NATIONAL UNIVERSITY OF SCIENCE

AND TECHNOLOGY

MSc Construction Project

Management

Risk Management Group

Assignment
GROUP 3 MEMBERS: Tatenda Shanyika N01910599C
Lewis Matandaware N01910601Y
Farai Poromondo N01910626P
Edmore Mundida N019 10616W
Joseph Zvareva N01910634K
Shepherd Nhanga N01910621A

LECTURER: Mrs Manyangarirwa

Question 1- Using a Project of your choice, prepare a comprehensive Risk

Management Plan, and include all relevant details (100)
Contents
1.0. GENERAL INFORMATION..........................................................................................3
2.0. METHODOLOGY........................................................................................................ 4
2.1. Risk Identification.........................................................................................................4
2.2. Risk Assessment.........................................................................................................5
2.3. Plan Risk Response Strategies...................................................................................6
2.4. Risks Monitoring and Control.......................................................................................7
3.0. ROLES AND RESPONSIBILITIES..............................................................................7
4.0. RISK BUDGETING......................................................................................................8
5.0. RISK CATEGORIES....................................................................................................8
6.0. DEFINITIONS OF PROBABILITY AND IMPACT.........................................................9
6.1. Risk probability Scale..................................................................................................9
6.2. Risk Impact Scale......................................................................................................10
6.3. Probability impact Matrix............................................................................................12
7.0. STAKEHOLDER TOLERANCES...............................................................................12
8.0. RISK REPORTING....................................................................................................13
9.0. RISK REGISTER.......................................................................................................13
References........................................................................................................................... 14
1.0. GENERAL INFORMATION

Project Brief

Project Name Riverside Shopping Mall

ClientOld Mutual Pension Fund
Project Location Belvedere, Harare
Project Budget US$6 M
Site descriptionVirgin land
Wet Area
Black cotton soils
Shopping Floor Area 4000 Square Meters
Parking Area 5500 Square Meters
Town planning Provisions Buffer zone
Key external stakeholders Harare Residents Association
EMA
Harare Wetlands Trust
City of Harare
Key internal stakeholders Client
Project team
Architect
Engineer
Town planner
Quantity Surveyor
EIA Consultant
Contractor
Subcontractors

The Group 3 project managers has been tasked to be the Project Managers for the
Proposed Old Mutual Pension Fund (OMPF) Shopping Mall Project in Belvedere. This
document is a comprehensive risk management plan that includes all the relevant details
and procedures to be followed in order to manage project risks on the project.The purpose
of this risk management plan is to outline the process of conducting risk management
activities for the project. The risks particular to this project may arise from or in connection
with the following construction project phases;

a) Initiation and concept feasibility

b) Planning and design development
c) Tender documentation and procurement
d) Contract documentation and management
e) Project Closeout

Risk management on this project aims to;

a) Identify risks early

b) Pro-actively manage these risks
c) Inform the design and delivery process
d) Avoid surprises
e) Increase certainty
f) Aid effective contingency management
g) Inform change control
h) Ensure sufficient contingency management

2.0. METHODOLOGY

The [ CITATION Pro13 \l 7177 ] risk management approach will be taken to manage the
risks on this project. The approach includes the processes of identifying, analysing risks,
planning risk responses and controlling the risks. The most prioritised risks will be added to
the project schedule or programme to ensure that the assigned risk owners or managers
take the necessary steps to implement mitigation responses at the appropriate time during
project implementation.

The risk managers/ owner must provide status updates on their assigned risks in the bi-
weekly project team meetings. Upon the completion of the project, during the closing
process, the project manager will analyse each risk as well as the risk management
processes followed. Based on this analysis, the project manager will identify any
improvements that can be made to the risk management process for future projects. These
improvements will be captured as part of the lessons learned knowledge base.

Fig 1 illustrates procedure adopted to manage risks on this project.

Perform Perform Control &

Indentify Plan Risk
Qualitative Quantitative Monitor
Project Risks Responses
Risk Analysis Risk Analysis Risks

2.1. Risk Identification

Risk identification will be conducted in the initial project risk assessment meetings.

