Book

CHAPTER 1INTRODUCTION

1.1 GENERALRisk is defined as the problem or issue which is expressed in the form of probability with its chance of occurrence and the severity of the impact it can cause. Risk is used in many different ways and with many different words, such as hazard or uncertainty. Every activity we do is, to a degree, characterized by the presence of risk.The construction industry has long been recognized as risk laden. Risk in construction is defined as a variable in the process of construction whose occurrence results in uncertainty as to the final cost, duration and quality of the project. Risk management controls the level of risk and mitigates its effects. The risk management process in construction industry includes risk identification, risk assessment, risk allocation, risk mitigation, and risk monitoring. The literature survey revealed various risks in construction projects having varied impacts on the success of the project. Qualitative and quantitative techniques can be used for assessment of risks. The paper focuses on the Risk factor analysis and fuzzy TOPSIS analysis where the risks are quantitatively evaluated in terms of probability of occurrences and their impacts on the project goals and fuzzy trapezoidal co ordinates respectively. The study conducted a questionnaire survey of the identified risk factors in order to determine their relative importance. The questionnaire survey was self administrated on construction practitioners in contracting organizations, consultancy firms involved in real estate construction projects. Survey responses were analysed using the Risk factor and fuzzy TOPSIS analysis respectively. For the analysis purpose an integrated model were generated. In this model a group of nine risk factors which consisting of sub factors are used. Finally the overall project risk can be found. This model gives an overview of the general level and pattern of risk facing the project; focuses management attention on high risk item in list; helps to decide where action is needed immediately, and where action plans should be developed for future activities; and facilitates the allocation of resources to support managements action decisions. 1.2 RISK ASSESSMENT AND MANAGEMENT IN CONSTRUCTION INDUSTRYRisk Assessment is the technique that aims to identify and estimate risks to personnel, property and all other factors impacted upon by a project.Risk management is defined as a set of methods and activities designed to reduce the disturbances occurring during the realization of the project. The fundamental aim of a risk management process is to ensure that all steps needed to achieve the project objectives will be taken.Risk is a major factor which affects the construction industries in all over the world. In India, it is difficult to handle due to the lack of the knowledge in the domain. Risk assessment and management is the emerging domain throughout the world to reduce the Economic loss and timely completion of the project. In India Risk assessment and management are carried out for the major projects in which the fund transaction is more and has high challenging environment such as Marine structures, Ports, Airports, major road projects, etc., even in real estate construction projects we can incorporate the Risk assessment and management to make the project successful in stipulated Cost and Time schedule. Only the person with clear knowledge about the risk assessment and management in site can predict the problem which may evolve as a risk and find out the mitigation measures for the risk in the correct time. To some extent, practicing engineer with experience is able to access and manage the risk in their project. By educating them in various domains of risk they will be able to manage it more effectively and efficiently.

1.3. RISK MANAGEMENT PROCESSRisk management is simply defined as management of activities of all risk events, likelihood and its impact. Risk management has to identify the opportunities and mitigation strategies to reduce both the likelihood of an event occurrence and the political effect if it occurs. It is a systematic way of protecting the concerns resources and income against losses so that the aims of the business can be achieved without interruption. Risk management is a formal orderly process for systematically identifying, analysing, and responding to the risk events throughout the life of a project to obtain the optimum or acceptable degree of risk elimination or control. In construction projects each of the four primary targets of cost, time, quality and safety are likely to be subjected to risk and uncertainty.To pursue these targets an effective work towards risk management is very important. Risk management is thus directly related to the success of project completion. The steps involved in risk management are as follows:

Risk Identification - It comprises determination of various risks involved, and the events or actions that would adversely affect the cost, performance, schedule or viability of project. Al-Bahar and Crandal (1990) has defined Risk identification as the process of systematically and continuously identifying, categorizing, and assessing the initial significance of risks associated with a construction project Risk Assessment - The identified risks are evaluated in terms of the probability of occurrence and impact. Risk can be assessed either using a quantitative or qualitative analysis. Risk Allocation - After identifying and assessment of project risks, the risks are allocated to right place at right time. Flanagan and Norman (1993) have given certain fundamental considerations, which govern the allocation of risk wherein the project manager has to consider how the risk can be effectively controlled and to what extent the risks should be taken care of. Risk Mitigation - Risk mitigation aims at providing efficient response to the identified and analyzed risks. Al-bahar and Crandall (1990) describe risk mitigation strategies as risk avoidance, risk retention and assumption, risk transfer, risk management by insurance. Risk monitoring - Monitoring and controlling of risks is necessary for the success of project, improving the reputation of the organization. Effective communication, timely reporting and recording plays an important role in risk monitoring.

1.4 OBJECTIVE OF THE STUDYThe main objective of the study is1. To find out the risk factors and their impacts over a real estate construction project from literature review and discussion with experts.2. To make an integrated model in order to the risk assessment for a real estate construction project.3. To analyse the risk factors in order to make their top priority4. To analyse the data in order to find out the total project risk5. To Suggest the Feasibility status of Risk assessment study.

1.5 SCOPE OF THE STUDY1. Real estate construction projects are implementing with more competitions. 2. Risk assessment and management makes the notable changes in economy of the company. 1.6 ORGANISATION OF THE STUDYIn addition to the present study introductory chapter, this work has been presented in six chapters as stated below:Chapter 2 Presents a basic literature review of literature covering the related area of studyAn overview of review of factors which cause the risks in real estate construction project and various analytical methods of risk assessment and management Chapter 3 Presents a discussion on the research methodology in which the factors, the proposed model and the data collection methods have mentioned and introduction to the risk factor analysis and fuzzy TOPSIS analysis has explained. Chapter 4 Deals with data results and discussions of the two analysesChapter 5 Presents the summary and conclusions for study.

