**2. Review of references**

Infrastructure projects most frequently involve the arrangement of an infrastructure building into a space (environment), which is why their success depends not only on internal factors, such as the client and contractor, but to a large extent also on external factors related to the environment. These factors aim to influence a project from various points of view; some of them support the project and want to make a positive contribution to the progress and success of the project, while others are completely or only partially against the execution of the project and are prepared to have a negative impact on the project. The execution of such projects is frequently considerably influenced by decisions of the government and the competent ministries. The mentioned impact factors may cause risk events on an infrastructure project, which may in turn have a very negative impact on the progress of the project, particularly on the execution time, on the costs, and often on the quality of the project deliverables.

Generally, risk management is a constituent part of the risk management strategy of a company and represents an important element in decision-making processes [1]. Infrastructure projects are particularly sensitive in terms of risks, because the risk events from similar previously executed projects only seldom repeat in a similar form and with a similar probability of their occurrence and consequences. Risk management in these projects is especially demanding, so it is important which risk management techniques are employed. Analyses show that financial and economic factors and quality are the most important risk factors that industry tries to avoid or transfer to other stakeholders [2].

The awareness or understanding that a risk may exist is in practice the most important aspect of risk analysis and management. How the participants understand the need for the treatment of each risk separately is therefore important for risk management [1].

As indicated by Hameed and Woo, numerous papers deal with the topic of risk management, yet the majority of research only includes risk management results from developed countries and only a very few from underdeveloped ones [3].

**3**

**Table 1.**

*Standard Risk Management Model for Infrastructure Projects*

its impact and based on an individual project activity.

ous risk management methodologies is shown in **Table 1** [9].

Slovenia belongs to the group of medium-developed European countries, even though a detailed analysis on the management of infrastructure projects has not yet

Yafai [4] says that risks are treated in each infrastructure project differently, particularly based on an assessment of the probability of risk event occurrence and

A variety of methodologies dealing with project management and consequently with the related risks can be found in literature. In practice, the most frequently applied methodology is the one proposed by the Project Management Institute [5]. Of the nine bodies of knowledge required for successful project management, it provides guidelines for risk identification, analysis, and response to project risks. Among other risk management methodologies, certain approaches warrant mention: PRINCE [6], which is mostly used in IT projects; DOD Risk Management [7], which is used for military industry projects; and a host of other methodologies [8]. A comparison of vari-

An important earmark in risk management is a proactive approach, which is explained in detail by Smith and Merritt in the book *Proactive Risk Management* [10]. They suggest various risk analysis and evaluation models (standard, simple, cascade, and Ishikawa risk models) and tools that project stakeholders can use for recording, prioritising, solving and monitoring

One important tool for project risk identification and analysis is a risk breakdown structure that systematically breaks down potential risks on several levels [11] and provides possible breakdowns for various project types. He suggests that the risk in infrastructure projects is divided into three levels: on the first level, he differentiates among risks that result from (1) environment, (2) contractors,

Of course, major risk drivers may differ depending on the project type and the environment in which a project is carried out. Importantly, a project team responsible for project execution must identify all possible risk drivers on the project in question and break them down on several levels in order to facilitate a correlation between risk factors and project activities. An Ishikawa diagram can be used to

**PMBOK 2013 PRINCE2 DOD risk management**

Perform qualitative risk analysis Risk mitigation planning

communicate

Plan risk responses Risk plan Risk mitigation plan implementation

Assess risk Cluster analysis

Risk tracking

Plan risk management Identify risk Identify risk

*DOI: http://dx.doi.org/10.5772/intechopen.83389*

been made.

reactions to project risks.

(3) client, and (4) project.

identify risks [9].

Identify risks

analysis

Perform quantitative risk

Monitor and control risks Implement and

*Overview of several models for project risk management [9].*

*Risk Management in Construction Projects*

(positioned below the threshold line).

tional) projects will be presented.

quality of the project deliverables.

risk management [1].

