Project –Appraisal Vis-À-Vis Risks and Uncertainty Management in Construction Industry: A Plausible Strategic Maneuver

Abstract

Genesis of risk and uncertainty is an innate facet in any project. A cause, occurrence and consequence are the signature- hallmarks of every risk. Dodging and dealing with plausible critical situations in complex projects demand strategic quantification and management of uncertainties of different nature much in advance. In this milieu, we propose a methodology to classify uncertainties based on the dictates of probability theory, possibility theory, belief/plausibility theory and fuzzy set theory. A general framework of risk and uncertainty management is forwarded. Our recommendation embraces: (1) identification, assessment, analysis and distribution of all possible risk and uncertainty amongst the parties involved or those who might get associated in accordance to their capacity, competency and characteristics; (2) allocation and distribution (governed by the terms and conditions of the contracts) of the various risks and uncertainties to those, capable of handling them better and (3) monitoring, scrutiny, response and mitigation by those assigned according to the contractual-conditions. It is expected that the proposed model shall serve as a ready-to-use template for project valuation to effectively address plausible risks and uncertainties in construction-industries, eventually contributing to the cause of sustainable development.