CHAPTER 2LITERATURE REVIEW

2.1. RISKThe concept of risk became popular in economics during the 1920s. Since then, it has been successfully used in theories of decision making in economics, finance, and the decision science (Ngai & Wat, 2005). Risk has different meaning to different people; that is, the concept of risk varies according to viewpoint, attitudes and experience. Engineers, designers and contractors view risk from the technological perspective; lenders and developers tend to view it from the economic and financial side (Baloi & Price, 2003). According to Padiyar et.al, Tarun Shankar and Abishek Varma(2010) risk is situation where there exists no knowledge of its outcome or exposure to loss resulting from inadequate or failed internal processes. Risk is a function of uncertainty of events, potential loss/gain from events. Padiyar et.al have specified that the essence of risk is characterised by three factors, first the event which is a possible occurrence which could affect the achievement; second is the likelihood which is the chance or probability of risk event occurring within the time period and the third factor includes the impact of the event in terms of financial value of the effect of the risk event. The traditional view of risk is negative, representing loss, hazard, harm and adverse consequences. But some current risk guidelines and standards include the possibility of upside risk or opportunity, i.e. uncertainties that could have a beneficial effect on achieving objectives (Hillson, 2002). Project risk is defined by Project Management Body of Knowledge (PMBOK) published by the Project Management Institute (PMI) as an uncertain event or condition that, if it occurs, has a positive or a time, cost, span or quality, which implies an uncertainty about identified events and conditions. PMBOK describes risk through the notion of uncertainty; however, these two phenomena are not synonymous (Perminova, Gustafsson, & Wikstrom, 2008). According to the Olsson (2007) and Hillson (2004) attempts to link risk with uncertainty based on the distinction between aleatory and epistemic uncertainty in the following couplet:- Risk is measurable uncertainty.- Uncertainty is immeasurable risk.This implies that, when measurable, an uncertainty is to be considered a risk. PMBOKs definition of risk and uncertainty is the considered definition through the entire paper because this definition implies that risk is quantifiable and lends itself to assessment.2.2. RISK MANAGEMENTIf a risk is not identified it cannot be controlled, transferred or otherwise managed (Bajaj, 1997) and trying to eliminate all risks in projects is impossible. Thus, there is need for a formal risk management process to manage all types of risks. The project success usually depends on the combination of all risks, response strategies used to mitigate risks and a companys ability to manage those (Dikmen, Birgonul, & Han, 2007). Hence, the underlying concept of risk management is to manage risks effectively (Thevendran & Mawdesley, 2004). Risk management can lead to a range of project and organizational benefits including: (Bannerman, 2008)- Identification of favourable alternative courses of action.- Increased confidence in achieving project objectives.- Improved chances of success.- Reduced surprises.- More precise estimates (through reduced uncertainty).- Reduced duplication of effort (through team awareness of risk control actions).PMBOK included risk management as one of the nine focuses in project management and described it as the process concerned with conducting risk management planning, identification, analysis, responses, and monitoring and control on a project (Zou, Zhang,& Wang, 2007). Risk management in construction is a tedious task as the objective functions tend to change during the project life cycle, and the scenarios are numerous due to sensitivity of projects to uncontrollable risks stemming from the changes in the macro-environment, existence of high number of parties involved in the project value chain, and one-off nature of the construction process (Dikmen, Birgonul, Anac, Tah, & Aouad, 2008). Construction projects are characterized as complex and unique where risks arise from a number of different sources. Ghosh, S. & Jintanapakanont, J. (2004) and Tah, J.H.M and Carr, V. (2011) have described various sources of construction risks as internal and external. The internal sources also called as controllable sources include the client, consultants, design, cost management, construction project management, contractors, sub contractors and suppliers. The external sources are uncontrollable and comprise economic globalization dynamics, unforeseen circumstances, government/statutory/political controls, environmental constraints, health and safety issues outside the control of the project team and socio- cultural issues.In a large construction engineering projects, sources of risks can be categorized as market, completion and institutional. Market risk is mainly caused by the demand uncertainty, completion risks refer to technical risks during and after completion of a project. Institutional risks are related to the political uncertainties in a specific situation.Project risk management is an integrated process which includes activities to identify project uncertainty, estimate their impact, analyze their interactions, control them in the execution stage, and even provide feedback to the maintenance of collective knowledge asset (Williams, 1995). Risk management based on consensus in the literatures, used the following three-step approach(Zayed et al., 2008):- Risk identification.- Risk assessment.- Risk mitigation.The first step in risk management is risk identification. Before risks can be managed, they must be identified. Identification surfaces risks before they become problems and adversely affect a project. It refers to the evidences from previous experience or similar cases which would apply to the current project, in order to avoid or ameliorate the probability of compromising the projects success. Construction risks can be categorized in a number of ways based on the source of risk, impact of risk or by project phase (Klemetti, 2006). In the most reference one, project risks are divided into two groups, according to their source, into internal and external. Internal risks are initiated inside the project while external risks originate due to the project environment (El-Sayegh, 2008). In risk identification step all internal and external risks must be identified. After the establishment of a list of risk events that had actually occurred in the process of project performance, these risks must be assessed. The primary objective of risk assessment is to estimate risk by identifying the undesired event, the likelihood of occurrence of the unwanted event, and the consequence of such event. Risk assessment involves measures, either conducted quantitatively or qualitatively, to produce the estimation of the significance level of the individual risk factors to the project, so as to produce the estimation of the risk of the potential factors to project success. However, this step results will become the input to the determination of the optimum decision. With a better quantification measuring result, the managers can recognize which risks are more important and then deploy more resources on it to eliminate or mitigate the expected consequences. The identification and assessment of project risk are the critical procedures for projecting success, and they usually become the essential factors in the decision-making process (Williams, 1995). Most authors refer to the processes which include risk identification and assessment, as the stage called risk analysis. Risk analysis can provide insight to the specific sources of project risk and enable management to devise targeted remedial action. Several methods have been proposed and utilized thorough research by a lot of scholars to help contractors and subcontractors to evaluate and select the best projects in order to decide which projects are more risky. And so these models help to plan for the potential sources of risk in each project and manage each source during construction. Currently project management teams have more options from which to choose. Risk assessment methods have ranged from simple classical methods to fuzzy approach mathematical models. Many construction project risk assessment techniques currently used are comparatively mature tools (Zeng, An, & Smith, 2007). Monte Carlo Simulation (White, 1995), Sensitivity Analysis (White, 1995), Critical path method (Kaufmann & Gupta, 1988), Fault tree analysis (Terano, Asai, & Sugeno, 1992), Event tree analysis (Huang, Chen, & Wang, 2001), Failure mode, effects and criticality analysis (Bowles & Pelaez, 1995) are the classical quantitative methods, used in construction industry for risk assessment. These methods only use data that are quantitative so, for effective application of these sophisticated quantitative techniques high quality data are a prerequisite (Zeng et al., 2007). Only on a few projects and contracts are risk considered in a consistent and logical manner; much assessment is too subjective (Mills, 2001). So, some other models suggested, involve both quantitative and qualitative ones. Fuzzy risk assessment methods have also been deployed with some scholars too. Mustafa and Al-Bahar (1991) investigated the subject of risk assessment and developed a scheme of classifying the various sources of risk in construction projects. They applied Analytical Hierarchical Process (AHP) in assessing the riskiness of a real-life constructing project (Mohammad & Al-Bahar, 1991). Sadiq and Husain (2005) developed a three-stage hierarchical structure aggregative risk model for grouping of risk items. For this grouping, an analytical hierarchy process was used for assessment. Another hierarchical risk breakdown structure is described to represent a formal model for qualitative risk assessment by Carr and Tah (2001). In their paper, using fuzzy approximation and composition, the relationships between risk sources and the consequences on project performance measures were identified and quantified. Cho, Choi, and Kim (2002) propose another methodology for incorporating uncertainties using fuzzy concepts into conventional risk assessment frameworks in construction industry. Choi, Cho, and Seo (2004) present fuzzy risk assessment methodology for underground construction projects. A formalized procedure and associated tools were developed to assess and manage the risks involved in underground construction. The suggested risk assessment procedure is composed of four steps of identifying, analyzing, evaluating, and managing the risks inherent in construction projects. Zeng et al. (2007) developed a methodology to deal with risks associated with the construction projects in the complicated situations. This model can handle with the expert knowledge, engineering judgment and the historical data for risk assessment and in this model the risk can be evaluated directly using linguistic terms which are employed in risk assessment. Zayed et al. (2008) introduces a model, based on AHP to help practitioners to assess Chinese highway risk projects and prioritize them. This methodology quantifies the qualitative effect of subjective factors of risk. These methods differ in a variety of ways and they have their own advantages and disadvantages. So an ideal risk assessment method which would suit all organizations does not exist, as each of the organizations and projects possesses its own unique characteristics (Lichtenstein, 1996), so, an organization and project management team need to select the most appropriate methodology on its specific. This problem labelled as the risk assessment model selection.Hariharan Subramanyan, et al (2012) were made the study about the construction industry and the risk assessing and management strategy in present India. They analyze the present risk condition by meeting experts in the field towards risk assessment and suggest a risk response strategy and a questionnaire was prepared on the basis of a literature review and was given to six contractors, four owners, five project management experts, having more than 20 years of experience in the construction field in India. The factors were represented in qualitative terms, and fuzzy analytical hierarchy process (AHP) is used to find the percentage contribution of various factors to smooth completion of the work. A total of 93 risk factors were identified and those risk factors are frequently experienced by the practicing engineers in Indian construction industry and they are classified under various subgroups and are given as1. Project-specific factors2. Owner-specific factors3. Contractor-specific factors4. Architect and consultant-specific factors5. Project-manager-specific factors6. Resource-specific factors7. External-environment-specific factors8. Finance specific factors and 9. Contract-clause-specific factors.Hyun-Soo Lee, et al (2012) they have studied the assessing risk using a quantitative approach for various risk factors can be part of decision-making for safety management in the construction industry. They have identified mathematical formulation to express the risk framework for construction projects. There are three components which is used to comprise the framework are given as Risk influence factor component includes a factor extraction process, weights of factors, and classification of risk. Risk assessment by work type component uses the Database to statistically assess risk by work type. Risk assessment component consists of a site information Database, a selection module, and a calculation module that assesses the risk index considering the site characteristics.Zhou Lin and Yang Jianping (2011) they have study about Fuzzy Analytical Neural Process (F-ANP) for risk assessment model for New Campus Engineering projects. Government of China planned to improve the Universities campus due to more number of NRE students intake. Risk factors are identified in the implementation of the construction process and risk assessment model in prepared. In this project Analytic network process (ANP) based on the analytic hierarchy process (AHP) were domination role in hierarchical allocation of low-rise factors to high-rise factors in this new campus construction process and the following factors were considered for Fuzzy comprehensive evaluation for the risk assessment Most of the risk factors in the project cannot use mathematical formulation to quantitatively describe its property and their consequences. Fuzzy mathematics can be use quantify the risk information into fuzzy information. Transform the benefit and loss of risk into the interval values by the theory of fuzzy centralization statistical. The evaluation results easy to be accepted and identified in fuzzy information. Correction to weights by the theory of information entropy makes the actual objective effectiveness of the weights calculated by fuzzy information.

