RISK MANAGEMENT FOR BUILDING PROJECT
IN CONSTRUCTION PHASE
Vi Van Giang1, Chen Wei2
School Civil Engineering and Architecture, Wuhan University of Technology 430070, 122# LuoShi Road, Wuhan
City, Hubei Province, China.
Vice Dean of Construction Management Faculty, School of Civil Engineering and Architecture, Wuhan University
of Technology 430070, 122# LuoShi Road, Wuhan City, Hubei Province, China.
Compared with other works, the construction category has many unknown factors. These factors
inevitably affect the achievement of the item's objectives, such as the seriousness of the progress,
poor quality, loss of cost control, the safety construction guaranteed… This can seriously affect
the usability of the building, even causing great damage to property and people's lives. However,
the work of risk management research building construction is very weak, risk management
practices are always in the "inception phase" and only successfully applied in very few projects.
large scale. So, to study the risk management strategies in the exam category construction of
important theoretical and practical significance.
Keywords: Risk management, construction phase, construction phase.
I. Risk assessment in the construction phase
1. Risk concept
Risks are uncertain conditions or events that if it is released, it will have an adverse effect on the
project objectives. Risks are unstable events occurring, uncertainty arises from the project's
perception of the future, based on estimates, assumptions, or a few facts about resources and
time. and requests. Risks often create negative impacts on projects, but the project should
consider and take advantage of the positive effects or opportunities arising from the risks
(inevitability of all risks) to help the project achieve its goals faster and less costly. For risks that
have a negative impact on the project, preventive action should take precedence over risk
2. Risk classification
The risk of the construction phase is the ability of the category construction items, that is not
fulfilled. Based on the different sources of risk, the risk of construction items can be classified
into the following categories:
Risks due to external factors: Construction industry is the sector in which the process of
performing work is mainly influenced directly by the external environment, so the weather
factors, climate change has a great influence on the project implementation time, substance
quantity and cost of the works and Construction is an industry that accounts for a large share of
the national economy's investment budget, and is directly related to many other services in the
market, so market fluctuations Influence on the price of raw materials, labor market fluctuations,
capital market fluctuations, etc., have a great influence on the performance of construction
enterprises. to the cost, quality as well as the progress of construction works, work items.
Risks due to technical reasons: As we know, construction is a fast growing industry, with more
and more large works with ever-increasing workloads, complexity and technical requirements
are rigorous. To invest in procurement of machines and equipment with great significance in
minimizing labor for laborers, to create conditions for the application of advanced technologies,
raise labor productivity, and increase the quality of works. , and contribute to speeding up the
implementation, soon put the works into operation, exploitation and use. In the process of using
machinery and equipment has been invested, there are many risks caused. These risks are mainly
related to the level of the user and often cause great harm such as labor accidents, machinery
damage, unsafe product quality, affect psychology workers and quality of works
Risks in the inspection, acceptance, handover: Frequent monitoring and supervision is not
considered in accordance with regulations. Due to the negative phenomena between the
construction supervision of the investor and construction management of the construction
Risks due to administrative procedures, legal: These risks can be understood as objective reasons
resulting from changes in some policies of the State and legal regulations. Administrative
procedures affect the ability to complete the project as planned. These risks affect most of the
participants in the project: from the owner to the contractor, the supplier of materials and
equipment, and the donors.
3. Risk characteristic
Construction phase is implemented to invest, develop and create material facilities for the
society, so it has a long operating time and is directly influenced by many pulse environment.
Such as politics, economics, society, nature, law, technology ... Therefore, the risk management
in the construction phase should be closely concerned. The risk of a construction item has the
characteristics of objectivity, relativity, indefiniteness, predictability, control, changeability, etc.
