Project management: risk investigation in railway projects

Abstract

Globally, sound infrastructure is considered as a stepping stone for development and global competitiveness. Planning commission of India has also recognized that to sustain GDP growth of 9% per annum, about US $514 billion investment is required in various infrastructure projects in 11th five year plan (2007-2012). The demand for transportation in India has been rising- reflecting growth of economy- and it is expected to continue its upward trend with projected growth of Indian economy. Railway plays an important role in nation s economy as a mainstay of transportation. Throw forward of various railway projects at the end of tenth five year plan is 8300 Km,6700 Km and 2800 Km for new lines, gauge conversion and doubling projects respectively. Yearly rate of accomplishment is only 250 Km, 1300Km and 350 Km respectively. There is an urgent need to execute pending and upcoming projects on priority. Risk management is fundamental for the success of a major project. The role of risk management is to identify and evaluate the risks faced by professionals and to monitor and manage these risks. Impact of improper risk management extends beyond straightforward financial damage to operational disturbance, loss of service or amenity, user dissatisfaction and disruption of strategic planning process. Too often, risks are underestimated and allocated to parties without the knowledge, resources and capabilities to manage them effectively. Failure to manage risk may lead to serious consequences- poor quality, prolonged delay, budget overrun, environmental problem and prolonged contractual dispute. The aim of this dissertation is to provide an overview of a project risk management process adopted in construction industry. This is my humble attempt to understand the various key risks and their mitigation measures in construction projects of Indian Railways. This dissertation provides the results of data regarding various risk factors and their mitigation measures collected from the executives involved in railway projects. Conventionally, risk management process in construction projects in Indian Railways is subjective and unstructured. Factor analysis of survey results suggest that the risk factors vary with the type of project. These results can be utilized for adopting appropriate mitigation techniques depending on importance and risk appetite of the management. I feel this research would help reader to handle a project in better perspective.