Yanjun Zhao, et al (2011) they had proposed to forecast risk effectively and quantitatively, the fuzzy sets and systems theory was applied. According to the hierarchy of construction engineering risks, the risk system is established and the forecast sets and weight sets of risk are completed by applying the fuzzy theory and the various levels of risks and holistic risk of construction engineering are forecasted and they combining the maximum degree of membership, the weighted-average method and the fuzzy distribution method are adopted. The various mathematical systems followed in this paper and the case study regarding the construction industry is taken into account and they demonstrate the risk assessment model. In this study they had classified the construction risk into two levels such as first level which it is classified into three and in the second level it is further classified into six subcategories.Chaphalkar, Shelar and Patil (2011) they had explained the various risks prevailing in a construction project and their sources of origination and assessed the risks qualitatively and quantitatively. The techniques used in this paper are taken into account for the real estate projects.Osama Ahmed Jannadi and Salman Almishari (2003) Studied about the risk in construction industry due to accidents and Estimates of levels of risk are based on the likelihood of an event occurring and the significance of the consequences of such an event. It is important to assess risk, a precise estimate of risk may not be required. A model that determines the value of risk would help contractors identify the high risk of major construction activities and would enable them to allocate safety precautions in a more efficient manner. This paper gives a brief outline of making a Risk Assessor Model (RAM) that was developed and computerized to determine the risk associated with a particular activity and the justification factor for a proposed remedy. This is the base paper RAM for all type of projects.