The project team will use the following methods to identify the risks on that may affect the
project.
a) The Crawford Slip Method

This is a simple yet effective type of brainstorming that gives the opinions of all team
members’ equal weight, however quiet they are. The project manager will chair the risk
assessment meeting and distribute notepads to each member of the team and allow 10
minutes for all team members to record as many risks as possible.

b) Expert Interviews

Expert Interviews will be held to identify risks, the project plan may be adjusted to avoid very
high impact risks that may cause project failure. The remaining risks will then be included in
the Risk Register.

c) Risk Assessment Meetings

Risk assessment meetings will be held by key team members and stakeholders. The risks
identified during this meeting are also added to the project plan and Risk Register.

d) Historical Review of Similar Projects

The project team will also review the history of similar projects in order to determine the most
common risks on shopping mall projects in Harare and the strategies that were used to
mitigate those risks.

Risks may arise from or in connection with the following factors on the proposed project;

a) EMA restrictions
b) Town planning provisions and approvals
c) Architectural & Engineering Design Approvals
d) Procurement Strategy
e) Inflation
f) Cost & Schedule Estimates Accuracy
g) Currency risks
h) Cash flow and Liquidity
i) Design Changes (Variation orders)
j) Design Team & Contractor’s Performance

2.2. Risk Assessment

Once the risks have been identified, the project team must prioritize the risks. This process
contains two sub-processes which are qualitative risk analysis and quantitative risk analysis.
Risks which are more likely to occur and have a significant impact on the project all fall
under high priority risks while those which are more unlikely or have a low impact will be of
lower priority

Qualitative risk analysis – Qualitative risk analysis process will prioritise risks identified on
the project for further analysis or action by assessing the combined risk of occurrence and
impact. The assessment will enable the project Manager reduce the level of uncertainty and
focus of high priority risks. PM with the support of the project team shall conduct these
assessments and thereof issue a risk matrix and a risk priority list.
The following tools and techniques will be used by the project team;

a) Risk probability and impact assessment

b) Risk categorization
c) Risk urgency assessment
d) Risk probability and impact matrix

Quantitative risk analysis – Risks may further be analysed using quantitative risk analysis.
The Quantity Surveyor, Risk Analysis Experts with the support of the PM will be responsible
for estimating the cost implications or time implications of the identified risks. Expected
Monetary Value (EMV) method will be used in numerically analysing the risks. The EVM of
each risk is calculated as;

EVM = probability of occurrence x impact

If the EMV is negative it depicts the contingent reserves to be set aside to cater for project
threats. Alternatively, if the EMV is positive it means that the project will benefit from risk
related activities. In addition, the project team will also use expert judgement to identify and
quantify risks. The arithmetic summation of the Expected Monetary Values will aggregate to
the project contingency reserve.

2.3. Plan Risk Response Strategies

The project manager will lead the project team in developing responses to each identified
risk. As more risks are identified, they will be analyzed or qualified and the team will develop
risk response strategies. These risks will also be added to the Risk Register and the project
plan to ensure they are monitored at the appropriate times and are responded to
accordingly.

The following response strategies will be adopted for negative risks;

Table 2 – Treatment of Negative Risks

Negative Risks Treatment
Strategy Description
Avoid eliminating the threat or protect the project
from its impact
Transfer shifting the impact of a threat to a thirty
party, either by insurance, contract
conditions and form of contract
Mitigate reduce the probability of occurrence or
impact
Accept not take any action until the risk occurs i.e.
applying a contingency and management
reserve.

.
Table 3 – Treatment of Negative Risks
Positive Risks Treatment
Strategy Description
Exploit eliminating the uncertainty associated with
a particular upside risk by ensuring the
opportunity definitely happens, e.g. using
BIM software
Enhance Increasing probability and/or positive
impacts of an opportunity
Share Allocating some or full ownership of the
opportunity to third party who is best able to
capture the opportunity
Accept not take any action until the risk occurs.

