--- title: "Risk sources in over-budget, delayed projects of Nepal" subject: "Project Engineering" chapter: 5 key: "semester_7/project_engineering:risk-sources-nepal-delayed-projects" source: https://www.bctengineer.com/q/semester_7/project_engineering/risk-sources-nepal-delayed-projects site: BCT Engineering --- # Risk sources in over-budget, delayed projects of Nepal Project Engineering · Chapter 5: Project Risk Analysis and Management - Asked in: 2081 Bhadra, 6 marks - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_7/project_engineering/risk-sources-nepal-delayed-projects - Whole chapter: https://www.bctengineer.com/md/semester_7/project_engineering/chapter-5 ## Question Projects in Nepal are usually completed over budget with delayed completion time. What are the major sources of risk that are associated with such projects in Nepal? ## Short answer Major risks include weak planning and design changes, delays in land acquisition, poor contractor capacity, late budget release, political instability, monsoon hazards, material and labour shortages, and weak supervision. Inadequate risk analysis before execution leads to cost and time overruns. ## Answer Many Nepali projects (roads, hydropower, buildings, irrigation) finish late and over budget. The main sources of risk are: 1. **Weak planning and design:** incomplete survey, drawings and cost estimate; lack of detailed investigation; unrealistic schedule; many design changes during construction. 2. **Land acquisition and compensation:** delay in getting the site and right of way, forest clearance, tree cutting and utility shifting. 3. **Procurement and contractor problems:** lowest-bid awards to weak contractors, abandonment of work, poor capacity, slow bidding process, contract termination. 4. **Funding and payment delays:** late release of budget, payment delay, shortage of counterpart funds, dependence on donors. 5. **Political and administrative factors:** frequent change of government and officials, delay in approvals, bandh, local interference, corruption. 6. **Natural and geographic factors:** monsoon floods, landslides, earthquakes, difficult terrain, remote access and a short working season. 7. **Shortage of material and labour:** price rise of cement, steel and fuel; transport cost; shortage of skilled labour due to migration abroad; blockades. 8. **Weak management and supervision:** poor monitoring, lack of coordination between agencies, weak project management skills. 9. **Contract and dispute issues:** variation orders, claims, arbitration, unclear contracts. 10. **Environmental and social issues:** delays in EIA and IEE, public opposition, protests by affected people. Most of these risks are not analysed or planned for in advance in Nepali projects, which explains the cost and time overruns. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. Which source causes delay in getting the site, right of way, forest clearance and utility shifting? A. Procurement problems B. Land acquisition and compensation C. Funding delays D. Environmental issues Answer: B. Land acquisition and compensation covers site, right-of-way, forest clearance, tree cutting and utility shifting delays. (Key point: Land and right of way) 2. Which is a procurement and contractor problem in Nepali projects? A. Monsoon floods B. Lowest-bid award to weak contractors leading to abandoned work C. Migration of labour D. Donor dependence Answer: B. Lowest-bid award to contractors with poor capacity often causes abandonment or termination. (Key point: Procurement risk) 3. What causes shortage of skilled labour mentioned for Nepal? A. Excess supply of engineers B. Migration abroad C. Too many projects in remote areas only D. Fixed-price contracts Answer: B. Skilled labour shortage is linked to migration abroad, along with price rise and blockade. (Key point: Labour shortage cause) 4. According to the answer, why do cost and time overruns occur so often? A. Risks are mostly not analysed or planned in advance B. Projects are always too small C. Nepal has no monsoon D. Contracts are too detailed Answer: A. Most of these risks are not analysed or planned in advance, which explains overruns. (Key point: Root cause of overrun) ## Related in Project Engineering - [Sources of financing large projects](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Asources-of-project-finance-large-projects) — Project Engineering, chapter 6 - [Risk, sources of risk, risk management steps](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-define-sources-steps) — Project Engineering, chapter 5 - [Risk, sources, risk response planning](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-define-sources-response-planning) — Project Engineering, chapter 5 - [Sources of project risk](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Asources-of-project-risk) — Project Engineering, chapter 5 - [Risk types and sources; rectify via risk management](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-define-types-sources-steps-c75) — Project Engineering, chapter 5 - [Risk in construction projects and its management](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Arisk-define-more-chance-construction) — Project Engineering, chapter 5 ## Related in other subjects - [Sources of risk; best building height](https://www.bctengineer.com/question.md?key=semester_6%2Fengineering_economics%3Arisk-sources-nepal-building-floors) — Engineering Economics, chapter 6 - [PERT expected time and completion probability](https://www.bctengineer.com/question.md?key=semester_6%2Findustrial_engineering_and_management%3Apert-probability-of-completion) — Industrial Engineering and Management, chapter 3 - [Major sources and selection factors](https://www.bctengineer.com/question.md?key=semester_5%2Fwater_supply_engineering%3Asources-and-selection-factors) — Water Supply Engineering, chapter 2, asked 2× - [Major electricity sources and sustainability](https://www.bctengineer.com/question.md?key=semester_4%2Fpower_system_analysis_i%3Aelectricity-sources-sustainability) — Power System Analysis I, chapter 1