Risk management for the project
Risk management for the project
Risk s Management Process in the project (converting Federal Goverment`s buildings to Green buildings):
Risk Management starts early in the life of a project. It starts during project planning and is continuously executed throughout the life of the project. Risk management is not standalone, but is integrated with many other project management processes. The figure below shows risk management flow, based upon Risk Management as defined in the PMBoK:
Risk Management Planning:
Risk Management Planning is usually performed only once, during project planning. However, if the project experiences a significant change (e.g., scope, personnel, schedule) then the Risk Planning process would be re-visited concurrently with any overall project re-planning. Decisions made during this planning establish the approach to risk management for the project and define how to conduct risk management activities for the project, including:
• Selecting or creating the Risk Management Process
• Selecting or creating the Risk Management toolset
• Establishing a risk repository and defining risk reporting templates
• Training project team in risk management
• Constructing the project’s Risk Management Plan
Risk Management would be fruitless without any risks to consider and act upon – Risk Identification activities are focused on identifying those potential risks that pose opportunities or threats to the project. Risk identification determines which risks might affect the project and identifies some of their characteristics.
Risk identification is executed continuously during a project’s life; it is first performed during Project Planning to identify an initial set of project risks. This activity results in the first version of the project’s Risk Register, which shows all identified risks and other related information. It is executed periodically, as scheduled in the Risk Management Plan, to identify new risks that may have surfaced or become apparent as project conditions have changed.
Effective risk identification is heavily influenced by the experience of project team members and others who participate in risk identification activities.
project’ risks (4):
Main risks in metros are the technical risks financial, completion, supply operational and safety risks. Identifying project risks, including technological, market risks and investment appraisal
b- Completion Risks
The completion risks are associated with the construction of the project, supply of materials, supply of devices and equipments of the metro and with the installation and readiness of the signaling, control and operating system of the project. These risks are shared by the consortium project company, EPC contractor, the suppliers and the local authorities.
Completion of Dubai Metro project depends on the financing, planning, design, construction, execution and implementation, materials supply, the EPC contractor and the consortium project company and its capability to get manage the risen risks during each of these stages of the project efficiently. It is very important to consider several aspects like accessibility to the site by workers and supplies, regulation, technology, skills and experience, right planning and right design, operation and management…etc. All these aspect can be a cause of delay to the project competition.
In Dubai’s Metro project, its consortium project’s company responsibility to ensure the completion timetable and budget. Because it is something being done for public benefit, the company would not have much trouble in getting the permits and site acquisitions. Company can get an EPC contractor, so that all the risks of quality, on time delivery, according to specifications, would be shifted to the EPC contractor. If any delays happen in this category the EPC contractor would be responsible for it, and they would have to compensate the project company. Most risks are shifted to EPC contractor, but some might be allocated to government as well, whereby they have to provide some agreements which makes site acquisition easy.
The EPC contractor is responsible to use proven and established technology to overcome any technical risks. By doing so, the EPC contractor is responsible for all the technical difficulties during the project. The EPC contractor should use effective ways of engineering and development that overcome any delay
c- Financial Risks
Financial risks are major source of risk because, if the company is not able to finance the project, then it can halt all the operations and the project would be severely delayed. Dubai metro project has been financed ‘awarded’ $3.4 bn by the local government. But the risk is still there as a result of the devaluation of the dollar and the oil rapid price increase, which affected the materials cost and the earning of the workers. We will talk about the financing risk in general and the way to mitigate it. The due-diligence for financial risks would be carried out by the Project Company, and financial institutions. The Project Company would carry out their due-diligence to show that they have a viable project, which would generate a reasonable amount of cash flows. The financial providers would carry out their own due-diligence to ensure that the project is financially viable, generates enough cash to repay loans and interest payments. They want to be secured form their side as well.
The major sources of finance would be commercial banks, international banks, bond issues etc.
Typical types of risks that occur when dealing in foreign currency include; transaction risk, economic risks and translation risks.
Translation Risks is an uncertainty associated with the translation of foreign currency denominated accounting statements into the home currency. This risk is extensively discussed in Multinational Financial Management courses.
