Practical risk management in the construction industry

Edwards, Leslie

doi:10.1680/prmitci.20641

Cited by 73 publications

(48 citation statements)

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“…Insurance is often the cheapest method (when available) for managing catastrophic-type physical risks and for managing higher levels of liability exposures (Edwards, 1995). It is particularly the insurance of liability for damages and constructionassembly insurance that appear in contracts for work.…”

Section: Resultsmentioning

confidence: 99%

Financial Risk Hedging Instruments for Public Work Contracts

Korytářová

Staffa

Papežíková

2015

OTMCJ

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Public work contracts create a substantial share of building industry performance and consume a large amount of public financial resources. Construction process should be efficient without additional costs and overrun time schedules. A very important point in this process is represented by hedging public contracts against potential risk. There are many instruments used in the Czech Republic -insurance construction contracts, contractual penalty and retention or a bank guarantee to name several of them. But not all of them are as effective as the contractors need them to be. The main aim of this paper is to find an effective set of hedging instruments in contracts for work to sufficiently fulfil their function and protect the goals of both the investor and the contractor impending business risks. Information on hedging instruments has been studied on the sample of 246 public works contracts of sewage facilities and equipment. The empirical part of the research focuses on the extent of hedging instruments used, and discusses their application in the context of efficiency. Research finds out that the most commonly used instruments are retention and bank guarantees. Furthermore, the reasons for significant changes in shares of these instruments in the course of monitoring have been analyzed. The final outputs can have societal benefits and serve the contracting authorities and suppliers as a comparison of conditions of their own work contracts or as a help in creation of new work contracts. As additional outputs of this research is also comparison of contract prices and estimated values of tender according to number of tenders and type of award procedures.

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Section: Resultsmentioning

confidence: 99%

Financial Risk Hedging Instruments for Public Work Contracts

Korytářová

Staffa

Papežíková

2015

OTMCJ

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“…Therefore, personal interview was selected to elicit the conditional probabilities. A probability scale shown in Table 3 with both verbal and numerical expressions was used (Edwards, 1995). Recommended method for using incomplete data from one expert to predict a complete set of probabilities …”

Section: Figure 3 Flowchart Of the Experimental Designmentioning

confidence: 99%

Developing Complete Conditional Probability Tables from Fractional Data for Bayesian Belief Networks

Tang

McCabe

2007

J. Comput. Civ. Eng.

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Bayesian belief network (BBN) can be a powerful tool in decision making processes. Development of a BBN requires data or expert knowledge to assist in determining the structure and probabilistic parameters in the model. As data are seldom available in the engineering decision making domain, a major barrier in using domain experts is that they are often required to supply a huge and intractable number of probabilities. Techniques for using fractional data to develop complete conditional probability tables were examined. The results showed good predictability of the missing data in a linear domain by the piecewise representation method. By using piecewise representation, the number of probabilities to be elicited for a binary child node with k binary parent nodes is now 2k rather than 2 k .

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“…Several studies have been conducted to define the concepts of construction industry risk (Edwards 1995;Raftery 1994; Baloi and Price 2003; Chapman and Ward 1998). Identifying and assessing project risk are critical for projecting success, and they usually become essential factors in the decision-making process (Williams, 1995).…”

Section: Introductionmentioning

confidence: 99%

Assessing the Risks of Asian Development Projects: A Theoretical Framework and Empirical Findings

Lee

Yoonsun

Kim

2013

Journal of Asian Architecture and Building Engineering

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The global construction market has been gradually changing from general contracts to development projects. It is necessary to perform risk management for international construction projects because there can be multiple risks for which the degree of risk can be very high. Although international construction project risk management is important, there has been very little research regarding objective and quantitative risk assessment that reflects the project characteristics and decision-making. Therefore, research into risk assessment in Asia-centered international development projects (IDPs) is necessary. The purpose of this study is to identify and analyze key risk indicators (KRIs) through a proposed risk assessment framework for Asian Development Projects (ADPs). The methods and procedures of this study are as follows: First, quantitative indicators of main risk are identified. Second, critical risk indicators are analyzed and assessed by applying Fuzzy theory and the Analytical Hierarchy Procedure (AHP) methods. Finally, risk response attitudes are suggested and 12 risk indicators are selected according to priority evaluation in ADPs.

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Practical risk management in the construction industry

Cited by 73 publications

References 0 publications

Financial Risk Hedging Instruments for Public Work Contracts

Financial Risk Hedging Instruments for Public Work Contracts

Developing Complete Conditional Probability Tables from Fractional Data for Bayesian Belief Networks

Assessing the Risks of Asian Development Projects: A Theoretical Framework and Empirical Findings

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