Question

For a construction project, assume the role of the sponsor and:

(a) List 3 major risk categories that the project might face from the point of view of the sponsor

(b) For each category that you have defined above list one risk that the project might face

(c) For each of the risks that you have listed analyze those risks in terms of probability and impact , and present your results of (a), (b) and (c ) in a risk register

(d) Draw a diagram representing the ranking of the risks

(e) Suggest how you are going to deal with the different risks in accordance with their ranks on the diagram. Add your proposed action to the risk register.

Answer 1

a - 3 major risk categories that project might face from the pont of view of the sponsor are

1. Financial Risk - This is one of the major risk that a sponsor can get. Poor estimation may lead to cost escalation.

2. Legal Risk - Upon project completion or in the course, improper project management and violation of legal obligations can lead to legal issues for the sponsor.

3. Operational Risk - Poor implementation and process problems may lead to risks for the sponsor.

b - Cost Risk - This risk may lead to budget and monetary risks. The sponsors may have to pay more or have to put hold on the project.

Legal Risk - Legal risks may lead to legal issues and cases which may result in loss of money and stoppage of work and processes.

Operational Risk - This risk can lead to various problems and disasters, which might lead to bad reputation and even legal issues. If a construction fails due to poor operation, it may lead to various problems along with monetary loss, legal problems, reputation etc.

NGAL Medium Mdium Risk4 O.5 and Cash Rusx (b) RisK () in ond eh High Low

e - In accordance with the ranks, you can deal with them by the following ways:

1. For risk (a), the best way to deal with this risk is to keep extra money prepared for when the risk arrives.

2. For risk (b), the best way to deal with this risk is abiding all the legal rules and policies so that when any legal issues arrive, it can be easier to come out of it.

3. For risk (c), the best way to deal with this risk is by changing the operational way and examining why the risk occured and understand all the problems and then move forward rectifying all of them.

Proposed actions are:

1. Conducting proper estimation and costing with taking care of additional costs and charges.

2. Taking care of all the legal parameters.

3. Manage all the operations properly and in order with the best components and products.