Transactions Risks is an uncertainty associated with the home currency values of transactions that may be affected by changes in foreign currency values. This risk is extensively discussed in the Multinational Financial Management courses. To reduce the transaction risks, the company may use, spot rates, forward rates or may invoice using local and/or foreign currency. The economic risks can be reduced by borrowing money in the foreign currency. Translation risk can be mitigated by opening up subsidiaries in other countries to perform operations in that country, this would reduce the exchange exposure and figures of subsidiary can be included in the group accounts of the Project Company. Currency Swaps, Forward Rates Agreements, Currency Options etc can be used to reduce the currency and interest risks. The Project Company can use expert advice from financial institutions and can bring in experts to overcome such problems.
Dubai metro project has backing by number of organizations such as; Mashreqbank and Mizuho Corporate Bank, so it is assumed that the Project Company would be able to rise finance for this project.
Operation risks take place after the project is completed and starts running. General operation of the project will be run by Serco, Dubai Roads and Transport Authority (DTA) has selected it for a contract to operate and maintain the two lines of the metro. The five year contract, worth up to $800 million, covers operation and maintenance of the Red and Green lines, which will both open in September 2009. The contract also includes pre-launch consultancy and planning, and a further five-year extension may be awarded when the contract expires in 2014. They have to manage all the operation risks and are subjected to penalty according to the agreement if they fell .
The operation risks is about monitoring and controlling the performance and all the possible risks related to the functionality or use of the metro, the condition of the trains and tracks and the signaling and the other operating and controlling systems. Serco operator should be in charge for this risk, as well as the maintenance. The project company might contract the operations of the metro to another company, by doing so operating risks are shifted from the project company to that company. The general operations of the metro, management, maintenance, daily operations etc will be the responsibility of that company. Operational risks, if not dealt carefully, can reduce the revenues and can increase technical risks too.
f- Environmental Risks
The environmental risks are shared by number of parties in the project; government, Project Company, EPC contractor and the local council. The due-diligence for environmental risks is carried out by; Project Company, EPC contractor and local environmental agencies. Because the metro is being built under-ground and over-ground as well, so the environmental agencies would be particularly interested in the impact on local ecology. They also need to ensure that the environmental rules and regulations are also followed, because any trouble with them can stop the project.
It is the responsibility of EPC contractor to follow all the standards laid in the book. A strong control mechanism should be put in by the contractor to constantly identify the environmental impact of the metro and when a breach is found, it should be solved immediately.
It is the responsibility of EPC contractor to abide by all environmental rules and regulations. If there is a major change because of a change in environmental policies, the EPC contractor can be given a certain degree of leverage.
i- Technology Risks
Technological risks can be associated with the type of technology being used, how reliable the technology is, is it established or no? is there any commercial market for the technology, how much the technology costs etc.
By using an EPC contractor, the technological risks are again shifted to the EPC contractor, they are responsible for using an established technology, any delays that occur because of technological change, EPC contractor would be responsible for it.
Metro usually has risks associated with the signaling system, again it is the responsibility of the EPC contractor to use an established technology, which is new, and reliable and offers a viable solution.
A particular emphasis is given to environmentally friendly technology nowadays. Again it is the responsibility of EPC contractor to use such technology.
Qualitative Risk Analysis
Naming a risk and adding it to a project’s risk register is important, yet this accomplishment doesn’t give us sufficient information about the significance of the risk to the project. Risk Analysis, shown in this process flow as the two distinct steps of Qualitative and then Quantitative Risk Analysis, prioritizes risks for further analysis and risk response planning. It is through this analysis that the project team identifies the most significant risks and targets those risks requiring immediate or near-term attention.
Qualitative risk analysis supplements information assembled during risk identification and adds new information for each risk about the probability (typically using a High/Medium/Low scale or some other scale that has a limited number of choices) of the risk occurring and the risk impact (again, using a High/Medium/Low or other limited scale). This analysis also results in a relative priority of each risk (relative to the other identified risks). This priority is used to focus attention on most significant risks.
Qualitative Risk Analysis is performed periodically during a project’s life, and is explicitly executed as the list of identified risks change and as project conditions change.
Quantitative Risk Analysis
Think of Qualitative Risk Analysis as a low-cost, streamlined activity that tells the project team which risks warrant further attention. Quantitative Risk Analysis is an in-depth investigation of significant risks that were prioritized during Qualitative Risk Analysis – not all risks merit this level of examination.
