Risk Management Framework For Foreign Funded Water Projects Client’s Perspective

Abstract

Foreign funded projects operate under a special mechanism with the complex web of the different stakeholders. It faces different types of risk related to time and cost. Thus, it is important to control and manage the risk associated with foreign funded projects to ensure the achievement of project objectives on time. Therefore, this study focuses on risk analysis of water projects which a type of foreign funded projects in Sri Lanka. Accordingly, the aim of this study was to develop risk management framework for foreign funded water projects from client’s perspective. In total, 49 risk factors were identified through a detailed literature review. The factors were tabulated in a questionnaire form and sent out to gather owner’s perception on the rating of each risk factors regarding probability of occurrence and impact on foreign funded projects. A risk matrix having four risk levels as “low risk – (green)”, “moderate risk – (yellow)”, “high risk – (orange)” and “extreme high risk- (red)” is developed to evaluate significant risk factors. The analysis indicates that one factor is located in the green zone, twelve factors are located in the yellow zone, twenty two factors are located in the orange zone and thirteen factors are located in the red zone of the risk matrix. The predominant risk factors that are located in the red zone are considered for developing risk management framework. Risk response measures were identified through a literature review and respondent were asked to rank according to its effectiveness. Further effective risk response measures have also been proposed by the respondents for each of the identified risk factor. Based on the findings, a risk management framework was developed which will be benefit the risk management of foreign funded water projects.