ORIANA

R e s d e n t i al V I l l a s

2018

Chapter 10 : Risk Management

Risk Management
Introduction:

- For years industry has had a very poor reputation for coping with the adverse effects of
change, with many projects failing to meet deadlines, cost and quality targets. This is not
too surprising considering that there are no known perfect engineers, any more than
there are perfect designs or that the forces of nature behave in a perfectly predictable
way. Change cannot be eliminated, but by applying the principles of risk management,
engineers are be able to improve the effective management of this change.
Change is normally regarded in terms of adverse effects on project cost and programs.
In extreme cases the risk maybe turning a potentially profitable investment into a loss-
making venture. A risk event implies that there is a range of outcomes for the event
which be both more and less favorable than the most likely outcome, and that each
outcome within the range has a probability of occurrence. The combinations of risks can
be termed as “Project Risks”.

- So “Risk” can be defined as :

a. It’s uncertain events or condition that, if occurs may has a positive or negative effect on
at least one project objective.
b. It’s a potential problems that may affect successful completion of project.

- There are three types of risk –according to the source & impact- can be show as follow.

Risk

Known source Known source UKnown source

known impact Unknown impact Unknown impact
- Not every “Risk” is a problem or a loss but there are many terminology of risk like :
a. Threats :
Risks that will have a negative impact on a project objectives if it occurs.

b. Opportunities :
Risks that will have a negative impact on a project objectives if it occurs.

c. Residual Risks :
Risks that remains even after developing responses to the project’s original risks.

d. Secondary Risks :
Risks caused by responses to the project’s original risks.

Risk
terminology

secondary
threats opportunities residual risks
risks
 Risk management
Is a structured way to think about risk an how to deal with in a systematic process of
planning, identifying, analyzing, responding to and monitoring project risk.
The response that must be taken is Managing Risks to increase opportunities to
improve the project’s objectives with lower cost, shorter schedule, enhanced scope and
higher quality. And decrease threats that has negative events on project scope, cost,
schedule and quality.

Planning

Monitoring Identifying

Risk
management

Responding Qualitative

Quantative
1. Risk management Planning :
It’s the process of deciding how to approach and conduct the risk management
activities for the project.

2. Risk Identification :

 It’s the process of determining which risks may affect the project and documenting
their characteristics.

 Tools of Risk Identification :

a. Documentation review
b. Information gathering :
- Brain storming
- Interviewing
- Delphi technique
- Root cause analysis

 Check list analysis

 Expert judgment

 Diagramming techniques :
a. Causes and effect diagrams
b. Flow chart
And by using one of the tools of risk identification (brain storming) we can collect many
categories of risks as:

Risk Cateogry

Project Construction
Enviromenta Organizitional Engineering
Design Risks External Risks Management
Risks Risks Risks Services Risks
Risks
3. Qualitative risk analysis :
It’s the process that assesses the impact and likelihood of the identified risks and
develops prioritized lists of these risks for further analysis.

probability (likelihood) synonyms approximate %

very high almost certain ≥ 81

high likely 80

medium possible 50

low unlikely 40

very low rare 20

impact (consequences) synonyms approximate

very high very critical ≥ 10

high critical 8

medium moderate 4

low normal 2

very low very normal <1

 100% 1 2 3 4 5 6 7 8 9 10 C

90% 0.9 1.8 2.7 3.6 4.5 5.4 6.3 7.2 8.1 9

80% 0.8 1.6 2.4 3.2 4 4.8 5.6 6.4 7.2 8 high

70% 0.7 1.4 2.1 2.8 3.5 4.2 4.9 5.6 6.3 7
Probability%

60% 0.6 1.2 1.8 2.4 3 3.6 4.2 4.8 5.4 6

M

50% 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

40% 0.4 0.8 1.2 1.6 2 2.4 2.8 3.2 3.6 4

low
30% 0.3 0.6 0.9 1.2 1.5 1.8 2.1 2.4 2.7 3

20% 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2

10% 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 V.L

1 2 3 4 5 6 7 8 9 10

Impact
 Evaluating Impact of a Risk on Major Project Objectives

Impact <1 2 4 8 ≥ 10

delivery
delivery delivery
plan and
plan and plan and delivery plan
Insignificant milestone
milestone milestone and milestone
Time schedule
delay delay of
delay of
delay outside
seepage more
within one fiscal year
than one
quarter quarter
quarter
Objective

Insignificant < 5 % 5 - 10 % 10 - 20 %
> 20 % cost
Cost cost cost cost cost
increase
increase increase increase increase

Sponsor
changes changes does not
in cost in cost agree
scope scope does not
limits limits that.
decrease is meet the
Scope barely
with with 5 - scope
purpose and
<5% 10 % meet the
noticeable needs
cost cost purpose
increase increase and
needs
That had been checked by Eng. Nourhan a technical office engineer as following:

