Implementation Level of Effective Risk Management Systems by Indian Infra Structure Projects - An Assessment

Abstract

Study reports from various sources indicate that India is likely to see increased failures of infrastructure projects in the coming days. These reports are based on the historical trends of increasing cost overruns and schedule delays. The inability of project organisations to cope up with the uncertainties and risks that haunt the projects stand out as the most major reason for such failures. Even though the concept of risk management has made strong inroads into the project arena in many countries, to manage and mitigate project risks. India is seemingly lagging in integrating risk management into project management.

This paper was an attempt at mapping the level of implementation of any structured risk management in the infrastructure Project segment of India in order to identify the gaps that need to be filled for attaining a satisfactory level of effectiveness in combating project risks. The suggestion of corrective solutions based on the shortcomings thus unearthed was also another objective of the study. The study was made by means of a questionnaire survey across a cross-section sampled out of the Indian infra project spectrum. The survey was conducted only after a thorough literature survey was done to gather the know-how about implanting any effective risk management system to identify the deviations of the risk management practice at project sites from the ideal one. Instrumentation was done with the knowledge thus gathered from the published works, appropriate to point out the vital deviations from index aspects corresponding to maximum effectiveness.

The findings obtained after the analysis of survey results indicated that the project organisation that reported the best in risk management implementation itself had only effectiveness of 76%. 30% of the projects reported a poor level of implementation and exposed the lack of interest in risk management of the top management in low and medium-scale project organisations. Sector-wise analyses brought out the fact that the presence of a nationwide uniformity in governing guidelines could produce a good impact on risk performance. The study concluded that centrally administered policy guidelines aimed at maximising risk management effectiveness were necessary to bring forth breakthrough progress in the level of implementation of risk management throughout the infra sector.