Identification and meeting of risks in construction contract

Abstract

Construction has existed since time beyond trace. As one of man's basic needs, protection from inclement weather and enemies necessitated the construction of shelter. Construction materials and skills developed very slowly and some of the earlier methods of construction using interwoven tree branches, stems, reeds, rushes and mud have survived for over 6000 years. The history of Sri Lankan construction goes back to several thousand years. Anuradhapura, Polonnaruwa, Sigiriya and Kandy are significant as some of the greatest cities of ancient time and repositories of some of Sri Lanka's greatest engineering works, unrivalled even today for their magnificence. Ancient temples, Sigiriya, Yoda Ela and irrigation tanks in these areas are some examples. After independence, local construction firms were started in Sri Lanka, but most of the construction had been done by the Government Institutions such as Public Works Department, Irrigation Department etc. After the introduction of the open economy to the country, private construction firms got more opportunities to enter the construction industry. Construction risk is one of the great challenges for them. In the construction industry it is recognized that all categories of hazards exist producing the possibility of loss of life, personal injury, material damage, financial loss or loss of time. Terrible combinations of these five effects may result in the more hazardous construction areas. At one end of the scale hazards may result in a large number of deaths and huge financial losses. At the other end of the scale negligible hazards can produce minor cracking of a cosmetic nature, which can be disregarded. Chapter 1: Introduction Risks are born as soon as a decision is taken to proceed with a project. They multiply and increase as the project advances from the feasibility stage to the design and, later construction stages. Risks in construction occur as a result of the existence of dormant sets of conditions (hazards) which possess the potential for initiating adverse events (accidents). They are usually in a dormant state but all that is required is an activating agent to trigger the change from a dormant to an active state. To name and identify the hazards and risks in a project is therefore the first step in the process of managing it to success.