In today’s sensitive construction industry and volatile economy environment and as the construction projects tend to become more complex and with an increasing demand for shortened durations and reduced budgets, the associated risks may increase. This calls for expert’s input and targeted risk engineering management in order to raise risk awareness and inform critical decision making that suits the risk appetite of the stakeholders. With many transportation and infrastructure projects now procured on a concession basis, Delay in Start Up (DSU) or Advance Loss of Profit (ALOP) insurance is often a prerequisite of any project lenders and financiers providing limited recourse financing. The perceived high risk of delay in project completion consequent upon a loss causes considerable concern for insurers and project stakeholders.
In addition, urbanisation and the need for new transport routes and sustainable energy production, dictate the expansion of underground construction in both urban and mountainous areas, such as metropolitan railways, deep tunnels, underground power plants and deep basements. This dynamic trend forces the infrastructure project stakeholders to seek ways to minimise the impact of their projects and the usage of resources. Furthermore, underground works are associated with increased inherent risks and customised construction techniques. An additional challenge in underground works is that the most important decisions must be made under conditions of uncertainty in the early stages of the project’s life cycle when critical information may be limited or unavailable. Engineering judgment and experience is necessary to identify opportunities for project optimisation and advise on project options in terms of time, cost and resource management.
Regular and targeted risk engineering site surveys integrated with continuous progress monitoring will confirm that the project and risk management practices are properly implemented. They will ensure the continuous presence of a commonly shared understanding and attitude towards risk management among the key project stakeholders. In addition, they will ensure that all project specific hazards and risks are identified, adequately and appropriately managed and reviewed and determine the ongoing compliance of the project to the relevant codes of practice and best international practices. Furthermore, this approach will raise awareness to potential risk changes and/or introduction of new risks, identify risks that may adversely impact the project’s schedule critical path, provide timely mitigation measures and contingency provisions and enhance confidence with regards to the planned completion for projects with DSU/ALOP coverage. Thereby, certainty on financial exposure will be increased and the total cost of risk will be ultimately reduced.