Design Risks
Exist OR
Risk Name Probability % Impact Rank
Not
R1:Design incomplete Exist 30 (unlikely) 6 1.8

R2:Unexpected geotechnical or groundwater

Exist 30 (unlikely) 7 2.1
issues

R3:Inaccurate assumptions on technical

Exist 45 (possible) 4 1.8
issues in planning stage

R4:Surveys incomplete Exist 40 (possible) 3 1.2

R5:Changes to
Exist 50 (possible) 8 4
materials/geotechnical/foundation

R6:Bridge site data incomplete to DES ---- ---- ---- ----

R7:Hazardous waste site analysis incomplete ---- ---- ---- ----

R8:Unforeseen design exceptions required Exist 20 (unlikely) 5 1

R9:Consultant design not up to Department

standards ---- ----

R10:Unresolved constructability items Exist 10 (rare) 10 1

R11:Complex hydraulic features ---- ----

R12:Unable to meet Americans with

Disabilities Act requirements ---- ----
R13:Project in a critical water shortage area
Not exist 0 (rare) 0 0
and a water source agreement required

R14:Incomplete quantity estimates ---- ----

R15:Unforeseen construction window and/or
Exist 30 (unlikely) 2 0.6
rainy season requirements

R16:New or revised design standard Exist 30 (unlikely) 5 1.5

 External Risks
Exist
Risk Name Probability % Impact % Rank
OR Not
R17:Landowners unwilling to sell ---- ----
R18:Local communities pose objections Exist 30 (unlikely) 2 0.6

R19:Unreasonably high expectations from

Exist 40 (possible) 7 2.8
stakeholders

R20:Political factors or support for project

changes ---- ----
R21:Stakeholders request late changes Exist 80 (almost certain) 10 8

R22:New stakeholders emerge and request

Exist 60 (likely)
changes

R23:Threat of lawsuits ---- ----

R24:Increase in material cost due to market
Exist 70 (likely) 9 6.3
forces

R25:Water quality regulations change ---- ----

R26:New permits or additional information
Exist 60 (likely) 6 3.6
required

R27:Reviewing agency requires longer than

expected review time ---- ----

R28:Changes to storm-water requirements ---- ----

R29:Permits or agency actions delayed or
take longer than expected ---- ----

R30:New information required for permits ---- ----

R31:Environmental regulations change ---- ----

R32:Controversy on environmental grounds
expected ---- ----
R33:Pressure to deliver project on an
Exist 20 (unlikely) 5 1
accelerated schedule

R34:Labor shortage or strike Exist 30 (unlikely) 5 1.5

R35:Construction or pile driving noise and

vibration impacting adjacent businesses or Exist 50 (possible) 4 2
residents
 Environmental Risks
Exist
Risk Name Probability % Impact % Rank
OR Not

R36:Environmental analysis incomplete Exist 45 (possible) 4 1.8

R37:Availability of project data and

mapping at the beginning of the Exist 30 (unlikely) 7 2.1
environmental study is insufficient

R38:New information after Environmental

Document is completed may require re-
Exist 45 (possible) 6 2.7
evaluation or a new document (i.e. utility
relocation beyond document coverage)

R39:New alternatives required to avoid,

mitigate or minimize impact ---- ----

R40:Acquisition, creation or restoration of

on or off-site mitigation ---- ----

R41:Environmental clearance for staging

or borrow sites required ---- ----

R42:Historic site, endangered species,

riparian areas, wetlands and/or public park ---- ----
present

R43:Design changes require additional

Exist 45 (possible) 10 4.5
Environmental analysis

R44:Project may encroach onto a Scenic

Highway ---- ----

R45:Unanticipated noise impacts Exist 25 (unlikely) 5 2.5

R46:Unanticipated cumulative impact

Exist 25 (unlikely) 4 2
issues
 Project Management Risks
Exist
Risk Name Probability % Impact % Rank
OR Not
R47:Project purpose and need is not well-
Not exist 0 (rare)
defined

R48:Project scope definition is incomplete Not exist 0 (rare)

R49:Project scope, schedule, objectives,

cost, and deliverables are not clearly Not exist 0 (rare)
defined or understood

R50:No control over staff priorities Exist 10 (rare) 5

R51:Consultant or contractor delays Exist 70 (likely) 4

R52:Estimating and/or scheduling errors Exist 30 (unlikely) 6

R53:Unplanned work that must be

Exist 40 (possible) 7
accommodated

R54:Lack of coordination/communication Exist 40 (possible) 5

R55:Underestimated support resources or

Exist 20 (unlikely) 3
overly optimistic delivery schedule

R56:Scope creep ---- ----

R57:Unresolved project conflicts not
escalated in a timely manner ---- ----
R58:Unanticipated escalation in right of
Exist 50 (possible) 5
way values or construction cost

