PUBLICATIONS
formally presented works. It is also
true that, in reality, projects are not
neatly compartmentalized. Estimat-
ing, planning and managing are iter-
ative processes, with the same issues
needing to be addressed at different
times during a project's life. Never-
theless, I would have preferred a
more structured approach, together
with diagrams, tables and lists to
illustrate, clarify and summarize the
text. There are too many reproduct-
ions of printouts from commercially
available software that are too
small, and do not relate fully to the
text.
The book varies from a basic
'how-to' guide to a more philosoph-
ical analysis of many facets of pro-
ject management. This is both its
strength and its weakness. It covers
a lot of ground, but only super-
ficially in some areas. For example,
the book is written primarily from
the viewpoint of contractors prepar-
ing tenders, planning, and then man-
aging their work to meet their
tendered prices and schedules. The
Engineering Construction Risks, A Guide
to Project Risk Analysis and Risk
Management
P Thompson and J Perry (Eds.)
Thomas Telford, UK (1992) 17, 56 pp, ISBN 0 7277 1665
This booklet is a report on the find-
ings of two research studies on how
risk analysis and risk management
may be used to improve the financial
success of engineering construction
projects. The research work was sup-
ported by the U K Science and Eng-
ineering Research Council. The
results of the first study were pub-
lished in 1986 as Risk Management
in Engineering Construction. This
publication contains the findings
arising from the second study, which
was undertaken in 1990/91 as a
follow-up to the previous work.
Vol 11 No 3 August 1993
owner's view is rarely mentioned. At
one point, however, Ward concludes
that, since the owner does not have
to worry about failing to win the
work, and does not have to worry if
his/her estimate exceeds the
contractor's price, ' . . . t h e owner's
anxieties should be far less than the
contractor's'. How often do the ten-
ders exceed the owner's estimate,
even before variations are added and
claims are settled? W h a t of the
owner's anxieties then?
The book would benefit signifi-
cantly from sympathetic editing,
greater use of diagrams to illustrate
the text, the breaking up of the
text into smaller sections by the
use of headings and subheadings,
lists, tables, bullet points and sum-
maries, and a more comprehensive
index.
The book is not the definitive
work on this subject, and, at 45.50,
it is not cheap either, but it is worth
perusal by anyone interested in man-
aging projects, although some lateral
thinking will be required by those
ary by such quantitative techniques
It spells out the importance of
tackling project risks, and shows
how this can be done. It also pro-
vides an introduction to the litera-
ture of the subject. The aim of the
publication is to increase awareness
of this vital issue among the industry
and its clients, in both the public and
private sectors.
A principal conclusion of the re-
port is that, all too often, risk is
either ignored or dealt with in an
arbitrary way through the use of
overall percentage contingency
allowances. The report provides a
without knowledge of the construct-
ion industry. Students should find it
useful as an overview, and owners
could find a useful insight into the
problems that contractors face every
day.
Despite its faults, I enjoyed
this book; it contains a lot of wisdom
and distilled experience. On the last
page, Ward says the following:
The fundamental theme of planning is
reductionof risks. It is virtuallyimpossible
to prognosticatewhenand if specificprob-
lems will crop up during the execution of
a project but the wisdom acquired from
the experience of completed projects
should be utilised to effectuateintelligent
decisions.
This should be written on the
first page of the book, not the
last.
P E Jobling
W S Atkins Project Management
Epsom, Surrey
UK
systematic means of progressively
assessing and refining risk estimates
throughout a project, from the early
stages, when the work is ill defined
and uncertainty is greatest, to the
later stages, when any remaining
risks can be closely identified and
tackled. The report explains how the
initial listing and qualitative analysis
of risks can be developed as necess-
as sensitivity and probability analy-
sis using specially prepared com-
puter programs. The value obtained
from risk-analysis modelling de-
pends, of course, on the realism of
the assumptions underlying it, the
skill of the model builder, and the
accuracy of the data used.
When an appropriate degree of
analysis has been conducted,
risk management operates to
provide responses and policies to
reduce and control as far as pos-
sible the main risks identified in the
analysis. Contract strategy is briefly
covered, followed by a look at the
risk implications of different pro-
curement systems and methods of
187
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payment. It is in these areas that
more research could usefully be un-
dertaken to assist all the parties in-
volved in construction projects to
give a greater and more productive
input, and thereby alleviate the
problems of lack of performance
and dispute escalation.
The report introduces the concept
that the client should consider set-
ting a 'minimum acceptable risk'
contract price, below which a bidder
will not be awarded a contract.
This idea may not gain favour in
a free-market competitive economy
188
in which contractors thrive on
their expertise and value their
reputations. Careful vetting of ten-
derers and an open, collaborative
attitude to the distribution of risk
among contracting parties may cre-
ate better conditions for successful
projects.
This booklet puts forward many
well researched ideas, and offers a
valuable contribution to the under-
standing of project risk for clients,
consultants and contractors. The
construction industry will benefit
from the greater awareness of the
International Journal of Project Management
effect and handling of risk that the
booklet provides.
B CurtL,
Note
In the Publications section of the
May 1993 issue of the Internationa~
Journal of Project Management, the
book 'Managing People (Including
Yourself) for Project Success', by
G Culp and A Smith, is published by
Van Nostrand Reinhold of New
York (imprint Chapman and Hall)
and not as stated. We apologize to
all concerned for this error.