1 AIT Asian Institute of Technology

Risk management in the context of privately-financed transportation project procurement : the development of a computer-based `Risk-Management Decision-Support (RMDS) System'

AuthorSrikhanta, Sri Shantha
Call NumberAIT Thesis no. ST-98-43
Subject(s)Risk management

NoteA thesis submitted in partial fulfillment of the requirements for the degree of Master of Engineering, School of Civil Engineering
PublisherAsian Institute of Technology
AbstractMany governments have started to procure major public constructions by authorizing the private sector to finance, develop, construct & complete, operate & maintain, earn revenue for a allowed period, and then transfer to the host government at no cost since 1980s. This approach is called Privately-Financed (PF) project procurement throughout the study. The literature introduces this approach in different forms of definitions. Both the developing and the developed countries use this method since there are much advantages and benefits. However, the private sector, through the project sponsor/concession companies has to bear higher risks than in a normal project. In the context of PF project procurement, the project, events, and sources are highly uncertain due to size, complexity, and location. Though the situation seems to be that, the project sponsors, who are mainly civil engineering design and/or construction firms, rarely apply Construction Risk Management (CRM) during the feasibility study period, before making bid/no-bid decision. There are reasons responsible for that. This research was done .to develop a 'CRM Methodology' and a computer-based 'RiskManagement Decision-Support (RMDS) System'. The CRM Methodology shows a procedure to manage project risk, events risks, and risk sources. The RMDS System supports through the provision of automated mechanism facilities to identify, analyze and evaluate, analyze the decisions, and make the decisions throughout the application of CRM Methodology during the development phase mainly. And it shows a way to measure the total project risk and events risks through a combination of qualitative and quantitative aspects. Both the Methodology and the System concern quantitative and qualitative aspects of project risks in a comprehensive manner. The Methodology and the System can be used during construction & completion and operation & maintenance phases too to a considerable extent. Probability analysis, range estimates, sensitivity analysis, cash flow analysis, influence diagramming technique, analytical hierarchy process, and multiple-criterion decision-making were used as the techniques to develop the RMDS system. Expert Choice Professional decision support software and Excel 97 spreadsheets were used as tools to develop the RMDS system. The RMDS System supports the risk manager, decision analyst, and decision-maker effectively and efficiently, and in a comprehensive manner to make the bid/no-bid decision mainly at the development phase of a PF Transportation (PFT) project. It supports at four stages i.e. at the risk identification, risk analysis & evaluation, risk response decision analysis, and risk response decision-making. It evaluates the total risk exposure and total risk-concerned mean value of a PFT project and total risk exposures and total risk-concerned mean values of each events of a PFT project through an automated mechanism of the RMDS System when the base estimates of events/sources and their range estimates and probabilities of range estimates are inserted. And then, risk analysis and risk response decision analysis can be done. It is recommended that project sponsor/concession companies use this CRM Methodology and RMDS System through the development phase to identify risk events, sources, and consequences, analyze and evaluate total risk exposures and total risk-concerned mean values to the project and events, and analyze the decisions made on risk events and sources, and make the final decisions on risk events and sources and finally bid/no-bid decision. The RMDS System is recommended to be used during the other two phases as mentioned above.
Year1998
TypeThesis
SchoolSchool of Civil Engineering
DepartmentOther Field of Studies (No Department)
Academic Program/FoSStructural Engineering (STE) /Former Name = Structural Engineering and Construction (ST)
Chairperson(s)Ogunlana, Stephen O.;
Examination Committee(s)Chotchai Charoenngam; Batanov, Dentcho N. ;
Scholarship Donor(s)DAAD;
DegreeThesis (M.Eng.) - Asian Institute of Technology, 1998


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