**1. Introduction**

Risk is the chance of something happening that has an impact upon objectives. It is measured in terms of consequences and likelihood. Probability, likelihood, and chance are used synonymously, as also are consequences and impact. Everyone struggles to understand and deal with many risk situations—from a domestic to corporate level, personal to national level, activity to project level. Management of projects can be improved by raising awareness about risks, and then implementing formal processes to deal with them. Construction projects are fundamentally susceptible to risks. Projects can be successful if managers plan for risks—planning, identifying, analyzing, and providing response for undesirable events that can occur. Choudhry and Iqbal [1] reveal that risk management is a new area in the construction sector and is attaining importance in the construction industry. The application of systematic risk management system is necessary for managing project risks [1]. Risk management can be applied successfully

by identifying the risk sources connected with activities of the project. These risks are quantified in terms of likelihood and impact. Akintoye and Macleod [2] revealed that risk affects the performance, quality, budget and productivity of projects in construction. The strategy is to decrease the probability and impact of a risk [3]. Dikemen et al. [4] defined risk management as a systematic procedure of controlling risk. Choudhry and Iqbal [1] defined risk management as a stepwise process comprising on identification, analysis and risk response. Other researchers defined risk analysis as the procedure of evaluating identified risk and opportunities for their magnitude to proceed for a matching response in the light of limited funds.

Projects related to construction are complicated because they contain a range of human and non-human factors. These projects are started in complicated and vibrant environment resulting in high uncertainty, which are multifaceted by challenging time restraints [5]. Identifying and analyzing prospective risks can increase effective completion of the project. Risk management offers an opportunity for project stakeholders to review the project through a collective dialog, to recognize better and evaluate the prospective problems and then formulate a suitable response [6].

Various methods and models are developed by investigators to analyze risks. A decision support framework called as Advanced Programmatic Risk Analysis and Management Model (APRAM) is useful for risk management [7, 8]. Nasir et al. [9] devised a schedule risk model called as Evaluating Risk in Construction—Schedule Model (ERIC-S) that estimates the pessimistic and optimistic duration of activities. Ökmen and Öztas [10] proposed the Construction Schedule Risk Analysis Model (CSRAM) that evaluates schedule networks under uncertainty when duration of activities and risk factors are correlated. All these models evaluate either the time schedule risks, cost risks or both.

Risk management is vital in construction to minimize losses and improving profitability [2]. Williams et al. [11] proposed a method of risk management. Complicated projects, such as metro rail contains risks from the feasibility stage, construction to commissioning. Risks in heavy construction have a direct impact on the cost, schedule and performance. Reilly and Brown [12] reveal that infrastructure underground metro is inherently complex project having uncertain and variable ground situations. For these kinds of projects, it is vital to identify risk as early as possible in the project [12]. A risk management plan, if developed would ensure smooth attainment of project goals within given time, cost and quality. Moreover, it can safeguard better safety throughout the construction process and operative stage of the project.

Uncertainties in on-site and off-site project activities often result in the risk of delays and schedule overruns in construction projects. A risk analysis approach that assesses the integrating impact of uncertainties [13] show that growth in project size and work quantities intensifies pair and group interconnection of tasks within and between groups of on-site and off-site activities, resulting in lengthened completion times and deviations from project plans. Vu et al. [14] revealed that prolonged schedule delays have an extremely detrimental impact on a project's efficiency, cost and investment reputation.

Experienced experts are involved in analysis of risks qualitatively. Analyst needs to systematic and experienced to identify effectively internal or external risks. Mulholland and Christian [5] reveal that the decision maker makes the best use of experience and information in identifying risks. Akintoye and Macleod [2] reveal that an individual's attitudes, beliefs, and judgment can influence risk perception. Many professionals find that risk identification and risk analysis require involvement of experts and advanced techniques [1].

**137**

*Risk Analysis Related to Cost and Schedule for a Bridge Construction Project*

Choudhry and Iqbal [1] reveal that formal risk management is a rare in the construction industry of Pakistan. The authors explained that contractors are not practicing risk management formally. Major barriers to risk management are non-adaptation of formal risk management system [1]. Projects in the construction industry suffer in terms of low productivity, cost overruns and poor quality due not conducting risks management [1, 2]. The country is confronting the trauma of bridge failures and loss of lives every year due to floods. There is a need to develop risk analysis guidelines to avoid bridge failures. This chapter is to identify risks and critically rank them that affect the performance of project time and cost. Monte Carlo (MC) simulation on a case study project determines that risk analysis is helpful in managing schedule and costs risks. Identifying and analyzing schedule and costs risks on bridge project, this work makes a unique contribution and provides an