However, risks can be expected, It is possible to control if the thorough investigation of the
factors related to the specific risks, while controlling them effectively, can reduce the incidence
of risk, reduce losses caused by the risk. . In addition, the nature and consequences of risk may
change under certain conditions. Signs of risk, sometimes referred to as triggers, are often
indirect signs of actual risk. In the field of project management, a high uncertainty is often seen
as a source of risk, which is uncertainty about progress, cost, and technology. Risks are present in
most projects, especially in the field of research and development. Major risk signs include:
Random changes in the performance of parts or subsystems; The data is inaccurate or incomplete
and lack predictability at a satisfactory level due to no similar experience.
II. The problem in Risk Management of construction phase.
1. The sense of risk management backward
The last through, development to build in the countries of the gif is not unsupporting to over the
modifier, field of global global community. However, getting format, đánh giá, undefined control
mode from the affect referenced on the project that not yet we comment, which is an action
object is a phase. Performing the formula of the phase of the project of the first project of the
first build the build, request, ... any an administrator ro may in the current stage but not updated
by the development development thế giới. Unactact the small operation of unsupported unique
and the output of the risk of the image was risk was very large to the output of the
performanceDue to the brutal competition in the construction market and small profits from
construction items, when bidding for construction and when the category director signed
economic targets with most businesses are not estimated the risk management costs, always
choose the "betting" strategy for the risks that may arise. In addition, in the process of bidding
for construction and construction, risk management is carried out in different levels and forms,
but only in reluctance or adaptation, therefore, when risk arises. , the damage caused is even
greater, even cause failure category.
2. Lack of knowledge of risk management
Risk management was studied and application started rather late. With the short development
time, the knowledge of risk management in the construction category is not universal. In
addition, due to the lack of specialized risk management positions and the placement of
specialized managers, most rely on intuition, experience rather than systematic response
measures. Comprehensive price and risk identification of potential risks. During the whole life
cycle of the project (project preparation, construction investment and years of exploitation and
use of the project), it is necessary to identify enough risks due to the external and internal
environment of the project. . Each stage of the project implementation of the risks are also very
different. Each environment is risky, the risks are influential both inside and outside the project,
the risk changes over time. Therefore, the identification of risk should be done, updated
regularly. Especially at the project preparation stage to make investment decisions, it is necessary
to fully identify risks that may occur throughout the life of the project. The stage of investment
execution of construction works shall consider the risks affecting the construction investment
expenses. The operation and operation phase of the project should identify the risks that affect
the costs of project operation management, production costs, annual income
3. Laws, regulations and policies are not uniform
Early identification, analysis, evaluation, control and mitigation of the adverse effects of the risks
are essential to ensure the feasibility and effectiveness of the project. It is necessary to develop
the Law on Construction and legal documents guiding the establishment of important legal
corridors in the construction phase in order to manage the investment projects on the
construction of works effectively. In developed countries such as the United States, the United
Kingdom, or developed regions such as Europe, the research and application of risk management
for buildings has been a long history. A system of legal regulations and workplace risk
management regimes has been formed over a long period of time, and the accumulation from the
real world has not only improved but also established a secure regime. And insurance works
quite well at the same time well run, promote the important effects in market practice and reduce
losses due to risk. Measure the impact of the risk on the investment efficiency of the project, the
likelihood of success of the project when the impact of the risk.
4. Criteria for risk management have not been consolidated
In recent years, several countries have compiled many industry standards and national standards
for risk management. These standards have promoted the positive role in normalizing the
content, methods and flow of risk management of construction items in China and at the same
time agreed on the implementation of technical standards and standards. Work in risk
management, avoid or reduce losses caused by the risk during construction. However, there are
still lack of standards for risk management and standards, and guidelines for enforcement.