Quantitative Risk Analysis assesses a range of project outcomes based upon risks, and will almost always make use of advanced analysis, modeling and simulation techniques. Quantitative Risk Analysis is sheer joy for those who crave a numerical description of risks, providing meaningful figures (e.g., probability of achieving project cost and schedule) under a variety of conditions and assumptions. As in Qualitative Risk Analysis, this process step gives a prioritized list of project risks – this list is a key consideration in planning risk responses.
The Risk Management Plan should explicitly decide, based upon several factors, whether quantitative risk analysis is appropriate for your project. On smaller projects or those projects with few significant risks, quantitative risk analysis may not provide any additional insights beyond the information generated during qualitative risk analysis. Quantitative risk analysis is an advanced skill that may be unfamiliar to the project team, and there may be no opportunities to acquire or build this skill for your project. This project management skill may not be present within the project or executive team – project executives and stakeholders may not comprehend the significance of the generated analysis and as a result may not be able to use this information in making decisions.
Risk Response Planning:
Risk Response Planning develops options and selects actions to take that will enhance opportunities (positive risks) and reduce threats (negative risks) to the project’s objectives. The focus of attention is on priority risks, with little or no effort devoted to lesser risks. This is performed periodically during a project’s life as Qualitative or Quantitative Risk Analyses produce updated risk information.
The results of Risk Response Planning are added to the project’s risk register, including, for each priority risk:
• Classification of the Risk Response (i.e., mitigate, transfer, avoid, accept, exploit, share, enhance)
• Assigned risk owner and, where actions are needed, an agreed schedule of actions
• Risk trigger identification, along with the monitoring method
Risk Monitoring and Control:
Risk Monitoring and Control is continuously performed during a project’s life, and is the primary means of ensuring that risks are being handled properly on a project. Through Risk Monitoring and Control activities, the project incorporates newly arising risks into the Risk Management activities and monitors previously identified risks. This process step ensures that the project always has a valid list of risks to be managing and that proper action is being taken for all prioritized risks.
Risk monitoring includes reviewing the project’s implementation of the risk response plan, keeping tabs on the most significant project risks and revising information in the risk register about each identified risk. Risk control activities ensure that risk identification, analysis and response activities are repeated as project conditions necessitate, as well as conducting risk reassessments, risk reviews, and risk audits. These activities collectively result in periodic revisions to the priority list of risks, risk response plans and status of risk responses actions that are underway.
(5) Conclusion :
Parson, (2013) The Arabian Gulf’s First Major Urban Railway Project, [Online], Available: http://www.parsons.com/projects/Pages/dubai-metro.aspx [20 Jan 2014]
Wikipidia, (2014) Dubai Metro, [Online], Available: http://en.wikipedia.org/wiki/Dubai_Metro [20 Jan 2014].
Al hammadi. A,(2013) Dubai Rail Planning & Design Guidline, [Online], Available: http://www.rta.ae/wpsv5/links/metro/Developer_Guidelines_May_2013.pdf [20 Jan 2014],
Read more: http://www.ukessays.com/essays/construction/a-study-about-dubai-metro-construction-essay.php#ixzz32BFIfEEv
Sustainable Development by Going
Green: A Study of UAE Government Buildings
Table of Contents
Research Problem 3
Research Issues 3
Research Questions 3
Scope of the Research 4
Justification of pursuing the research 4
Research Approach 4
Brief explanation of the chapters 4
Literature Review 5
Research Design 6
Collection of Data, Analysis and Conclusion 6
Results, Conclusion, Limitations of the Study and Scope of Future Research 7
Conversation of government buildings to green buildings 7
Importance of converting government buildings in the UAE into green buildings 9
Will the conversion of government building to green buildings in the UAE be successful? 9
Managerial Implications 9
Appendix 1: Budget Analysis 12
Appendix 2: Stakeholders Diagram 12
Appendix 3: Diagrams and Tables 12
Capstone Experience Overview 13
Topic Selection 13
In the recent past, there have been increased calls to change the existing building into sustainable buildings. By definition, sustainable buildings are those buildings which seek to reduce the negative environmental effects of buildings by ensuring moderations and efficiency in the use of development space, energy and materials. Sustainable buildings employ ecological conservation as well as a conscious approach to the use of energy in the environment. The main idea behind sustainable buildings is to ensure that the decisions and actions that we take today do not hinder the opportunities of generations in the future.
