Managing risks in foreign funded projects in Sri Lanka : a case study of water supply and waste water projects

Abstract

Managing risks in foreign funded projects in Sri Lanka: a case study of water supply and waste water projects Increase in population and economic development in recent past results increasing in demand for treated water for the domestic and industrial sectors. This applies immense pressure on government to implement projects to meet these increasing demands efficiently and effectively. As a result, many foreign funded water projects have been commenced in recent past. Although the government has accepted the need for more investments to increase the water supply coverage and enhance the quality of the service, the successful implementation of the water supply projects has always been a challenge and many issues related to projects affecting the foreign funded projects in Sri Lanka. The purpose of studying the risk factors affecting the foreign funded projects is to make recommendations to improve the degree of the success of implementation of water supply projects in the future. A comprehensive literature was conducted to acquire knowledge to analyze risk related to foreign funded projects. Further questionnaire survey, expert interviews were conducted with project directors of foreign funded projects in National Water Supply and Drainage Board. Base on the study findings in total, 26 critical 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 thirteen factors are located in the green zone, eight factors are located in the yellow zone, one factor is located in the orange zone and seven 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 control measures were identified through in-depth interviews which were conducted with five experts, including 3 project directors of NWSDB and 2 project managers. Based on the findings, a risk management framework was developed which will be benefit the risk management of foreign funded water projects.