CHAPTER 3METHODOLOGY3.1 GENERALThe study involves in collection of the factors causing the risks in construction projects form literature survey. An integrated model has been developed in order to find out the overall risk of the project by using nine groups of factors. The real estate construction experts are asked to rate the factors with Boolean scale in the questionnaire. The collected data will be used as the input values for two phase analyses.3.2 METHODOLOGY

Initial study

Identify the problem of statementImportance of studyResearch scopeObjectives

Literature review

Develop an integrated modelFactors that causes the risks in real estate construction project

Data collectionQuestionnaire surveyInterview

Methodology

Results & Recommendations

Data analysisPhase I Risk factor analysisPhase II fuzzy TOPSIS analysisFig 3.1 flow chart of methodologyThe procedure followed in this study is as follows The factors causing risks in real estate construction projects A questionnaire has been developed by pilot study An integrated model has been developed for risk assessment Questionnaire survey has been done The collected data are analyzed by two phases of analyses The top priority factors and the overall project risk has been found3.3 LITERATURE REVIEW A comprehensive literature review had been carried out through variety of information sources, which included library reference books, journal articles and research papers. These reviews help the writer having more understanding in1. Factors that causes risks in real estate construction project.2. Project team players roles and responsibility throughout the course of construction period.3. The severity of these factors from previous study.

3.3.1 IDENTIFIED FACTORS THAT CAUSES RISKS FROM LITERATURE REVIEW1. Project-Specific Factors(i) Size of the Project(ii) Location Uniqueness(iii) Regulatory Approvals(iv) Type of Projects(v) Competition at Tender stage(vi) Tender selection methodology(vii) Deviation of scope(viii) Duration change due to change in nature of work(ix) No clear definition of completion of work(x) Delay penalties(xi) Legal disputes and lawsuits(xii) Flow of finance(xiii) Insurance strategy(xiv) Exposure to accidents(xv) Unanticipated Impacts2. Owner-Specific Factors(i) Inadequate definition of project scope in the beginning(ii) Delay in handing over the site to contractor(iii) Chances of facing financial crisis(iv) Delay in revising and approving design document by owner, i.e., inefficient in decision making (v) Delay in payments by owner; not offering incentives for early completion of activities(vi) Sudden termination of work by owner(vii) Unreasonably high expectation of owner(viii) Changes made by owner during construction(ix) Owners lack of exposure to changing trends in industry3. Contractor-Specific Factors(i) Delay in mobilization(ii) Poor site management and supervision by contractor(iii) Improper construction methods/quality variations(iv) Delays in subcontractors work(v) Frequent change of subcontractors(vi) Poor qualification/experience of the contractor(vii) Ignorance of impact of contract clause(viii) Chances of facing financial crisis 4. Architect/Consultant-Specific Factors(i) Insufficient data collection and survey before design(ii) Inadequate experience of consultant with regard to type of project(iii) Delay in performing inspection and testing by consultant(iv) Inflexibility of consultant(v) Complex/ non executable design(vi) Unclear and inadequate details in drawings(vii) Chances of consultant leaving the project midway(viii) Non use of advanced engineering design software

5. Project-Manager-Specific Factors(i) Project manager's technical capability(ii) Use of appropriate planning tools and techniques by project manager(iii) Holding key decisions in abeyance(iv) Lack of induction and training of human resources(v) Negative attitude of project manager(vi) Lack of coordinating ability and rapport of project manager with other contractors at site(vii) Reluctance in maintaining target schedule by top management(viii) Lack of leadership quality of project manager(ix) Lack of effective monitoring and feedback by project manager(x) Chances of project manager leaving the project(xi) Tools and techniques6. Resource-Specific Factors(i) Selection of material and equipments(ii) Delay in materials delivery(iii) Changes in material types and specifications during construction(iv) Unrealistic price variation in material(v) Improper selection of equipment(vi) Equipment breakdowns(vii) Shortage of equipment(viii) Quality variations(ix) Shortage of labors(x) Unqualified workforce(xi) Poor inventory management7. External-Environment-Specific Factors(i) Unfavorable social environment(ii) Unfavorable economic/market fluctuations(iii) Unfavorable political environment(iv) Changing government policies(v) Labor strikes(vi) Natural calamities(vii) Sudden unforeseen events

8. Finance-Specific Factors(i) Financial policies(ii) Liquidity(iii) Cost of capital(iv) Market risk(v) Credit risk(vi) Operational risk(vii) Profitability risk(viii) Contingency risk(ix) Time risk9. Contract-Clause-Specific Factors(i) Differing site conditions clause(ii) Delay damages clause(iii) Extension of time clause(iv) Termination of contract clause(v) Dispute resolution clause(vi) Price escalation clause(vii) Use of bar chart/CPM clause(viii) Ambiguities in defining certain clauses

