A framework for risk analysis in infrastructure projects
A framework for risk analysis in infrastructure projects

Summary/Abstract: Due to various uncertainties all capital intensive projects often suffer from risk. Both international as well as Polish infrastructure projects are subject to often excessive risk. One of the main reasons for poor risk estimates in those projects is lack of coherent risk assessment framework. Process of risk assessment could be optimized and could produce much better results if appropriate risk analysis framework is proposed. The aim of this paper is to present the proposal for such risk analysis framework which allows for optimization of risk appraisal in infrastructure investments. Proposal presented in this research is based on analysis of examples of real investment conducted in the European Union. This is further augmented by the results of questionnaire review of construction companies in which they were asked to identify significant (from the contractor perspective) types of risk. The resulting framework proposes layered approach to risk analysis distinguishes between three levels of risk assessment. On the top-level major risks facing project participants are addressed like cost, revenue, delay and quality risks. On the mid-level the component risks which influence major risks are addressed. Finally on the basis level the actual risks which represent common risk events present in infrastructure investments are enumerated. Furthermore the interconnections between identified types of risks are described and their contribution to overall risk is discussed. This three stage approach allows for elastic and at the same time complete tool for risk analysis which helps to optimize risk assessment process.

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