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  • Writer's pictureAdele Leah

Managing Risk

Good risk management processes, applied throughout the lifecycle of a construction project, are critical for successful project delivery.

At the establishment of a project, the initiator of the project owns and manages all of the risk. As the project moves through the various stages, there is usually a transfer of risk to others, such as an Architect, Project Manager, Quantity Surveyor and Contractor, who are better equipped to manage it. It is important for a client to appoint suitably experienced and qualified consultants and contractors who hold appropriate levels of professional indemnity (PI) and public liability (PL) insurance. Competent consultants will protect a client from unnecessary risk through giving good advice, producing sound designs and appropriately detailed documentation.

For large and complex projects, a client should seek assistance from industry specialists in the selection of the project delivery strategy as this strategy will influence the allocation of risk. An experienced consultant should be able to help a client to consider their priorities, formulate project aims and objectives, think about timeframes, and determine the most appropriate delivery strategy for the project.

Engaging with consultants and contractors early in a project can be useful, particularly when the project is large-scale or complex. Delivery models that enable collaboration between the design team and the contractor, for example Early Contractor Involvement (ECI), may be more appropriate when project risks are significant. For large-scale and complex projects, the lead consultant or project manager may (in consultation with the project team) produce a risk management plan and monitor its implementation. For all projects, there are client and project specific approaches to managing risk which should be explored and implemented.

The cost of construction continues to rise in Aotearoa, New Zealand, and the early engagement of a Quantity Surveyor (QS) to provide cost advice is essential. Accurate estimates of construction cost are necessary to understand the viability of the project, and may also influence the direction that the project takes. Good collaboration between the various design consultants is essential in fully understanding the implications of design decisions, construction techniques and material selection.

If you are the initiator of a construction project, we recommend that you seek good advice, appoint competent consultants, and educate yourself well. Avoiding or removing risk is better than having to manage it!


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