3.3.2 THE PROPOSED MODEL FOR RISK ASSESSMENT FROM LITERATURE REVIEW

Fig 3.2: Proposed model of overall project risk assessment

3.4 METHODS OF DATA COLLECTIONThe general methodology of this study relies largely on the questionnaire survey which will be collected from local building contractors of different sizes by mail or by personnel meeting. A through literature review was initially conducted to identify the factors that causes the risks in real estate construction project as a whole.1. Questionnaire survey - the data has been collected through questionnaire survey delegated to contractors, architect- consultant, developer/client that involve in management of real estate construction project.2. Interview interview from experts and collecting details from their experience3. E-mail survey the questionnaire will also be sent through e-mail to respective respondents namely contractors, consultants and developers/client.3.5 METHODS OF RISK ASSESSMENT3.5.1 RISK FACTOR ANALYSISRisk can be assessed either using a qualitative or qualitative analysis. Quantitative risk analysis covers a range of techniques for assessing the impact and likelihood of identified risks. These approaches can be used to prioritize the risks according to their potential effect on project objectives and is one way to determine the importance of addressing specific risks and guiding risk responses. Quantitative analysis uses numerical ratio scales for likelihoods and consequences, rather than descriptive scales. There are many tools are available for evaluation of risks and risk control, ranging from experience- based judgement, checklists and risk matrices, to specialist review and analysis techniques.Klemetti Anna(2006) explains that risk can be evaluated by estimating risk probability and impact in simple scales for examples, from 1 to 5 or from high to low. The risks can be mapped in a probability- impact grid. On the gird, risks that require the most attention are easily detectable wherein actions to control them can be taken only if there are sufficient resources or if mitigating the risk costs are less than the product of possibility of risks occurrence and its impact on project objectives (expected value).Al-Bahar J.F and Crandall K.C (1990) quantified risk as the product of probability and impact where impact may be gain or loss in a construction project. Cooper Dale F. and Stephen Grey (2005) have analyzed risks by using the risks by using Risk Factor which supported similar base of probability, impact chart method, but using different formula. In this model, consequences are rated in terms of the potential impact on the criteria, often on five point descriptive scales linked to the criteria identified in the context step. Likelihoods are rated in terms of annual occurrence on a five point descriptive scale, showing the likelihoods of risks arising and leading to the assessed levels of consequences.The significance of a risk is termed as Risk Factor and is expressed in terms of its consequences or impacts on project objectives, and the likelihood or occurrences of those consequences arising. To calculate risk factors or levels, the descriptive likelihood assessments are converted to numerical measures, P. A similar process is followed for the consequence assessments, C. A risk factor RF or combined risk measure is then calculated for each risk.RF = P + C (P x C).............................................. Eqn (1)Where;RF= Risk factorP= Probability (occurrences) measure on a scale 0 to 1C= consequences (impact) measure on a scale 0 to 1The risk factor RF, from 0 (low) to 1 (high), reflects the probability of a risk arising and the severity of its impact. The risk factor will be high if the probability P is high, or the consequence C is high, or both. Note that the formula only works if P and C are on scales from 0 to 1.

3.5.2 FUZZY TOPSIS ANALYSIS TOPSIS method is a popular approach to multiple criteria decision making (MCDM) and has been widely used in the literature. The method has also been extended to deal with fuzzy MCDM problems. For example, Tsaur, Chang and Yen (2002) first convert a fuzzy MCDM problem into a crisp one via centroid de fuzzification and then solve the non fuzzy MCDM problem using the TOPSIS method. Chen and Tzeng (2004) transform a fuzzy MCDM problem into a non fuzzy MCDM using fuzzy integral. Instead of using distance, they employ grey relation grade to define the relative closeness of each alternative. TOPSIS method is a technique for order preference by similarity to ideal solution and proposed by Hwang and Yoon (1981).

The ideal solution (also called positive ideal solution) is a solution that maximizes the benefit criteria/attributes and minimizes the cost criteria/attributes, whereas the negative ideal solution (also called anti-ideal solution) maximizes the cost criteria/attributes and minimizes the benefit criteria/attributes. The so-called benefit criteria/attributes are those for maximization, while the cost criteria/attributes are those for minimization. The best alternative is the one, which is closest to the ideal solution and farthest from the negative ideal solution. In fuzzy MCDM problems, criteria/attribute values and the relative weights are usually characterized by fuzzy numbers. A fuzzy number is a convex fuzzy set, characterized by a given interval of real numbers, each with a grade of membership between 0 and 1. The most commonly used fuzzy numbers are triangular and trapezoidal fuzzy numbers. In order that the TOPSIS method can also be used to deal with fuzzy MCDM problems, several extensions have been suggested.

The simplest extension is to change a fuzzy MCDM problem into a crisp one via defuzzification. This way, however, can cause some information lost and only gives a crisp point estimate for the relative closeness of each alternative. Another extension is to define the Euclidean distance between any two fuzzy numbers as a crisp value. Accordingly, the Euclidean distances of each alternative to the ideal solution and negative ideal solution are both crisp values. This way also leads to a crisp point estimate for the relative closeness of each alternative. The TOPSIS method uses Euclidean distance to measure the differences between each alternative and the ideal solution as well as the negative ideal solution.