In the United Arab Emirates, the concept of sustainable building has been included in its Vision 2021 document that was released by its cabinet of on the 7th of February 2010. In this document, there is an outline of the problems that are faced by the country as well as how they should be dealt with until 2021. This document also includes green building specifications that are aimed at renovating government buildings to an environment that is friendly and which is in with its goals of keeping the city healthy to the highest standards of sustainable development.
Over the years, many buildings have been constructed that do not follow any guidelines on sustainability. Many buildings have been constructed to fill in the available space without worrying about the generations in the future. In the UAE, there are numerous buildings that have been constructed without taking into consideration the concept of sustainability. This is especially true when one looks at the government buildings in the country. This is a major problem for the country today and for generations to come. The greatest challenge today in the UAE remains converting the existing government buildings into sustainable ones in a bid to achieve sustainability in the long run.
There are various issues that will be present in the in the research. One of the greatest issues will be in the collection of information. In order to ensure that there are no issues in relation to copyright and plagiarism, the researcher will properly cite all the information that has been received from third party. Another issue is in the time constraints. The researcher will need to work harder due to the little time present of carrying out the entire research.
1. How will the conversation of government buildings to green buildings be carried out?
2. Why is it important to convert government buildings in the UAE into green buildings?
3. Will the conversion of government building to green buildings in the UAE be successful?
Objective of the Research
The main objective of this research is to show that the conversion of government buildings to green buildings in the UAE will be very important to the country. It will enable the creation of a friendlier environment for the works and improve their motivation hence enabling them to provide better products and services to the people in UAE. The research will also examine how the conversion of government buildings in into green buildings will be carried out in the country. In doing this, the research will help to show that this process is workable, and can help the country is achieving its Vision 2021.
Scope of the Research
This study will gather information of the efforts that are being taken to ensure that government buildings have been transformed into green buildings. However, this research will only dwell on government buildings, and will not touch on the efforts that the private investors are taking to ensure that their buildings have been transformed into green buildings.
Justification of pursuing the research
In the recent past, the issue of sustainability has gained much attention. This has especially been brought about by the need of ensuring that the decisions and actions of today do not affect generation in the future. The transformation of government buildings into green buildings is one of the areas that ensure sustainability. It is therefore only fair to ensure that the government leads to way in ensuring that sustainability has been achieved.
Time Required for Research (Gantt chart)
Choosing the Research Areas
Conducting Preliminary research
Coming up with the research topic
Coming up with the methodology
Coming With the Literature review
Analysis of the Results
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7
In carrying out this research, the researcher will examine already compiled date to examine the various issues in relation to conversion of government buildings to green buildings. This will be done by first examining the literature review of other articles that have examined this concept, and hence coming with own concept in relation to the study.
Brief explanation of the chapters
The first part of the study is the introduction. This covers various areas including the general introduction of the topic, the research problem, research issues, research questions, objective of the research, scope of the research, justification of pursuing the research, the time requirements for research as well as the research approach.
The second part is the literature review. This section will cover all the topics related to the issue at hand. It will also cover past evidence about the topic, similar research as well as the key issues in relation to the research.
The third part is the research design. This will involve coming up with the method that will be employed in coming up with the data that will be involved in the study. The fourth section is the collection of data, analysis and conclusion. The fifth section will involve coming up with the results, conclusions, limitation of the study as well as the scope for future research. This will be followed by the last section which will involve an examination of the managerial implications of the study.
Chapter 2: Literature Review
Various authors and researches have examined this topic on sustainability and going green. In particular, there has been an increase in interest in how to turn traditional buildings into more sustainable ones.
According to Bauer & Mo¨sle (2012), ensuring sustainable building is achieved through coming up with structures that are resource-efficient and which are environmental responsible all through the business life-cycle. The life-cycle in this case will include designing, constructing, operating, maintaining and even renovating. In order to ensure that his has been achieved, there should be proper cooperation between the client, the engineers, the architects and the design team in the entire project. The entire process is hence one that is aimed at achieving economy, comfort, durability and utility.
