Preface

Writing a book is a tedious undertaking but for an academic it is cathartic because you get an opportunity to tell the world about things that you have always wanted to. It gives ample time and space to explain your perspective without being too cautious of the space limitations. I have worked in the industry for more than 20 years as a quantity surveyor and I have always been interested in knowing more about what is risky, how to determine risk, and how to avoid it or minimize it but using systematic relevant approaches. I have come to realize that when it comes to risk you have to know the context and apply the tools that could be efficacious in that environment especially when the challenges are not purely technical.

When I took the challenge of editing this book I soon realized that one has to absorb a lot of information from many sectors and immediately guide the writer to stay very close and be relevant to the theme, but at the same time give them space to express themselves. It was not an easy task because a lot had to be chopped off that was not considered to be relevant to the theme. To those authors who did not make the cut I would love to encourage them to look for other opportunities to tell the world their perspectival appreciation of their chosen subject. Their contributions matter and their importance surpasses and goes beyond this particular publication. So not being published should not be regarded as a train smash.

Reading chapters was the most fulfilling part of the whole exercise because you get to learn many different approaches to risk. You also get to learn whether people have particular and/or different interpretations of risk. What I would love to have seen more of was how culture influences the way practitioners deal and appreciate risk. But what we have in this book is exceptional and intense in the sense that it equips the learner and gives an intimate panoramic view of how people interpret risk. Beyond just reading the chapters the administration work involved was handled superbly well and I would love to take this opportunity to thank the publishers for their professionalism, dedication, patience, and prowess in assisting me in making sure that only the work of the highest quality was published.

I thank everyone who has contributed to making this project a success. It is a shared glory and it should not belong to any one individual alone. Doing so will deprive it of its proper glow and dampen its deserved shine.

> **Dr. Nthatisi Khatleli** University of the Witwatersrand, Johannesburg, South Africa

**1**

**Chapter 1**

**Abstract**

acceptable level of the expected losses.

components associated with the project.

hydroelectric power plant

**1. Introduction**

**Keywords:** risk management, standard model, risk map, risk control,

Infrastructure projects are one constant in our lives that interfere in our living environment and commonly involve huge investment costs. When managing such projects, the focus is mainly on the management of the content of work, times, resources, and costs. Risk management, however, is often neglected. Most frequently, the most important risks of the entire project are identified, and the measures to mitigate their consequences are prepared. Yet a project team lacks the time and motivation to prepare a more profound assessment of risks of individual

The paper will illustrate the use of the standard risk management model, which includes the identification of risk event drivers, the assessment of probability of a risk event, and the identification of impact drivers caused by a risk event and the probability of its impact. The identified probability of the occurrence of a risk event and the probability of its impact serve as a basis for calculating the expected loss, most often in terms of time, money, or quality. The calculated losses can be represented in a so-called risk map, into which losses are plotted on the x-axis, while the

Standard Risk Management Model

This paper outlines a risk management method that is based on the use of a standard risk management model and is adapted to the specific nature of infrastructure projects. The standard model can be used to identify and quantify unexpected events in planning and executing a project. The use of a risk map will also be illustrated. A risk map can serve to classify the identified and quantified risk events, depending on the expected loss, to critical risks that call for a more in-depth treatment, and non-critical risks that are normally not monitored, while no measures are foreseen in advance. A risk map is used to determine what the anticipated effects of the measures to mitigate the critical risks will be, and how the anticipated measures enable the transition from a critical risk to a non-critical risk. In this article, the suggested risk management is illustrated using the example of the erection of a reservoir for a hydroelectric power plant. The use of the proposed tools for the identification, assessment, prioritisation, and management of risks proved highly successful. With the use of the proposed risk model, the critical risk events were lowered under the

*Lidija Rihar, Tena Žužek, Tomaž Berlec and Janez Kušar*

for Infrastructure Projects
