Development of risk models for engineering construction projects

Risk and uncertainty in construction projects influence the time and cost of construction, the level of project benefits, and the overall economic viability of the project. Risk management could be considerably improved if Client, Contractor, and Consultant had easier and cheaper access to rigorous and credible risk analysis tools. To this end, a construction project risk analysis program for use on a microcomputer is developed. Having thus made this type of program available to a wider body of users, it is then used to validate the concept of risk analysis, to investigate the problem of correlation between risk variables, and to establish the credibility of risk analysis as a management tool. In order to improve the methods of analysing and presenting time and cost risks, a time-risk analysis program is also produced. This is used to examine the duration of the construction phase, and a method for analysing time and cost risk concurrently is developed. The results are presented in terms of 'probability contours' which quantify the probability of achieving values of both the cost and duration of a contract. In addition, since firms are usually involved with more than one project at a time, the concept of corporate risk is investigated; that is, risk arising from a portfolio of projects or contracts.