CHAPTER 4RESULTS AND DISCUSSIONS4.1 RISK FACTOR ANALYSIS4.1.1 GENERALIn this risk factor analysis the top priority factor can be found by using the risk factor formula. The formula consisting the relationship between the occurrence and their impact. The risk factor is always between 0 and 1. For each respondent the risk factor analysis will be done. Eventually the top priority for each impact over a real estate construction project can be found by consolidated result.4.1.2 Analysis for a Respondent(i)Cost overrunTable 4.1: risk factor analysis for cost overrun (for a respondent)COST OVERRUN

Q.NOQUESTIONOCCURENCEIMPACTOCCURENCE IMPACTRISK FACTOR

RESPONDED SCORESSCORESRESPONDED SCORESSCORES

1Project - Specific Risk factors4440.840.80.96

2Owner - Specific Risk factors3330.630.60.84

3Contractor - Specific Risk factors2320.430.60.76

4Architect - Consultant Specific Risk factors3330.630.60.84

5Project - Manager Specific Risk factors4440.840.80.96

6Resource - Specific Risk factors1210.220.40.52

7External - Environmental Specific Risk factors2320.430.60.76

8Contract - Clause Specific Risk factors3330.630.60.84

9Finance - Specific Risk factors2320.430.60.76

(ii) Schedule delayTable 4.2: risk factor analysis for schedule delay (for a respondent)SCHEDULE DELAY












(iii)QualityTable 4.3: risk factor analysis for quality (for a respondent)QUALITY












(iv)SafetyTable 4.4: risk factor analysis for safety (for a respondent)SAFETY












(v)Top factorsTable 4.5: top prioritised factors to the corresponding impacts (for a respondent)TOP FACTORSImpactOccurrence

Cost overrunProject - Specific Risk factors, Project - Manager Specific Risk factors0.960.80.8

Schedule delayOwner - Specific Risk factors0.960.80.8

QualityOwner - Specific Risk factors0.920.80.6

SafetyProject - Manager Specific Risk factors0.880.80.4

(vi)Graphical representation

Fig 4.1: graphical representation of top prioritised factors For this project, the scores of occurrence is more are less equal to the scores of impact of cost overrun and project schedule delay which means the impacts over the project get increase with number of repetitions of factors in project is higher. For the impact quality, scores of impact is slightly higher than the scores of occurrence. For the impact safety, the project has tremendous impact with the small occurrences.

4.1.3 Consolidated analysis(i)Cost overrunTable 4.6: risk factor analysis for cost overrun (consolidated)COST OVERRUN








6Resource - Specific Risk factors945140.81




(ii)Schedule delayTable 4.7: risk factor analysis for schedule delay (consolidated)SCHEDULE DELAY







5Project - Manager Specific Risk factors1245140.81



8Contract - Clause Specific Risk factors040040.80.8


(iii)QualityTable 4.8: risk factor analysis for quality (consolidated)QUALITY





3Contractor - Specific Risk factors1345140.81







(iv)SafetyTable 4.9: risk factor analysis for safety (consolidated)SAFETY







5Project - Manager Specific Risk factors1535130.61





(v)Top factorsTable 4.10: top prioritised factors to the corresponding impacts (consolidated)Scores

TOP FACTORSImpactOccurrence

Cost overrunResource - Specific Risk factors10.81

Schedule delayProject - Manager Specific Risk factors10.81

QualityContractor - Specific Risk factors10.81

Safety

Project - Manager Specific Risk factors10.61

(vi)Graphical representation

Fig 4.2: graphical representation of top prioritised factors (consolidated)Out of 75 questionnaires distributed, 52 are collected. For this data the analysis has been done. The Fig 4.2 graph represents the top priorities for each impact. From the consolidated graph, the scores of impacts more are less equal to the scores of occurrences.

4.2 FUZZY TOPSIS ANALYSIS4.2.1 GENERALIn this fuzzy TOPSIS analysis, the factors are considered as first level and the impacts are considered as second level. The weights for the first level can be found from the second level weights which are from respondents. And the assumed trapezoidal co ordinates are multiplied by the first level weight and second level weight. This procedure is repeated for each factor. The sum of the co ordinates of all factors is known as total risk co ordinates.We have to consider experience and qualification of the respondents. Because the data which are given by them, are fully depended on their experience and the qualifications. Therefore, the normalised weights are calculated from their respondents weight and multiplied by the trapezoidal co ordinates of each respondent. The total project risk co ordinates can be found from the cumulative trapezoidal co ordinates.

1

4.2.2 ANALYSIS FOR A RESPONDENTTable 4.11: Trapezoidal coordinates after with weightsRisk factors (1st Level) WeightsWeights for 1st LevelRisks factors (2nd Level) WeightsWeights for 2nd LevelTrapezoidal Fuzzy Coordinate Trapezoidal Fuzzy Coordinate after (X) with weightsTrapezoidal Fuzzy Coordinate after (X) with weights

Project - Specific Risk factors750.11Cost Overrun 900.300.30.40.60.70.0100.0130.0190.0220.0210.0320.0530.064

Schedule Delay800.270.10.20.40.50.0030.0060.0110.014

Quality 600.200.30.40.60.70.0060.0090.0130.015

Safety700.230.10.20.40.50.0020.0050.0100.012

Owner - Specific Risk factors750.11Cost Overrun 900.300.10.20.40.50.0030.0060.0130.0160.0120.0210.0420.053

Schedule Delay800.270.10.20.40.50.0030.0060.0110.014

Quality 600.200.30.40.60.70.0060.0090.0130.015

Safety700.23000.20.3000.0050.007

Contractor - Specific Risk factors750.11Cost Overrun 900.30000.20.3000.0060.010.0110.0160.0370.048

Schedule Delay800.270.30.40.60.70.0090.0110.0170.02

Quality 600.200.10.20.40.50.0020.0040.0090.011

Safety700.23000.20.3000.0050.007

Architect - Consultant Specific Risk factors83.750.12Cost Overrun 900.270.10.20.40.50.0030.0060.0130.0160.0230.0320.0560.068

Schedule Delay950.280.50.60.80.90.0170.020.0270.03

Quality 800.240.10.20.40.50.0030.0060.0110.014

Safety700.21000.20.3000.0050.007

Project - Manager Specific Risk factors900.13Cost Overrun 900.260.10.20.40.50.0030.0070.0140.0170.0160.0250.0510.064

