Improper Risk Management Outcomes and Lessons Learned from an EPC Water Transmission Project

• Published in: Journal of construction engineering and management 2024-11, Vol.150 (11)
• Main Authors: Abaza, Mohamed, Kisi, Krishna
• Format: Article
• Language: English
• Subjects: Case Studies; Case Study; Content analysis; Cost analysis; Decisions; Hot roughing mills; Impact analysis; Procurement management; Project management; Risk management; Stakeholders
• ISSN: 0733-9364; 1943-7862
• DOI: 10.1061/JCEMD4.COENG-14638

AbstractThe lack of a proper risk management procedure for water transmission projects is a significant problem that could lead to claims and disputes. This study explores risk management practices in an engineering, procurement, and construction (EPC) water transmission project in Bahrain. It addresses key research questions on inadequate preconstruction risk management, its impact on project execution and stakeholder satisfaction, and the potential benefits of integrated risk management and project scope strategies. Using a case study approach, the research employs content analysis of 15 claims within the case study and thematic coding to identify risks across project phases. The study reveals challenges like scope gaps, technical deficiencies, and communication breakdowns resulting in legal disputes and a cost overrun of USD 3.6 million on the original EPC contract of USD 57.27 million. The dispute was ultimately resolved through intensive negotiations, with the contractor receiving USD 2.4 million; by analyzing contract agreements, meeting decisions, site reports, contractual letters. This case study emphasizes the need for proactive risk management during procurement and vigilant monitoring during execution, offering insights for effective project delivery. Lessons from the study emphasize the importance of stakeholder identification, change management procedures, and specialized works management for successful project execution. The research contributes practical recommendations, highlighting the critical role of comprehensive risk mitigation in EPC projects and empowering stakeholders to make informed decisions for successful outcomes. The findings can also assist vendors in understanding potential risks, being aware of the consequences of improper risk management implementation and making informed decisions before signing a contract. Through its methodology, case study insights, and practical recommendations, this study significantly contributes to the body of knowledge, providing valuable lessons and strategies applicable to a broader spectrum of similar projects.