- 2075 Asoj · 8 marks
Impact of unmanaged risk; risks by phase
Short answer
Unmanaged risk causes cost and time overruns, poor quality, scope reduction, safety problems, disputes, financial loss, and reputational damage. Risks vary by phase: conceptual (unclear objectives), planning (design errors), procurement (wrong contractor), construction (weather, quality), commissioning (defects), and operation (maintenance, low demand).
What would be the impact on a project due to unmanaged risk in a project? Write down the risks in a project in different phases of the project life cycle.
Impact of unmanaged risk
- Cost overrun: unexpected loss is paid from the project budget.
- Time overrun: delay in completion and handover.
- Poor quality: failure to meet the standards, defects and rework.
- Scope reduction or project failure: the project may be stopped or abandoned.
- Safety problems: accidents, injury and environmental damage.
- Disputes, claims and legal cases between parties.
- Loss of reputation and confidence of client, donors and lenders.
- Financial problems: loan repayment trouble and low return.
- Stress and low morale in the team, as the project moves from one crisis to another.
Risks in different phases of the project life cycle
| Phase | Typical risks |
|---|---|
| Conceptual / initiation | Wrong need analysis, unclear objectives, unrealistic benefits, political pressure |
| Planning and design | Incomplete survey, wrong estimate, design error, funding not arranged, unrealistic schedule |
| Procurement | Wrong contractor selection, bid collusion, late approvals, price change |
| Implementation / construction | Material and labour shortage, quality failure, weather, accidents, scope change, payment delay, disputes |
| Commissioning and closing | Defects, performance not as designed, delay in handover, claims, lack of training |
| Operation | Maintenance problems, low demand, natural hazards |
✓ Answer checked by Claude Opus 5.5 (high effort)
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