Construction industries are exposed to wide array of risks, such as financial, design, and contractual ones, which might have a direct impact on their performance toward achieving the desired objectives. Risk Management is a proactive decision-making process used to minimize and manage the risks in the most efficient and appropriate manner. However, most construction firms do not apply formal risk management in their projects.

This case study is a project to demolish the existing building and reconstruct it to the 17-storey of Menara HEAMP, the Conference Hall, the Rumah Universiti, and some other related construction works. An interview with the Project Manager of this project who has 17 years of experience in construction industry was carried out.

The Project Manager claimed that they do not imply risk management because they do not want to spend time doing an analysis on the project risks as they feel there is another important work that needs more attention. In this project, risk management is not the responsibility of the project manager, but it is the obligation of the safety officer of the project. Safety Department will also take actions to handle risks only when there are admonitions made by the local authority officers. Despite giving these responsibilities to the Safety Department of the project, there are apparently no proper tools or techniques applied for risk management. However, the Project Manager mentioned that they use checklist and guidelines that have been certified by ISO 9000, and since checklist is one of the risk management approaches, it indicates that they have employed some risk management techniques.

The Project Manager also stated that the main risk in this project is in dealing with demolition, and, to prevent such risk, they conduct site safety meetings. In these meetings, they highlight and discuss the risk, the action that should be taken, and the effects of the action. Although the Project Manager claimed that this project does not apply any formal risk management, the discussion during the site meetings can be described as one of the techniques in identifying, analyzing, and responding to risk. Generally, the main problem in conducting this project is that the risks are managed when they occur and as a result the impacts affect directly the performance of the project. Given that this project implements risk management in a very low level, the project faced delay for three months. According to the Project Manager the reason for this delay is due to technical drawings problem. He believes that if they have had a formal risk management planning, they would not face such risk today. Moreover, the Project Manager believes that there should be a risk management department in every construction project, and since not every contractor is willing to bear the cost for having extra department for the project, some portion of the cost should be supplemented by the client in the contract.

1. What do you think about the Risk management in this project? Good or Bad? Why?
2. If You are the Project Manager, How would you have managed the risks? Explain.