Early cost estimating has often become a major challenge in large projects. Budget overruns occur time and again, which leads regularly to conflicts between investors, project teams, contractors, and other stakeholders. The cause for these are several factors such as inadequate consideration of project risks, insufficient project information and an unclear project scope, or unforeseen project complexities. The following literature review, therefore, observes the risk identification of major construction and infrastructure projects as one of the major reasons for cost overruns. This review aims to deliver an overview of the different approaches to the identification of risks during the early stage of large projects. In this context, however, no rigid definition of the term "major project" has yet emerged. There is no fixed rule when a project is a major project and should be organized likewise. A major project is characterized by the fact that it differs from the client's usual projects in terms of its planning and implementation duration, its complexity, the large number of participants, or its high social significance. In contrast to small and medium-sized construction projects, where routine can be applied, extensive infrastructure and construction projects are often a multitude of different tasks with several interconnections and interfaces. They often require more complicated organizational structures, and accordingly many risk management requirements. Whether a project is considered a major project depends on the specific individual case. In these projects, decision-makers often rely on intuition, judgment, and their personal experiences to conduct risk assessments and cost estimates. Although various risk assessment models have been developed in recent years, the lack of precise and general data to examine risk effects usually leads to inconsistencies and inaccuracies in risk assessment. This often results in significant budget overruns for large construction and infrastructure projects.
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION
- COST ESTIMATION AND RISK ASSESSMENT
- RISK IDENTIFICATION
- RISK ANALYSIS
- CONCLUSION
- REFERENCES
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This research paper examines the critical risks in large construction projects and their consideration in cost estimation. It aims to provide an overview of the different approaches to risk identification during the early stage of large projects and to highlight the importance of incorporating risk assessment into cost estimates.
- The impact of project risks on cost overruns
- Different approaches to risk identification in large projects
- The role of risk assessment in accurate cost estimation
- Methods for identifying and managing risks in construction projects
- The importance of considering risk costs in project forecasting
Zusammenfassung der Kapitel (Chapter Summaries)
- INTRODUCTION: This chapter introduces the challenge of early cost estimation in large projects and highlights the significant role of risk identification in preventing budget overruns. It explores the concept of "major projects" and their unique complexities, emphasizing the importance of incorporating risk assessment in their planning and execution. The chapter concludes with a brief overview of the research paper's methodology and objectives.
- COST ESTIMATION AND RISK ASSESSMENT: This chapter examines the relationship between cost estimation and risk assessment in construction projects. It explores the causes of cost overruns, including inadequate consideration of project risks, insufficient project information, and unclear project scopes. The chapter emphasizes the need for accurate cost estimates, particularly in the early stages of planning, to facilitate informed decision-making and mitigate potential risks.
- RISK IDENTIFICATION: This chapter delves into the process of risk identification in construction projects. It highlights the importance of considering both identified and unknown risks, and explains the different categories of risks that should be considered. The chapter also outlines various methods for identifying risks, such as brainstorming, Delphi technique, checklists, and lessons learned.
Schlüsselwörter (Keywords)
This research focuses on critical risks, cost estimation, large construction projects, risk identification, risk assessment, risk management, and project forecasting. It explores various techniques for identifying and managing risks, highlighting the importance of integrating risk considerations into cost estimates for informed decision-making and improved project outcomes.
- Quote paper
- Martin Henschelchen (Author), 2022, Critical risks in large construction projects and their consideration in cost estimation, Munich, GRIN Verlag, https://www.grin.com/document/1217284