Therefore, it is difficult to manipulate and can not promote the practice of risk management in
III. Measures to strengthen the risk management of construction phase
Show the current, sources on the implementation of the fact of the shared package manager are
built, but will still many job must be done. View comments from the corner of business building,
which just just need to be selected a consult of the private consult the owner and the related
related, special as the main management body also just just just expected in standard, the law
rule with the roquyre ro roquy trị cao cấp management, complete the rules. In the current
phase, the building of business may be built with the ro ro ro ro in the building building from the
1. Change the concept of risk management
Changing the concept of risk management is a basic premise to strengthen the risk management
of construction items. Firstly, the insights gained from the popularity and seriousness of riskaversion, thus recognizing the importance of risk management. Assessing the risk effect on
project effectiveness is a complex task, generally incorporating qualitative methods with
quantitative methods. Qualitative methods were formed and developed simultaneously with the
development of science and technology, with the support of important mathematical and
informatics such as the theory of statistical probability, analyzes, combinations, software
applications ...Secondly, the full realization that risk management is an extremely complex
science, transforming the concept of management is based on experience.
2. Improve the risk management system
Improving the risk management system is an indispensable requirement for improving the risk
management of construction items. Risk management is a complex management activity, based
on the management of the regime. Construction companies need to step by step build up a
system of risk management, conduct systematic design for the functions, scope, order, depth ... in
risk management for risk management. ro is effectively implemented. To update the regulations
on competence in the construction of works, new organizational principles and methods in risk
management. It is necessary to have a synchronous and timely system when detecting risks
during the construction phase. Consider factors that ensure the effectiveness of the project
including: the need for investment, scale of capacity, technology; time, progress of project
implementation; financial analysis, socio-economic efficiency of the project. Considering factors
that ensure the feasibility of the project, including: conformity with the planning; the demand for
land and natural resources (if any); the ability to clear the ground, the ability to mobilize capital
to meet the progress of the project; management experience of the investor; results of evaluation
of basic designs; ability to repay loans; fire and explosion prevention measures; Factors affecting
the project, such as defense, security and the environment, based on the written opinions of the
concerned agencies and other relevant law provisions.
3. Perfect the organization management system
Consolidation of the risk management organization system is an important basis for enhancing
risk management. Risk management is also a management activity, can not be separated from the
specific management organization. The risk management organization should operate in
accordance with agreed principles. To carry out control activities, limit the negative impact of the
risk to ensure the investment efficiency set out by the project. Risk control plans are
implemented simultaneously with many measures from actively preventing unreasonable
resources to deal with risks, actively avoiding risk sharing, Positive, timely when the risk
occurs ... Some measures commonly applied in projects such as measures in economic contracts,
insurance, construction management systems standards, diversity As a matter of fact, risk studies
on construction investment projects are being considered, develop and play a very important role
in effective project management.
4. Strengthen the training of risk management knowledge
Currently, the staff of risk management is not interested in training, knowledge is limited, not
specialized depth based on the process of self-study. The implementation of management training
activities for the staff involved in construction items is an important measure to strengthen the
risk management but accompanied by the cost and time need to businesses , the investor has not
paid attention. Through the training of knowledge to employees, especially management staff is
very necessary. This creates a team of highly qualified and experienced personnel, thereby
enhancing risk minimization during the construction phase. The project output will function
 Document of course Risk Management of Construction Project.
 Pryke, S. and Pearson, S. (2006), “Project governance: case studies on financial
incentives”, Building Research and Information.
 R.Y. Sunindijo, P.X.W. Zou, CHPT construct: essential skills for construction project
managers, International Journal of Project Organizational Management.
 K.-J. Yi, D. Langford, Scheduling-based risk estimation and safety planning for
construction projects, Journal of Construction Engineering Management.
 V.K. Bansal, Application of geographic information systems in construction safety
planning, International Journal of Project Management.
 S. Mohamed, Safety climate in construction site environments, Journal of Construction
 G. Carter, S.D. Smith, Safety hazard identification on construction projects, Journal of
Construction Engineering Management.
 S.D. Janasz, G. Wood, L. Gottschalk, K. Dowd, B. Schneider, Interpersonal Skills in
Organisations, McGraw-Hill, Boston, 2006.
 Kadefors, A. (2004), “Trust in project relationships – inside the black box”, International
Journal of Project Management.
 S. Mohamed, Safety climate in construction site environments, Journal of Construction