2.4. Risks Monitoring and Control

Risk monitoring and control will be a continuous process throughout the life of this project.
As risks approach on the project schedule the project manager and team will ensure that the
appropriate risk owner provides the necessary status updates which include the risk status,
identification of trigger conditions, and the documentation of the results of the risk response.

The PM and Project Team will perform the following activities when monitoring and
controlling risks;

a) Ensure the execution of risk plans and

b) evaluate the effectiveness of reducing risks;
c) keep track of the identified risks,
d) monitor conditions for contingencies,
e) monitor residual risks and identify new risks and
f) update the organizational process assets (OPAs).

The outcome of risk monitoring and control activities will be;

g) Risk register update
h) Corrective action
i) Recommended preventive action
j) Project change requests
k) OPAs updates
l) Project management plan updates

3.0. ROLES AND RESPONSIBILITIES

The responsibility of managing risk is allocated amongst the key project stakeholders on the
project. The decision authority for selecting whether to proceed with any risk response
strategies and contingency plans with cost and schedule implications will remain with the
Project Manager. The PM will seek approval through the change control board before
implementing the decisions or actions with cost and schedule implication. The risk
management processes are allocated as follows;
Table 4- Risk Responsibility Chart
Risk Responsibility Chart
Project Sponsor Project Consultant Contractor
Manager Team
Plan Risk X X X
Management

Identify Risk X X X X

Perform X X X
Qualitative Risk
Analysis

Perform X X X
Quantitative
Risk Analysis

Plan Risk X X X
Responses

Monitor & X X
Control Risks

4.0. RISK BUDGETING

The following budget need to be allocated to the project in order to carry out the risk
management processes effectively.

Table 5- Risk Management Proposed Budget

Budget Summary
Item Cost Element Amount – (USD)
1 Plan Risk Management Activities 1,000.00
2 Identify Risk Activities 1275,00
3 Risk Analysis Consultants & Software 10,000. 00
4 Plan Risk Responses Formulation Activities 3,000.00
5 Monitoring & Controlling Risks by Risk Managers 5,690.0
6 Total Budget 20,965.00

5.0. RISK CATEGORIES

The risks identified on the project will be categorized by project phases. A risk break down
structure will be developed showing risks assumed for each project phase as follows;
 OMPF Proposed
Shopping Mall

Initiation & Planning & Tender Contract

Concept design documentation documentation Project Closeout
Feasibility development & procurement & management

Risk Factors Risk Factors Risk Factors Risk Factors Risk Factors

Fig 2- Risk Categorisation by Project Phases

6.0. DEFINITIONS OF PROBABILITY AND IMPACT

The project team will determine the combinations of probability and impact that will result in
the classification of risks into high, medium and low risks as guided by the main
stakeholders’ tolerance levels.

6.1. Risk probability Scale

The project team will use risk probability ranges that characterizes the chances that a certain
event may occur during the course of the project in order to prioritize the risks. Group 3
project managers classified the probabilities into 3 levels of low, medium and high as
follows;
Table 6 – Risk Probability Ranges
Risk probability ranges
Label Color code Probability Description
range

Low 0-0.3 These may not require proactive team

management action and can be eliminated from
further assessment or periodically reassessed
in the future until they are closed or
occasionally elevated to a higher risk
classification.
Medium 0.4-0.7 These are either high probability low impact or
low probability high impact events. The low
probability high impact events are of more
concern and require more oversight under this
classification. They need to be monitored for
changes.
High 0.8-1 Require priority action and aggressive response
strategies by the risk owners. Specific action is
warranted to reduce the probability of
occurrence or the risk's negative impact.