R59:Delay in earlier project phases

jeopardizes ability to meet programmed Exist 20 (unlikely) 3
delivery commitment

R60:Added workload or time requirements

Exist 20 (unlikely) 2
because of new direction, policy, or statute

R61:Local agency support not attained ---- ----

R62:Public awareness/campaign not
planned ---- ----

R63:Unforeseen agreements required ---- ----

R64:Priorities change on existing program Exist 20 (unlikely) 1

R65:Inconsistent cost, time, scope, and

quality objectives ---- ----
 Organizational Risks

Exist OR Probability
Risk Name Impact % Rank
Not %

R66:Inexperienced staff assigned Exist 25 (unlikely) 4

R67:Losing critical staff at crucial point

Exist 15 (unlikely) 7
of the project

R68:Insufficient time to plan Exist 30 (unlikely) 5

R69:Unanticipated project manager

Exist 10 (rare)
workload

R70:Internal “red tape” causes delay

getting approvals, decisions ---- ----

R71:Functional units not available,

overloaded ---- ----

R72:Lack of understanding of complex

Exist 30 (unlikely) 3
internal funding procedures

R73:Priorities change on existing

Exist 20 (unlikely)
program 2

R74:Inconsistent cost, time, scope and

quality objectives ---- ----

R75:Overlapping of one or more project

Exist 20 (unlikely) 5
limits, scope of work or schedule

R76:Funding changes for fiscal year ---- ----

R77: Lack of specialized staff (biology,

anthropology, geotechnical, archeology, ---- ----
etc.)

R78:Capital funding unavailable for

right of way or construction ---- ----
 Construction Risk
Exist OR Probability
Risk Name Impact % Rank
Not %
R79:Inaccurate contract time estimates Exist 40 (possible) 3

R80:Permit work window time is

Exist 40 (possible) 4
insufficient

R81:Change requests due to differing

Exist 35 (possible) 5
site conditions

R82:Temporary excavation and shoring

not exist 0 (rare) 2
system design is not adequate

R83:Falsework design is not adequate ---- ----

R84:Unidentified utilities Not exist 0 (rare)

R85:Buried man-made
---- ----
objects/unidentified hazardous waste

R86:Dewatering is required due to

---- ----
change in water table

R87:Temporary construction easements

Not exist 0 (rare)
expire

R88:Electrical power lines not seen and

---- ----
in conflict with construction

R89:Street or ramp closures not

---- ----
coordinated with local community

R90:Insufficient or limited construction

Not exist 0 (rare)
or staging areas
R91:Changes during construction
require additional coordination with ---- ----
resource agencies
R92:Late discovery of aerially deposited
---- ----
lead

R93:Experimental or research features

Exist 30 (unlikely) 6
incorporated

R94:Unexpected paleontology findings ---- ----

R95:Delay in demolition due to sensitive

---- ----
habitat requirements or other reasons

R96:Long lead time for utilities caused

by design and manufacture of special Exist 40 (possible) 5
components (steel towers or special pipe)
 Engineering Services Risks
Exist OR Probability
Risk Name Impact % Rank
Not %
R97:Foundations utilizing Cast-In-
Drilled-Hole or Cast-In-Steel-Shell pile
30” in diameter or greater may require
---- ----
tunneling and mining provisions within
the contract documents and early
notification of Cal-OSHA
R98:Hazardous materials in existing
structure or surrounding soil; lead
Exist 20 (unlikely) 3
paint, contaminated soil, asbestos pipe,
asbestos bearings and shims
R99:Access to adjacent properties is
necessary to resolve constructability Exist 35 (possible) 6
requirements
R100:Existing structures planned for
modification not evaluated for seismic
---- ----
retrofit, scour potential and structural
capacity
R101:Foundation and geotechnical
tasks (foundation drilling and material
Not exist 0 (rare)
testing) not identified and included in
project work plan
R102:Verify that all seasonal
constraints and permitting
Exist 65 (likely) 7
requirements are identified and
incorporated in the project schedule
R103:Complex structures hydraulic
design requiring investigation and ---- ----
planning
R104:Assumptions upon which the
Advance Planning Study is based on
are realistic and verification of these Exist 40 (possible) 5
assumptions prior to completion of the
Project Report
R105:Design changes to alignment,
profile, typical cross section, stage
construction between Advance Exist 40 (possible) 7
Planning Study and the Bridge Site
Submittal
R106:Unexpected environmental
constraints that impact villa Exist 65 (likely) 2
construction
R107:Unforeseen aesthetic
Exist 50 (possible) 4
requirements
R108:Delay due to permits or
agreements, from Federal, State, or
Exist 20 (unlikely) 3
local agencies for geotechnical
subsurface exploration
R109:Delay due to Right-of-Entry
agreements for geotechnical subsurface Exist 20 (unlikely) 5
exploration
R110:Delay due to traffic management
and lane closure for geotechnical Exist 20 (unlikely) 3
subsurface exploration
 Summary:
Design Risks
Exist OR Probability
Risk Name Impact Rank
Not %
Design incomplete Exist 30
3
Unexpected geotechnical or
Exist 30
groundwater issues
2
Inaccurate assumptions on technical
Exist 45
issues in planning stage
4

