Standard Operating Procedure for Risk Review & Management

Guidelines for Risk Review & Management

1. Scope of Guidelines
The purpose of this document is to create a system for Risk Management Process that will guide stakeholders to review & report risk emerging
during project construction cycle and safeguard project objective as defined by NMSCEL. The operating procedures mentioned herein shall only
be considered as prescriptive guidelines for a systematic and consistent approach towards risk management and reporting. The overall involvement
of stakeholders shall be bound by the contractual obligations prescribed in the agreement signed between the stakeholder and NMSCEL.

2. References
This Document has drawn reference from following:

1) Good Industry Practice

2) ISO 9001: Quality Management Systems – Requirements

3. Identification of steps
3.1 Authority Review & Approval Process for Risk Management
a) The Contractor shall prepare and submit
copy of risk register along with necessary
particulars, shall be submitted to the
Authority representative (AE) at least 10
working days prior to end of Month.
b) AE shall review the risk register based on
i. Follow-up on previous Risk event
ii. Occurrence of any new risk event
c) AE shall Proceed with review as per
section 4.2 of Guidelines. Post the review,
if there is need for a stakeholder meeting
on any of risk event identified critical, the
same shall be to Authority to about the
objective.
d) If need of meeting is justified, the
Authority to set up meeting with
stakeholder for update and action plan to
mitigate risk. Proceedings of the meeting
shall be recorded and risk register to be
updated with relevant information.
e) The risk register shall be submitted by
Authority as part of Monthly report to
authority and copy of same to contractor
to be provided for further updating.
f) Quarterly Project Risk review meeting
shall be undertaken by Authority for
review and to take stock on mitigation
plan.
g) After the contracted works are
completed, the risk register shall be
updated and incorporated as part of
lesson learned.

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Standard Operating Procedure for Risk Review & Management

4. Formats and Checklists

4.1 Risk Register Log ( to be maintained by AE)

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Standard Operating Procedure for Risk Review & Management

4.2 Typical List of Risk on a Project

Description Guidelines
Country Risk
Political Stability Review risk identified during tender stage as well as identify new risk
Economic Stability Review risk identified during tender stage as well as identify new risk
Immigration and Labour Laws Any effect on cost as identified during tender stage
Currency Exchange rate and Banking Any effect on cost as identified during tender stage
Authority Risk Hands on experience with Authority to be factored
Project Risk Current experience on methodology / environment etc. need to be highlighted
JV Risk Ongoing experience with J.V. Partner need to be highlighted during this stage
Contract Conditions How actual execution is affected and cost implication if any.
Financial Work
Payment Timely payment / Delayed payment to be identified / highlighted
Retention Money Periodic status to be reviewed
Taxes & Duties Review actual status
Material Risk
Discuss the risk associated with stringent specifications and monopolistic situation
Specifications due to specifications
Availability Comment / View on the non-availability, unfavourable market conditions and
(Cement Sand, Steel, aggregates, structural steel and dependence upon single/preferred supplier and your perception to get materials
quarry) at assumed cost
Comment on the market mafia and dependency on single supplier or single quarry
Monopoly and your experience in dealing with the same.
Labour Risk
Availability of Labour View on the availability of skilled / unskilled labour in the region.
Labour subcontractor availability and reliability
Availability of visas and work permits for the labours
Influence Local obstructions, high dependence upon the local labour contractors
Civil unrest and Industrial strikes
Comment on insurance, rest periods, over time regulations number of hours
Labour Laws working etc.
Equipment Risk

View on the availability of equipment with Contractor or external sources. Lead

Availability of Equipment time for the procurement for the equipments. Unfavorable market conditions
Comment / View the cost and availability associated with use of such equipments.
Specialized / Monopolized Equipment Availability of spare parts of such equipment
Time Risk
Tender calculation time Comment on the adequacy for construction time
Mobilization time Comment on the adequacy of time for mobilization of equipment
View on the possibility of schedule crashing by extra equipments and extra
Possibility of schedule crashing resources
View the indirect cost associated with the work and possibility of time over run
Sensitivity to time related cost due to various reasons. Discuss all possible reasons for time overrun and its effect
Operation
Spell out all the possible risk arising out of physical, geological, marine
Unknown Site Condition environmental condition and effect of the same in the project cost minus of and
i.e. topographic and geological conditions possibility of plus or both the cost and time.
Construction Method 1. Unknown Method
2. If Contractor lacks experience in the method of construction proposed state the
same with the possible risk associated with the known and unknowns
3. Discuss methods for optimization and avoiding risks
Design Risk
Depending upon the time / unknown work design from the design department
Contractor design allocate plus or minus in cost
Depending upon the confidence from the last work of design by the Consultant
Consultant Design add percentage to the direct cost
Special Equipment Risk
A project which completely depends upon special equipment e.g. Jack up
platform, floating barges and dredgers check the effect on the start date due to
Availability supplying and vendering
Possibility of Floods, Cyclones Bad weathers and other Comment on the risk associated with time and cost in case of flood, cyclones,
delays weather etc.

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