6.2. Risk Impact Scale

The Group 3 will also use the probability impact ranges to prioritize the identified risk. The
Impact of risks on each project objective are prioritized by the risk impact scale as outlined
below.
Table 7 – Risk Impact Ranges
Risk Impact ranking

Primary objectives – Project Constraints

 
  Cost Schedule Scope Quality
Ranking        
Low <5% cost increase <5% schedule Scope changes within 0-5% of Reworks constitutes to less 5% of project
increase the scope baseline cost

Medium 5%-10% cost increase 5%-10% Scope changes within 5%-10% Reworks constitutes to between 5% -10% of
schedule of the scope baseline the project cost
increase

High >10% cost increase >10% schedule Scope changes more than 10% Reworks constitutes to more than10% of the
increase of the scope baseline project cost
6.3. Probability impact Matrix
The probability impact matrix is a combination of the risk probability of occurrence and
impact on the project objectives of cost, schedule, scope and quality. The impact of risks on
project’s schedule, scope and quality is translated into monetary value. The table below
highlights the formulated probability impact matrix for the project.

Table 8- Probability- Impact Matrix

Probability impact assessment matrix
   
  Likelihood
  0-0.3 0.4-0.7 0.8-1
Impact

Low Low Medium

0-$5K

Low Medium High

$5-$10K

Medium High High

>$10K

7.0. STAKEHOLDER TOLERANCES

Stakeholder risk tolerances were determined on the main stakeholders on the project. A
stakeholder analysis process was carried out to cover the tolerances of each stakeholder
during project initiation. The following Stakeholder Tolerance Matrix was developed.

Table 9- Stakeholder Tolerance Matrix

Stakeholder Tolerance Matrix
Stakeholder Requirements Tolerances
Time Cost Quality Scope
Project Deliver the Up to 10% Up to Up to 10% Up to 10%
Manager Product as increase 10% reworks increase
Requested increase
Old Mutual Realise Profit Up to 5% Up to 5% Up to 5% Up to 5%
Pension increase increase reworks increase
Fund
Shops Suitable tenant Up to 5% Up to 5% Up to 5% Up to 10%
Tenants space & increase increase reworks increase
fittings
requirements.
Affordable
rentals.
Shops State of the Art Up to 5% Up to Up to 5% Up to 20%
Customers Shopping Mall increase 10% reworks increase
increase

8.0. RISK REPORTING

The formal risk report procedure and format will;

a) Enhance the infrastructure for reporting key information, particularly that used by the
project team and OMPF management to identify, monitor and manage risks.
b) Improve the decision-making process throughout the project team
c) Reduce the probability and severity of losses resulting from risk management
weaknesses;
d) Improve the speed at which information is available and hence decisions can be
made.

These principles must be adopted by the project team and risk owners when reporting risks;
a) Completeness
b) Timeliness
c) Adaptability
d) Accuracy
e) Comprehensiveness
f) Clarity and usefulness

The reporting frequency will be as follows;

a) Monthly reporting on Risk factors, trends, indicators and triggers
b) Monthly Risk meeting on risk practices, processes and implementation
c) Inspection of risk management and audit practices quarterly

Reporting Formats will be as follows;

a) Updated risk register

b) Updated Risk Management Plan
c) Risk Assessment Minutes
d) Risk Processes Audit Reports

9.0. RISK REGISTER

The Risk Register for this project is a log of all identified risks, their probability and impact to
the project, the category they belong to, mitigation strategy, and when the risk will occur.
The register will be created through the initial project risk management meeting led by the
project manager. During this meeting, the project team will identify and categorize each risk.
Additionally, the team will assign each risk a score based on the probability of it occurring
and the impact it could potentially have. The Risk Register also contains the mitigation
strategy for each risk as well as when the risk is likely to occur.

Based on the identified risks and timeframes in the risk register, each risk will be added to
the project plan. At the appropriate time in the plan—prior to when the risk is most likely to
occur—the project manager will assign a risk manager to ensure adherence to the agreed
upon mitigation strategy. The each risk manager will provide the status of their assigned risk
at the bi-weekly project team meeting for their risk’s planned timeframe. The Risk Register
will be maintained as an appendix to this Risk Management Plan.
References
Project Management Institute. (2018). A Guide to the Project Management Body of
Knowledge. Newtown Square, Pennsylvania: Project Management Institute.