According to Fukai (2012) there are three main objectives that need to be achieved to ensure that building has been regarded as a sustainable one. First, it should have efficient use of water, energy and other resources. Secondly, it should protect the health of the occupants and at the same time improve the productively of the employees. Lastly, its construction should be one that is aimed at reducing pollution, waste and any form of environmental degradation.
One of areas that have gained much attention has been ensuring that government buildings have been transformed into green buildings. One of the reason why this has been the case is based on notion that the government should be in the forefront in ensuring sustainability. Being the body that has the mandate of coming up with rules that ensures that organizations are going green, it should lead the way in ensuring that this has been followed to the letter (Mumovic & Santamouris, 2013).
There are various ways that can be employed to help governments to transform their buildings into green buildings. Some of the most notable ones include Estidama, LEED and BREEM. Estidama on one hand is a building design methodology which helps in construction and operation of buildings with the aim of making them more sustainable. LEED, an acronym for Leadership in Energy and Environmental Design, help in setting up a rating system for designing, constructing, operating and maintaining green buildings. The next method is BREEAM (Building Research Establishment Environmental Assessment Methodology). It is used in the assessment, rating as well as certification of sustainability in buildings (Fukai, 2012).
Chapter 3: Research Design
There are various research design methods that are in existence. Some of the most notable ones include secondary research, primary research, qualitative research, quantitative research, case research and mixed method research. Looking at this research, it made use of secondary data. This is a type of data that has already been compiled by other individuals who have carried out a related research. In doing this however, it was important to make use of information from authentic sources. In the use of journals, the research made use of peer review journals while in the use of books, it made use of scholarly books. In doing this, it ensured that only reliable information has been included in the research.
Chapter 4: Collection of Data, Analysis and Conclusion
Based on the fact that the research design that was employed was through the use of secondary data, the most appropriate data collection method was through report. The method of data collection using report involves examining data that is already compiled from different sources, and reporting it in a manner that will ensure that it is relevant with the topic at hand.
Looking at this research, there were various areas in which the data was collected. One of this is the UAE’s Vision 2021 document. This document highlights the specifications that should be adopted on the government buildings to ensure that they are environmentally friendly and in line with the highest standards of sustainable development.
More information was also collected from the Estidama codes. This is a building design methodology that helps in the construction and operations of buildings in a more sustainable manner. These codes have been applied in Abu Dhabi, and can hence be applied in UAE to make the government buildings green.
In the analysis of data, due to the fact that this is secondary data, the use of statistical tools and techniques and analysis of data was not necessary. Instead, the researcher carried out systematic review of the available literature. The information that was collected way presented and analyzed in a systematic manner. In the first part of the analysis, the researcher sought to identify the importance of converting government buildings in the UAE to green buildings. This was followed by an analysis of the manner in which this form of conversion will be carried out. Lastly, the researcher sought to ascertain whether this conversion process would be a success.
In conclusion therefore, it was very important to collect authentic data which would easily be analyzed. In doing this, it enabled the researcher to come up with the right results and limitation of the study.
Chapter 5: Results, Conclusion, Limitations of the Study and Scope of Future Research
Conversation of government buildings to green buildings
There are three options that will be available as the government seeks to change the buildings into more sustainable ones. This will include moving the employees to another section of the government building, moving them to another facility or having new extensions, refurbishments and additions to the existing buildings. The third option will be most appropriate since it will enable the saving of more costs. After this has been ascertained, the government will make the use of Estidama codes in the conversation process.
The use of Estidama codes can help in the conversion of government buildings in the UAE to green buildings. This code is made up of four pillars: Environmental, Economic, Social and Cultural.
Diagram 1: Pillars of Estidama
Under the Estidama, there is the Pearl Rating System that can help to engage in sustainable building practices in the country. There are various levels of certification that for a building to be considered green. Since this process will involve the transformation of government buildings to green buildings, two pearls will be required. There are seven categories in this system that the government will need to adhere to so as that its buildings can be considered as green buildings.
The first category is the integrated development process. The initial process of turning a government building into a sustainable one is promoting cross-disciplinary teamwork. This will be aimed at delivering quality and environmental management all through the life of the project.
This will be followed ensuring that the natural systems have been protected. The natural systems are responsible for the provision of resources in the government buildings. Therefore, their conservation and preservation is critical in ensuring that these buildings are transformed effectively.