Schedule Delay900.26000.20.3000.0070.01

Quality 850.250.30.40.60.70.010.0130.0190.022

Safety750.220.10.20.40.50.0030.0060.0110.014

Resource - Specific Risk factors76.250.11Cost Overrun 900.300.10.20.40.50.0030.0060.0130.0160.01590.0270.0480.059

Schedule Delay700.230.30.40.60.70.0070.010.0150.017

Quality 700.230.10.20.40.50.0020.0050.010.012

Safety750.250.10.20.40.50.0030.0050.0110.013

External - Environmental Specific Risk factors66.250.09Cost Overrun 600.230.30.40.60.70.0060.0090.0130.0150.0380.0470.0660.076

Schedule Delay750.280.50.60.80.90.0130.0160.0210.024

Quality 700.260.30.40.60.70.0070.010.0150.017

Safety600.230.50.60.80.90.0110.0130.0170.019

Finance - Specific Risk factors750.11Cost Overrun 950.32000.20.3000.0070.010.0100.0150.0370.047

Schedule Delay950.320.10.20.40.50.0030.0070.0140.017

Quality 600.200.30.40.60.70.0060.0090.0130.015

Safety500.17000.20.3000.0040.005

Contract - Clause Specific Risk factors850.12Cost Overrun 950.28000.20.3000.0070.010.0030.0070.0240.043

Schedule Delay950.280.10.20.40.50.0030.0070.0070.017

Quality 900.26000.20.3000.0060.01

Safety600.18000.20.3000.0040.006

Total Risk in Coordinate =0.1350.2220.4160.522

4.2.3 CONSOLIDATED PROJECT RISK CO ORDINATESTable 4.12: Trapezoidal coordinates with weights given to the expertsSl. NoDetails Of the ExpertWeightsNormalised WeightsTrapezoidal Coordinates of ExpertsTrapezoidal Coordinates With the Weights given to Experts

Expert 1

Name Mr.D.Ilayaraja0.4700.1350.2220.4160.5220.0630.1050.1950.246

EducationB.E., 80

Experience7 Years14

Expert 2

Name Mr.M.B.Hiramath0.7500.1250.2290.4210.5290.0940.1720.3160.397

EducationB.E., 80

Experience35 Years70

Expert 3

Name Mr.N.Selvaraj0.7300.0840.1490.3420.4490.0620.1090.2500.328

EducationDCE60


Expert 4

Name Mr.D.Narasimhamurthy0.7500.1330.2080.4000.5080.1000.1560.3000.381

EducationB.E., 80


Expert 5

Name Mr.C.M.Divakar0.6200.0820.1570.3500.4570.0510.0970.2170.283

EducationB.E., 80


Expert 6

Name Mr.Junaid Irfani0.7600.0920.1750.3670.4750.0700.1330.2790.361

EducationB.E., 80


Expert 7

Name Mr.K.R.Umapathi0.5000.0880.1500.3440.4500.0440.0750.1720.225

EducationB.E., 80


Expert 8

Name Mr.M.N.Nitin Kumar0.4700.4330.5700.7620.8010.2040.2680.3580.376

EducationB.E., 80

Experience7 Years14

Expert 9

Name Mr.Madhusudhan0.6700.2990.4300.6180.7150.2000.2880.4140.479

EducationB.E., 80


Expert 10

Name Mr.M.G.Raveendra0.6200.1160.2130.4050.5130.0720.1320.2510.318

EducationDCE60


4.2.4 TOTAL PROJECT RISK

Fig 4.3: fuzzy trapezoidal of the total project risk

CHAPTER 5SUMMARY AND CONCLUSION5.1 GENERALThere are many factors in the real estate construction project that influences the risks of the project, but still there are some factors that lead to risks in the project, among which the top most are discussed in this project.5.2 SUMMARY AND CONCLUSION(a) FROM LITERATURE REVIEW1. Risk factor is consider to finish the project in Stipulated time Stipulated cost Improve Quality Ensure Safety2. Risk assessment and management makes the work of the Project managers safe(b) FROM THE STUDY ON PROJECT Risk factor analysis: The top priority for each impacts areTable 5.1: conclusion of risk factor analysisImpactsTop prioritised factor

Cost overrunResource-Specific Risk factors

Schedule delayProject Manager-Specific Risk factor

QualityContractor-Specific Risk factor

SafetyProject Manager- Specific Risk factor

From the above priorities, we can conclude that we have to focus on these factors in order to reduce the corresponding impacts over the real eastate construction project

Fuzzy TOPSIS analysis: The overall project risk is calculated by using fuzzy TOPSIS approach. The total project risk co ordinates are 0.115, 0.180, 0.293, 0.356. The co ordinates imply that most of the respondents concerned as risk co ordinates. If the co ordinates of a particular project is closer to the risk co ordinates, then the project is considered as higher risky project. These risk co ordinates are the anti ideal solution which makes the impacts over the project as higher value. Therfore we can conclude that the farthest from this value is considered as lesser risky project. From that the project manager can make the effective decision. In oreder to increase the crisp value, we have to go through the risk factor analysis and reduce the impacts over the real estate constrution project.5.3 SCOPE OF FUTURE WORK1.This study is only for the real estate construction project, this work can also be extended for some other kind of projects like commercial projects, infrastructural projects etc. and reduce the risk impacts over the projects2.In this study, the limited factors are used for analysis. The focus on the sub factors can improvise the results and make it more accuracy.

REFERENCES

1. Aurelija Peckienea, Andzelika Komarovskab, and Leonas Ustinoviciusc(2013): Overview of Risk Allocation between Construction Parties 11th International Conference on Modern Building Materials, Structures and Techniques,MBMST 2013, Procedia Engineering 57,pp. 889 894.

2. A. Pinto, I.L. Nunes, and R.A. Ribeiro(2011): Occupational risk assessment in construction industry Overview and reection. Safety Science. 49 (2011), pp. 616624.