This work focuses on risk analysis by including a case study bridge project. The research investigates the impact of risks on costs, schedule and suggest guideline for bridge projects. To collect, data, a questionnaire is designed based on the previous studies [1, 15]. The questionnaire includes questions related to respondent identification, years of experience and 37 risk factors. Among the 37 risk factors, 7 are adopted from Choudhry and Iqbal [1], 8 are from Masood and Choudhry [15], 11 from the pilot survey, and 11 are developed by the researcher. These 37 risk factors are divided into 7 categories: design risks, contractual risks, construction risks, management risks, financial risks, health and safety risks,

A pilot study is performed with a panel comprising five professionals having over 20 years of experience in construction. The questionnaire is modified based upon the pilot study. Based on importance of impact on the bridge project performance, respondents ranked each risk factor on a 5-point Likert scale (5 = extra ordinary, 4 = major, 3 = moderate, 2 = minor, 1 = insignificant). The respondents comprised on managers and engineers involved with numerous bridge projects. The targeted population for this work included private and public sector clients, consultants, and contractors. These include around 7000 enterprises that are involved in bridge construction projects and are registered with the Pakistan Engineering Council.

According to Dillman et al. [16], a sample size of 61 is fine with ±10% sampling error and a 95% confidence level. The respondents are approached through e-mails and personal visits to construction sites. Overall, 100 surveys forms are distributed on 25 construction sites. The response rate for this survey is 77%, but only 69 are analyzed. Eight surveys forms are not filled properly and thus discarded. Black et al. [17] stated that a 30% response rate is satisfactory in construction. The composition of the respondents is 35% public clients, 10% private clients, 12% contractors and 43% consultants. Public clients own most of the bridge projects. A majority of respondents are civil engineers holding a bachelor's degree with over 16 years of experience. In addition, 25 interviews are conducted; one at each project. These interviews delivered valuable information about risk management

The collected data are analyzed by using a software called as Statistical Package for the Social Sciences (SPSS). Statistical techniques such as preliminary analysis, internal consistency analysis, relative importance index, Pearson's product–moment

*DOI: http://dx.doi.org/10.5772/intechopen.83501*

insight into the risk management concepts.

**2. Method**

and external risks.

and risk analysis guidelines.

correlation are used in the analysis.

*Risk Analysis Related to Cost and Schedule for a Bridge Construction Project DOI: http://dx.doi.org/10.5772/intechopen.83501*

Choudhry and Iqbal [1] reveal that formal risk management is a rare in the construction industry of Pakistan. The authors explained that contractors are not practicing risk management formally. Major barriers to risk management are non-adaptation of formal risk management system [1]. Projects in the construction industry suffer in terms of low productivity, cost overruns and poor quality due not conducting risks management [1, 2]. The country is confronting the trauma of bridge failures and loss of lives every year due to floods. There is a need to develop risk analysis guidelines to avoid bridge failures. This chapter is to identify risks and critically rank them that affect the performance of project time and cost. Monte Carlo (MC) simulation on a case study project determines that risk analysis is helpful in managing schedule and costs risks. Identifying and analyzing schedule and costs risks on bridge project, this work makes a unique contribution and provides an insight into the risk management concepts.

### **2. Method**

*Perspectives on Risk, Assessment and Management Paradigms*

of limited funds.

schedule risks, cost risks or both.

efficiency, cost and investment reputation.

ment of experts and advanced techniques [1].

of the project.

by identifying the risk sources connected with activities of the project. These risks are quantified in terms of likelihood and impact. Akintoye and Macleod [2] revealed that risk affects the performance, quality, budget and productivity of projects in construction. The strategy is to decrease the probability and impact of a risk [3]. Dikemen et al. [4] defined risk management as a systematic procedure of controlling risk. Choudhry and Iqbal [1] defined risk management as a stepwise process comprising on identification, analysis and risk response. Other researchers defined risk analysis as the procedure of evaluating identified risk and opportunities for their magnitude to proceed for a matching response in the light

Projects related to construction are complicated because they contain a range of human and non-human factors. These projects are started in complicated and vibrant environment resulting in high uncertainty, which are multifaceted by challenging time restraints [5]. Identifying and analyzing prospective risks can increase effective completion of the project. Risk management offers an opportunity for project stakeholders to review the project through a collective dialog, to recognize better and

