The construction industry in India is an ever-growing business, expected to grow by 10% over the next five years. With over 50 million workers, it is the country’s second-largest source of employment. Besides creating 45 million jobs—directly and indirectly—each year, the sector contributes 9% of or to the country’s Gross Domestic Product.
Both the government and private sector are increasing their scope of infrastructure projects, driven by a rise in demand for housing, highways, data centers, and sources of energy, among other things. In fact, India is expected to become the world’s third-largest construction market by the end of 2022.
However, construction is one of the most hazardous sectors in India. An average of about 38 fatal accidents occur each day, due to the lack of proper safety standards. Additionally, a gamut of other unwelcomed aspects such as design errors, cost overruns, and unidentified legal constraints have delayed many construction projects in the country. Just in seven of the country’s micro-markets, almost half a million worth INR 4.48 lakh trillion have been at a standstill owing to such reasons.
These can be greatly averted by standardizing construction risk management in all projects; and there are some companies that are taking a lead in bringing in new innovations in safety and sustainability. The future of the construction sector will be one that emphasises research and innovation for the betterment of civilisation.
Ideating the risk management plan
Construction risk management helps in evaluating and implementing effective procedures to reduce the impact of risks in construction projects. The technique helps various stakeholders of each project analyse and mitigate risks, to enable a smooth and safe flow of the process.
It is important to first identify the potential risks associated with construction, before devising an effective risk management strategy. Here are some common strategies.
Project risks: Due to inadequate construction project management, project risks might result in financial and legal difficulties, as well as disproportionate availability of workforce. Poor scheduling, planning, or inefficient resource allocation are just a few examples of how uneven project management can lead to risks that increase delays and increase costs for businesses. Incomplete or erroneous architectural designs, inadequate site investigations, unavailability of materials, and changes in project scope or requirements also fall under project risk.
Safety Risks: Construction crews often use heavy-duty, industry-grade equipment throughout the duration of the project. With poor foundations, inadequate asbestos filters, and poor quality protective equipment, they are prone to workplace accidents more than anyone else. Safety risks are concerns that shouldn’t be taken for granted and can be avoided by proactive measures like quality checks of equipment, and inspecting raw materials, among other things.
Environmental risks: Natural disasters like floods, fires and earthquakes are unpredictable that often leave devastating outcomes. The most important way to deal with environmental risk is by creating a well-thought-out disaster management plan.
Developing a construction risk management plan involves identifying and monitoring the risk factors and thereby mitigating these as they arise in a project. Architects, project managers and other decision-makers aligned with construction projects should be cognizant of the risks involved, and the correct procedures to keep them at bay.
Therefore, identifying and prioritising risks is crucial, especially during the pre-construction phase of the project. After identifying the risks, it is important to sort and appropriately prioritise them in the right order so that major problems can be dealt with immediately. For instance, let us say a construction project faces two different risks—an identified design flaw and a legal constraint. Here, the company should calculate and determine which of the two has to be addressed first, depending on how high its potential is to disrupt the project. Then the relevant party should correctly prioritise working on the risk and allocate time, money, materials and other important resources efficiently.
Another important step is developing response strategies. This includes incorporating methods such as risk avoidance and risk transfer. Risk avoidance includes devising proactive strategies such as investing in ready-made concrete to fill potholes and other structural gaps, in the event of a natural disaster. On the other hand, transferring risks is the process of companies sharing the liability of their risks with other organisations.
Finally, those who are planning construction projects should make use of technology. Modern systems such as Enterprise Resource Planning (ERP), Building Information Modeling (BIM), and Data Processing tools help in streamlining the process of developing a construction risk management plan.
Unfortunately, there is no way to entirely avoid risks since unknown factors are always at play. However, by recognising and classifying risks before the initiation of a project, risk management can be effectively implemented to avoid potential losses.
Additionally, as a precursor to developing construction risk management plans, companies and the government should work hand-in-hand to upskill construction workers so that their span of work can be broadened to different tasks. With more skills, workers can solve more problems.
Views expressed above are the author’s own.
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