Practical Risk Management for EPC / Design-Build Projects. Walter A. Salmon

      1 proactively identifying the major potential hazards/risks for the Project as early as possible (and revisiting/redoing that exercise regularly throughout the entire duration of the Project);

      2 properly analysing and assessing each of the identified hazards/risks in turn, so that sound commercial decisions can be reached as to what the most appropriate response to each should be;

      3 putting in place adequate mitigation measures where necessary to counter those hazards/risks; and

      4 regularly monitoring the effectiveness of employing the hazard/risk mitigation measures and making appropriate modifications if later those measures are found to be ineffective.

      1 Some hazards may threaten the Project's progress, such as delays in the engineering work, delays in the procurement work for key equipment and materials, construction delays, commissioning delays, and start-up delays. Hazards having such effects include, but are certainly not limited to, the following:an inadequate and/or inexperienced Design Team;a dramatic change in the economy leading to increased demand for products and consequent higher costs (requiring extra time to shop around for better prices);importation and transportation delays owing to bad management of the logistics support activities;inadequate or poor-quality labour resources (particularly in respect of local Subcontractors); andpoor quality control of construction work (leading to long lists of ‘Punch Items’ and the consequent late redoing of critical work).

      2 In countries where the political landscape is unstable, there may be the potential for additional significant hazards:an armed attack on the accommodation camp or the worksite, thereby putting the security of personnel at grave risk;importation of materials, goods, and equipment becoming a major problem, due to problems with trade tariffs or arguments over import duties payable, or even due to the lack of newly-required ‘support’ documentation (especially when dealing with governmental authorities);the local communities blockading the worksite if they feel aggrieved at the perceived high numbers of foreign workers while the locals themselves do not have jobs; andcurrency exchange rates unexpectedly and dramatically moving in the wrong direction (from the Contractor's perspective).

      3 There will be everyday hazards that impact the safety of the on-Site construction workers, such as working at height, operating heavy equipment, lifting heavy loads, working in deep trenches or in confined locations, pressure testing of pipework and equipment, energising high voltage electrical equipment, etc. There could also be hazards that will impact the environment, such as spillages of toxic materials, chemical leakage into water systems, etc. These all fall under the domain of a Contractor's Health, Safety, and Environmental (HSE) Management Department, in many of which very sophisticated procedures and routines are employed nowadays. Top priority must always be given to safeguarding individuals from harm, while at the same time protecting the environment. Thus, since these standard day-to-day risks should already be competently managed by the Contractor's designated HSE personnel, those risks are not the direct focus of this book.