lack of need to construct tolls at every exit, it can cause
traffic congestion, and drivers may be able to avoid tolls (shunpiking) by exiting and re-
entering the highway.

Toll roads have been criticized as being inefficient in various ways:

[ They require vehicles to stop or slow down, manual toll collection wastes time and raises
vehicle operating costs.

[ Collection costs can absorb up to one-third of revenues, and revenue theft is considered
to be comparatively easy.

[ Where the tolled roads are less congested than the parallel "free" roads, the traffic
diversion resulting from the tolls increases congestion on the road system and reduces its
usefulness.

[ By tracking the vehicle locations, their drivers are subject to an effectual restriction of
their freedom of movement and freedom from excessive surveillance.

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A construction permit or building permit is a permit required in most jurisdictions for
new construction, or adding on to pre - existing structures, and in some cases for major renovations.
Generally, the new construction must be inspected during construction and after completion to
ensure compliance with national, regional, and local building codes. Failure to obtain a permit can
result in significant fines and penalties, and even demolition of unauthorized construction if it
cannot be made tomeet code.