Various methods and models are developed by investigators to analyze risks. A decision support framework called as Advanced Programmatic Risk Analysis and Management Model (APRAM) is useful for risk management [7, 8]. Nasir et al. [9] devised a schedule risk model called as Evaluating Risk in Construction—Schedule Model (ERIC-S) that estimates the pessimistic and optimistic duration of activities. Ökmen and Öztas [10] proposed the Construction Schedule Risk Analysis Model (CSRAM) that evaluates schedule networks under uncertainty when duration of activities and risk factors are correlated. All these models evaluate either the time

Risk management is vital in construction to minimize losses and improving profitability [2]. Williams et al. [11] proposed a method of risk management. Complicated projects, such as metro rail contains risks from the feasibility stage, construction to commissioning. Risks in heavy construction have a direct impact on the cost, schedule and performance. Reilly and Brown [12] reveal that infrastructure underground metro is inherently complex project having uncertain and variable ground situations. For these kinds of projects, it is vital to identify risk as early as possible in the project [12]. A risk management plan, if developed would ensure smooth attainment of project goals within given time, cost and quality. Moreover, it can safeguard better safety throughout the construction process and operative stage

Uncertainties in on-site and off-site project activities often result in the risk of delays and schedule overruns in construction projects. A risk analysis approach that assesses the integrating impact of uncertainties [13] show that growth in project size and work quantities intensifies pair and group interconnection of tasks within and between groups of on-site and off-site activities, resulting in lengthened completion times and deviations from project plans. Vu et al. [14] revealed that prolonged schedule delays have an extremely detrimental impact on a project's

Experienced experts are involved in analysis of risks qualitatively. Analyst needs

to systematic and experienced to identify effectively internal or external risks. Mulholland and Christian [5] reveal that the decision maker makes the best use of experience and information in identifying risks. Akintoye and Macleod [2] reveal that an individual's attitudes, beliefs, and judgment can influence risk perception. Many professionals find that risk identification and risk analysis require involve-

evaluate the prospective problems and then formulate a suitable response [6].

**136**

This work focuses on risk analysis by including a case study bridge project. The research investigates the impact of risks on costs, schedule and suggest guideline for bridge projects. To collect, data, a questionnaire is designed based on the previous studies [1, 15]. The questionnaire includes questions related to respondent identification, years of experience and 37 risk factors. Among the 37 risk factors, 7 are adopted from Choudhry and Iqbal [1], 8 are from Masood and Choudhry [15], 11 from the pilot survey, and 11 are developed by the researcher. These 37 risk factors are divided into 7 categories: design risks, contractual risks, construction risks, management risks, financial risks, health and safety risks, and external risks.

A pilot study is performed with a panel comprising five professionals having over 20 years of experience in construction. The questionnaire is modified based upon the pilot study. Based on importance of impact on the bridge project performance, respondents ranked each risk factor on a 5-point Likert scale (5 = extra ordinary, 4 = major, 3 = moderate, 2 = minor, 1 = insignificant). The respondents comprised on managers and engineers involved with numerous bridge projects. The targeted population for this work included private and public sector clients, consultants, and contractors. These include around 7000 enterprises that are involved in bridge construction projects and are registered with the Pakistan Engineering Council.

According to Dillman et al. [16], a sample size of 61 is fine with ±10% sampling error and a 95% confidence level. The respondents are approached through e-mails and personal visits to construction sites. Overall, 100 surveys forms are distributed on 25 construction sites. The response rate for this survey is 77%, but only 69 are analyzed. Eight surveys forms are not filled properly and thus discarded. Black et al. [17] stated that a 30% response rate is satisfactory in construction. The composition of the respondents is 35% public clients, 10% private clients, 12% contractors and 43% consultants. Public clients own most of the bridge projects. A majority of respondents are civil engineers holding a bachelor's degree with over 16 years of experience. In addition, 25 interviews are conducted; one at each project. These interviews delivered valuable information about risk management and risk analysis guidelines.

The collected data are analyzed by using a software called as Statistical Package for the Social Sciences (SPSS). Statistical techniques such as preliminary analysis, internal consistency analysis, relative importance index, Pearson's product–moment correlation are used in the analysis.

In addition, a case study of a bridge project is documented to establish costs and time risk analysis. The researcher obtained assistance from the five-member expert panel (comprising on scheduling manager, project manager, resident engineer, construction manager, an academia) and Monte Carlo simulation to analyze risks on of the case study project. The panel members are having more than 20 years of experience in industry and academics. This panel identifies the risks relevant to the case study project and assigned probability to the risk factors. This panel assigned the probabilistic (optimistic, most likely, pessimistic) durations and costs in Pakistan Rupees (PKR). These probabilistic durations and costs permitted us to practice triangular distribution in Primavera Pertmaster. A 3 days' workshop is held with the attendance of all panel members. Their involvements for the risk analysis are documented.