3. Abo-Sinna, M. A., & Amer, A. H. (2005): Extensions of TOPSIS for multi objectiveLarge-scale nonlinear programming problems. Applied Mathematics and Computation, 162, pp. 243256.

4. Chu, T. C. (2002a): Facility location selection using fuzzy TOPSIS under groupDecisions. International Journal of Uncertainty, Fuzziness and Knowledge-Based Systems, vol 10, pp. 687701.

5. Edmundas Kazimieras Zavadskas and Zenonas Turskis (2013): Multi-criteria risk assessment of a construction project Information Technology and Quantitative Management, Procedia computer science 17(2013), pp 129-133.

6. Ge Xiao-mei a, Liu Xiao-junb(2011): Application of Entropy Measurement in Risk Assessment of the Engineering Project of Construction-agent System 2011 International Conference on Risk and Engineering Management (REM)vol 1,pp 244-249.

7. Guangshe Jia , Xiaochuan Ni , Zhen Chen , Baonan Hong , Yuting Chen , Fangjun Yang , Chen Lin(2013): Measuring the maturity of risk management in large-scale construction projects Automation in Construction vol34,pp. 5666. 8. L. Lehtiranta(2011): Relational risk management in construction projects: modelling the complexity". Leadership and Management in Engineering. Vol 11 (2), pp. 141154.

9. Perry JG, Hayes RW. Risk and its management in construction projects. Proc Inst Civil Engrs 1985;1(78):499-521.

10. V.Carr and J.H.M Tah (2001): A fuzzy approach to construction project risk assessment analysis: Construction project risk management system. Advances in Engineering software 32,pp. 847-857.

11. Yanjun Zhao, Xiaojun Liu, Yan Zhao (2011): Forecast for construction engineering risk based on fuzzy sets and systems theory. 2011 International Conference on Risk and Engineering Management (REM) Procedia Computer Science 1 (2011), pp 156-161.

APPENDIX

QUESTIONNAIRE SURVEY

This section encompasses two parts in which first part consist of description of risk and the second part consists of table for risk allocation.(i) RISK DESCRIPTION NORISKSDESCRIPTION

1Project-Specific Risk factorSize, Nature, Location, Climatic nature, Local Community problem all comes under this risk.

2Owner-Specific Risk factorIndefinite scope definition, Handing over site, Payment delay by owner, termination of work by owner, inefficient owner to handle work, etc.,

3 Contractor-Specific Risk factorDelay in mobilisation, Poor site management, Improper methods, Change of subcontractors, Ignorance of contract clause, etc.,

4Architect-Consultant Specific Risk FactorsInsufficient data collection for design, Inefficient consultant, Inadequate details in drawings, etc.,

5Project-Manager Risk factorsUse of management and planning tools, Inefficient training of the Human resources, Lack of leadership Quality and Monitoring, Chances of Project manager leaving the Project, etc.,

6Resource-Specific Risk factorsSelection Materials and Equipment, Breakdown, Lack of spares, Quality variations, Low productivity and efficiency of equipment, Shortage of labours, Labour shortage/strike, Unqualified workforceNo formal training, Poor inventory management, etc.,

7External-Environmental Specific Risk factorsUnfavourable social environment, Unfavourable economic/market fluctuations, Unreasonable high expectations of stakeholders, Unfavourable political environment, Changing government policies

8Finance-Specific Risk factorsFinancial policies, Liquidity, Market risk, Operational risk, Profitability risk, Time risk, etc.,

9Contract-Clause Specific Risk factorsDiffering site conditions, Delay damages, Extension of time, Termination of contract, Price escalation, etc.,

(ii) RISK IMPACT ON PROJECT COST OVERRUN SCHEDULE DELAY QUALITY OF WORK SAFETY IN WORK

(iii) RISK IMPACTImpact is classifying under five categories and it is given in the table.No.IMPACTDESCRIPTION

1Very LowWhich cause negative impact than 20% of an activity

2LowWhich cause negative impact is 20% or more than 20% and less than 40% of an activity

3MediumWhich cause negative impact is 400% or more than 40% and less than 60% of an activity

4HighWhich cause negative impact is 60% or more than 60% and less than 80% of an activity

5Very HighWhich cause negative impact is 80% or more than 80% and less than 100% of an activity

(iv) RISK ALLOCATION

NORISKSOccurrenceWeightsFactorsWeightsVery LowLowMediumHighVery High

1Project-Specific Risk factorCost Overrun

Schedule delay

Quality

Safety

2Owner-Specific Risk factorCost Overrun

Schedule delay

Quality

Safety

3Contractor-Specific Risk factorCost Overrun

Schedule delay

Quality

Safety

4Architect-Consultant Specific Risk FactorsCost Overrun

Schedule delay

Quality

Safety

5Project-Manager Risk factorsCost Overrun

Schedule delay

Quality

Safety

6Resource-Specific Risk factorsCost Overrun

Schedule delay

Quality

Safety

7External-Environmental Specific Risk factorsCost Overrun

Schedule delay

Quality

Safety

8Finance-Specific Risk factorsCost Overrun

Schedule delay

Quality

Safety

9Contract-Clause Specific Risk factorsCost Overrun

Schedule delay

Quality

Safety

NAME: ___________________________________________________________________ORGANIZATION/ INSTITUTION NAME: _______________________________________________________________________________________________________________INDUSTRIAL EXPERIENCE: _______________________________________________MAILING ADDRESS: ______________________________________________________MOBILE NO: _____________________________________________________________FOR INDIAN CONSTRUCTION INDUSTRY WHICH IS HAVING MORE RISK IN THE ABOVE MENTIONED NINE CLASSIFICATION AND WHY? _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Mitigation Measure suggested by you to reduce the risk which you have mentioned above? _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Signature with Date

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