**2. Review of references**

factors.

product of the risk likelihood occurrence and its impact is plotted on the y-axis. A threshold line of expected losses divides the risks into critical risks (positioned above the threshold line of anticipated losses in the risk map) and less critical risks

The standard model also allows an analysis of the consequences of the measures adopted and designed to eliminate or at least mitigate the expected risks both on the side of risk event drivers and on the side of risk impact drivers (there may be only a single or several drivers in both cases). In the risk map, the adopted measures represent a change in the risk position, the final goal being a shift of all critical risks below the threshold line of expected losses, i.e., below the limit of a still acceptable loss, by using the adopted measures in both risk

The use of the suggested model will be illustrated using the example of an infrastructure project for the erection of a reservoir for a hydroelectric power plant on the Lower Sava River. The advantages and drawbacks of using the standard risk management model in the practical implementation of infrastructural (construc-

Infrastructure projects most frequently involve the arrangement of an infrastructure building into a space (environment), which is why their success depends not only on internal factors, such as the client and contractor, but to a large extent also on external factors related to the environment. These factors aim to influence a project from various points of view; some of them support the project and want to make a positive contribution to the progress and success of the project, while others are completely or only partially against the execution of the project and are prepared to have a negative impact on the project. The execution of such projects is frequently considerably influenced by decisions of the government and the competent ministries. The mentioned impact factors may cause risk events on an infrastructure project, which may in turn have a very negative impact on the progress of the project, particularly on the execution time, on the costs, and often on the

Generally, risk management is a constituent part of the risk management strategy of a company and represents an important element in decision-making processes [1]. Infrastructure projects are particularly sensitive in terms of risks, because the risk events from similar previously executed projects only seldom repeat in a similar form and with a similar probability of their occurrence and consequences. Risk management in these projects is especially demanding, so it is important which risk management techniques are employed. Analyses show that financial and economic factors and quality are the most important risk factors that

The awareness or understanding that a risk may exist is in practice the most important aspect of risk analysis and management. How the participants understand the need for the treatment of each risk separately is therefore important for

As indicated by Hameed and Woo, numerous papers deal with the topic of risk management, yet the majority of research only includes risk management results from developed countries and only a very few from underdeveloped ones [3].

industry tries to avoid or transfer to other stakeholders [2].

**2**

Slovenia belongs to the group of medium-developed European countries, even though a detailed analysis on the management of infrastructure projects has not yet been made.

Yafai [4] says that risks are treated in each infrastructure project differently, particularly based on an assessment of the probability of risk event occurrence and its impact and based on an individual project activity.

A variety of methodologies dealing with project management and consequently with the related risks can be found in literature. In practice, the most frequently applied methodology is the one proposed by the Project Management Institute [5]. Of the nine bodies of knowledge required for successful project management, it provides guidelines for risk identification, analysis, and response to project risks. Among other risk management methodologies, certain approaches warrant mention: PRINCE [6], which is mostly used in IT projects; DOD Risk Management [7], which is used for military industry projects; and a host of other methodologies [8]. A comparison of various risk management methodologies is shown in **Table 1** [9].

An important earmark in risk management is a proactive approach, which is explained in detail by Smith and Merritt in the book *Proactive Risk Management* [10]. They suggest various risk analysis and evaluation models (standard, simple, cascade, and Ishikawa risk models) and tools that project stakeholders can use for recording, prioritising, solving and monitoring reactions to project risks.

One important tool for project risk identification and analysis is a risk breakdown structure that systematically breaks down potential risks on several levels [11] and provides possible breakdowns for various project types. He suggests that the risk in infrastructure projects is divided into three levels: on the first level, he differentiates among risks that result from (1) environment, (2) contractors, (3) client, and (4) project.

Of course, major risk drivers may differ depending on the project type and the environment in which a project is carried out. Importantly, a project team responsible for project execution must identify all possible risk drivers on the project in question and break them down on several levels in order to facilitate a correlation between risk factors and project activities. An Ishikawa diagram can be used to identify risks [9].


#### **Table 1.**

*Overview of several models for project risk management [9].*
