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Construction Risk: Wikis


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Construction Risk The construction phase risk, along with being highly risky requires large volumes of finance.

A mixture of equity, subordinated debt, senior debt & guarantees are used. The main risk is the completion risk; the project may not be completed on time or at all, due to various reasons such as cost overruns, technology failure, force majeure etc.

Nature of Risk - Ability to commence the project within the budgeted time - Ability to complete project within the budgeted costs - Ability to deliver the requisite quality

Key Issues - Land acquisition - Availability & Prices – materials, equipment & services, labour

    Fixed price/ time contracts
    Commodity exchanges


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