Construction projects are one-off endeavors with many unique challenges such as long period, complicated processes abnormal environment, financial intensity and dynamic organization structures and comes with enormous risks. One of the major challenges is to manage the initial cost estimate and the risk associated with it. However construction cost estimate is carried out under conditions of uncertainty. The preparation and accuracy of any type of cost estimate will depend heavily on the amount of information available and tools used during different project phases. While risks cannot be eliminated completely, where there is a cost but successful projects are those where risks are effectively managed of which early and effective identification and assessment of the relationships between cost and risks is essential. A good cost estimate: is built on understanding of the cost driven relationships and risk is one of these cost driven relationship associated with cost. Therefore risk is a cost that cannot be exactly measured with mathematical accuracy, then Cost and risk share a relationship which is verb and more so approximation relationship .With the exception to when a risk occurs and is translated into cost. In particular the risk analysis is used to examine the expected cost of the project and to assess whether the contingency allowance is fit for the project. The relationship between cost and risks is discussed in same details.
Risk Analysis, Estimation, Construction, Uncertainty
- D. Baccarini; R. Archer, The risk ranking of projects: a methodology, International Journal of Project Management, 19 3 (2001) 139-145
- Theoretical framework of the causes of construction time and cost overruns K Ullah et al 2017 IOP ConfSer.: Mater. Sci. Eng. 271 012032
- Rum N A and Akasah Z A 2011 Implementing life cycle costing in Malaysia construction industry : A review Proc of International Building & Infrastructure Technology Conference (Penang, Malaysia) vol 7 (Penang: Universiti Sains Malaysia) 1 272–280
- Shrestha P P, Burns L A and Shields D R 2013 Magnitude of construction cost and schedule overruns in public work projects, J. Constr. Eng. 20 1-9
- Kostka G and Anzinger N 2016 Large Infrastructure Projects in Germany: Between Ambition and Realities (Berlin: Palgrave Macmillan Publishers Limited)
- Challenges in Cost Estimation under Uncertainty—ACase Study of the Decommissioning of Barse bäck Nuclear Power Plant Falih M. Alsaaty 13 October 2016; Published: 20 October 2016
- Adoko, M.T.; Mazzuchi, T.A Sarkani, S. Developing a Cost Overrun Predictive Model for Complex Systems Development Projects. Proj. Manag. J. 2016, 46, 111–125. [CrossRef]
- Welde, M. Oppdaterte Sluttkostnader—Prosjekter Som Har Vært Underlagt KS2 per September 2015 (Updated Final Costs for Projects under Quality Assurance 2 per September 2015); Concept Working Report; 2015. (In Norwegian).Available online:
- http://www.ntnu.no/concept/arbeidsrapporter (accessed on 21 July 2016)
Cite this Article:
International Journal of Sciences is Open Access Journal.
This article is licensed under a Creative Commons Attribution 4.0 International (CC BY 4.0) License.
Author(s) retain the copyrights of this article, though, publication rights are with Alkhaer Publications.