Surveys incomplete Exist 40

5
Changes to
Exist 50
materials/geotechnical/foundation
3

Unforeseen design exceptions required Exist 20

5

Unresolved constructability items Exist 10

5
Project in a critical water shortage area
Not exist
and a water source agreement required

Unforeseen construction window and/or

Exist 30
rainy season requirements
3

New or revised design standard Exist 30

4

External Risks
Exist OR Probability
Risk Name Impact Rank
Not %
Local communities pose objections Exist 30
5
Unreasonably high expectations from
Exist 40
stakeholders
3

Stakeholders request late changes Exist 80

2

New stakeholders emerge and request

Exist 60
changes
7
Increase in material cost due to market
Exist 70
forces

New permits or additional information

Exist 60
required

Pressure to deliver project on an

Exist 20
accelerated schedule

Labor shortage or strike Exist 30

Construction or pile driving noise and

vibration impacting adjacent businesses Exist 50
or residents

Project Management Risks

Exist OR Probability
Risk Name Impact Rank
Not %
No control over staff priorities Exist 10
5

Consultant or contractor delays Exist 70

5

Estimating and/or scheduling errors Exist 30

6
Unplanned work that must be
Exist 40
accommodated
4

Lack of coordination/communication Exist 40

4
Underestimated support resources or
Exist 20
overly optimistic delivery schedule
2
Unanticipated escalation in right of way
Exist 50
values or construction cost
5

Delay in earlier project phases

jeopardizes ability to meet programmed Exist 20
delivery commitment
4
Added workload or time requirements
because of new direction, policy, or Exist 20
statute 3

Priorities change on existing program Exist 20

6
 Organizational Risks

Exist OR Probability
Risk Name Impact Rank
Not %

Inexperienced staff assigned Exist 25

3
Losing critical staff at crucial point of
Exist 15
the project
6

Insufficient time to plan Exist 30

Unanticipated project manager

Exist 10
workload
2

Lack of understanding of complex

Exist 30
internal funding procedures
2

Priorities change on existing program Exist 20

3
Overlapping of one or more project
Exist 20
limits, scope of work or schedule
2

Engineering Services Risks

Exist OR Probability
Risk Name Impact Rank
Not %
Hazardous materials in existing
structure or surrounding soil; lead
Exist 20
paint, contaminated soil, asbestos pipe,
asbestos bearings and shims 3
Access to adjacent properties is
necessary to resolve constructability Exist 35
requirements 4
Verify that all seasonal constraints and
permitting requirements are identified Exist 65
and incorporated in the project schedule 3
Assumptions upon which the Advance
Planning Study is based on are realistic
and verification of these assumptions Exist 40
prior to completion of the Project
Report 4
Design changes to alignment, profile,
typical cross section, stage construction
Exist 40
between Advance Planning Study and
the Bridge Site Submittal 2
Unexpected environmental constraints
Exist 65
that impact villa construction
6
 Unforeseen aesthetic requirements Exist 50

Delay due to permits or agreements,

from Federal, State, or local agencies Exist 20
for geotechnical subsurface exploration

Delay due to Right-of-Entry agreements

Exist 20
for geotechnical subsurface exploration

Delay due to traffic management and

lane closure for geotechnical Exist 20
subsurface exploration

Environmental Risks
Exist OR Probability
Risk Name Impact Rank
Not %

Environmental analysis incomplete Exist 45

Availability of project data and mapping

at the beginning of the environmental Exist 30
study is insufficient

New information after Environmental

Document is completed may require re-
evaluation or a new document (i.e. Exist 45
utility relocation beyond document
coverage)
6

Design changes require additional

Exist 45
Environmental analysis

Unanticipated noise impacts Exist 25

Unanticipated cumulative impact issues Exist 25

2
 Construction Risk
Exist OR Probability
Risk Name Exist OR Not Rank
Not %
Inaccurate contract time estimates Exist 40

Permit work window time is insufficient Exist 40

Change requests due to differing site

Exist 35
conditions

Experimental or research features

Exist 30
incorporated
Long lead time for utilities caused by
design and manufacture of special
Exist 40
components (steel towers or special
pipe)
4. Quantitative Risk analysis :

It’s the process that makes numerically estimates the probability that a
project will meet its cost and time objectives. Quantitative analysis is
based on a simultaneous evaluation of the impacts of all identified and
quantified risks.

(Using Primavera Risk Analysis & @RISK)

Primavera Risk Analysis