The next category is ensuring that the building is livable. A green building is one that is able to provide proper comfort to all the people working in it. This can be achieved by improving the connectivity and quality of indoor and outdoor spaces.
The next important category is acknowledging that water is a very precious category. In order to ensure sustainability, the relevant personnel in the government building should reduce the demand for water and at the same time ensure that it been distributed in an effective manner.
The will be following by recognizing the resourcefulness of energy. The government will need to target measures that will conserve energy through making use of passive design measures, ensuring energy efficiency and at the same time making use of renewable sources of energy.
It will also be important to consider the stewardship of materials. This will be achieved by making considerations on the ‘whole-of-life cycle in the selection and specification process of materials.
Lastly, it will always be important to encourage innovation in construction and design of government offices in order to ensure sustainability in the future.
Importance of converting government buildings in the UAE into green buildings
In the analysis of data, the research came up with various benefits of converting government buildings into green buildings in the United Arab Emirates. One of the most notable benefits is the reduction in the total energy use. Researches have shown that sustainable buildings can reduce the total energy used by up to 30%. Moreover, they also help in reducing water consumption. The UAE, being a desert country, is high conscious of water consumption. Therefore, with the introduction of green buildings, the level of water consumption can go down to up to 12%. Moreover, these buildings can also help in the reduction of carbon dioxide emissions. Their proper introduction can help to reduce the carbon dioxide emissions by up to 38%.
On the social front, the researcher found out that there are various benefits that UAE can enjoy if it introduced the green buildings. First, the buildings will enhance occupational health and conform. Moreover, these buildings usually improve aesthetic qualities. This means that the buildings appear beautiful to outsiders. Lastly, if the government buildings were changed into green buildings, it will reduce the strain experienced in the local infrastructure. Lastly, the overall quality of life will be improved through converting government buildings into green buildings.
Will the conversion of government building to green buildings in the UAE be successful?
The conversion of government buildings to green building in the UAE will be a success. Since the country will be making use of a strategy that has been successful in Abu Dhabi, there are very high chances that it will be successful. In addition, the country will use this is a benchmark, and hence the chances of it will take it considerations all the successes and ignore all the failure.
In conclusion, looking at this research, it is clear that the conversion of government buildings into green buildings is a very important process. Having been practiced in Abu Dhabi and having been successful, then it would be a good idea to practice this process in the country. In doing this, it will ensure the country has been able to save resources such as water and energy, and at the same time ensure that the buildings gain more aesthetic value.
Chapter 6: Managerial Implications
This research can be very useful to top managers. Being individuals who are involved in the decision process of an organization, after examination of this research, they may decide to transform their organization into a green organization. This may also be useful to the middle managers. These individuals are in direct interaction with the top management. They therefore can offer suggestion to the top management on how to transform the organization into a green organization. Looking at the line managers, they are the individuals who are responsible for the day to day running of the organization. In the examination of this research therefore, these individuals can gain information on how they can transform their various departments into green departments.
As a whole, my organization can greatly benefit in understanding how organizations can be transformed into green organizations. It will understand that there is an increased need for the various institutions to go green, and should hence not be left behind.
Bauer, M., & Mo¨sle, P. ,2012. Green building: guidebook for sustainable architecture. Heidelberg: Springer.
Fukai, D. ,2012. Being sustainable: building systems performance. Archer, FL: Insitebuilders.
Mumovic, D., & Santamouris, M. ,2013. A Handbook of Sustainable Building Design and Engineering. London: Routledge.
Appendix 1: Budget Analysis
Consultation and supervision services
AED 7 Million
implementation of the green building specifications AED 15 million
contractors fees AED 19 million
contingency budget AED 6 Million
Total AED 47 million
Appendix 2: Stakeholders Diagram
Appendix 3: Diagrams and Tables
Diagram 1: Pillars of Estidama
Table 1: Pearl Building Rating Levels
Capstone Experience Overview
I have had a very good experience in carrying out this research. In doing this, I have gained the proper experience of carrying out a research and coming up with the proper findings. In the days to come therefore, I will not have any problems carrying out my research and even conducting my thesis at the end of the course.
I came up with this project after realizing that there has been an increase in debate of the reasons why it is necessary to go green. I also realized that there are many organizations that have take up the initiative to go green
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