Dynamic Risk Assessment in Complex Mega-projects: Integrated Approach of Analytical Network Process and System Dynamics

Project: Research

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Researcher(s)

Description

Megaproject developments are increasingly becoming very complex. The cost of construction is one of the most significant attributes of megaprojects. Very large value megaprojects with over one billion US dollars generally represent more risk in achieving project objectives. Performance periods for such projects are generally longer (in excess of three years), indicating more social, technical, economic, environmental and political challenges and performance risk. They are characterized with complex acquisition strategy and delivery methods such as contract type, pricing, solicitation, evaluation, and compensation methods to allocate risk between the contracting parties.Despite the challenges faced during development, project owners and financiers continue to invest large sums of money in such projects that run a high risk of being well over schedule and budget. With globalization increasing rapidly, a common challenge is how to integrate social, technical, economic, environmental and political uncertainties into management decisions throughout the lifecycle of such large projects. While some degree of cost and schedule uncertainty is with highly complex, the question becomes how can the industry predict financial and schedule impacts of these uncertainties and employ mitigation strategies to limit their impact.In today’s quest to achieve stronger project performance, there is the need as the “next new thing” for effective tools and techniques to accurately predict and manage risks from the external project macro environmental point of view. As a result, this research seeks to develop a new approach to risk management for megaproject development at the construction stage based on the British Standards for risk management codes of practice (BS 31100:2008 Risk management- Code of practice; BS ISO 31000:2009 Risk management- Principles and guidelines and BS EN 31010:2010 Risk management-Risk assessment techniques).In the past 6 years, our research team completed 5 funded projects* which had created extensive data set for construction safety & risk assessment for large-scaled construction projects. Based on another 1-year pilot study**for this proposal, qualitative data were gathered from case studies through interview conducted on Tram Network Project in Edinburgh (2012-13). The primary findings and analysis in this case would present valuable data for the initiating Government and local partners to have an in-depth understanding of the SE risk environment the construction megaprojects. Such understanding is vital for implementing further effective measures to ensure that the right direction of future development create a more attractive environment to all stakeholders to avoid project delay and cost overruns.To enhance the performance of the existing risk management process, it is proven that the Analytical Network Process (ANP) and the System dynamics (SD) methodological approaches are leverage in the research to support the over 30 risk management techniques in British Standards for risk management. The proposed new integrated approach of ANP and SD will at the end aid project managers to enhance proactive risks assessment decision making processes during construction of megaprojects. The new approach will cover a wide range of project management needs, by addressing the systemic issues that influence and dominate the megaproject outcome. It will ensure the proper management of risk and the highest value return from the project.Based on this new approach, we would implement and improve the risk assessment in collaboration with the corporate members (n>150) of the Hong Kong Society of Safety Auditors (HKSOSA) and (n>500) Hong Kong Institute of Construction Managers (HKICM). With attached supporting letters, some of the major industrial partners will potentially adopt and validate the integrated approach at the preliminary stage, such as Shui On Construction Co. Ltd., corporate members (n>320) of the Institute of Safety and Health Practitioners (ISHP) Hong Kong and Construction Safety & Engineering Consultants Company Limited.

Detail(s)

Project number9042033
Grant typeGRF
StatusFinished
Effective start/end date1/09/1424/08/18

    Research areas

  • Risk Assessment,System dynamics,Analytical Network Process,Mega Projects,