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Write a report on A Study of Risk Management Practice of Highway Projects in Oman.

Global Trends in Road Network Expansion

The increasing failure in many construction projects across the globe has enhanced the need of risk management, which are causing the projects to be delayed. Globalization has attracted many foreign investors in the different parts of world. This has enhanced the pressure of managing the requirements within the deadline and with the utter quality. However, the situation has become worse because of several reasons such as the financial capabilities of the contractors, the capability level of the management team and the timing of additional works. These are not just the issues; it rather has more than these factors such as labour conflicts and use of technology. Risk management has perhaps become a challenge to the global world across the international platform (Drennan, McConnell and Stark 2014). Oman is not any different country in this regard. The country has now become an open economy, which means that it would get various foreign projects (). The gas and tourism sector of the country has opened up doors to the international clients. It has now become a free trade location, which means that the location would now need various development projects such as the development of the oil & gas industries, infrastructure, highways infrastructure, residential and tourism infrastructure (Al-Shanfari 2012). A highway infrastructure development for an example in this regard would need to be taken care with utmost responsibilities and resources. The main purpose of this assignment is to analyze the risk management strategies of the global world in terms of highways development. Moreover, this study would in particular study the risk management of Oman for the development of highways in the country.

After 2000, the global road network expansion has been for approximately around 12 million lane-km. china and India shares the maximum numbers of development during that period. They commonly shares approximately around 50% of the entire global expansion of highways. Approximately around three quarters of of the mentioned growth has had happened in countries other than the OECD. This means that the non-OECD countries have witnessed the maximum growth during such period. During the same period, some OECD countries such as Italy, New Zealand and Australia have suffered a slight loss in their road network expansion (O’Neill et al. 2015). As mentioned earlier that both China and India shares the highest extension of road network during the mentioned period. China in particular actually had the maximum development of road infrastructure, which in fact tripled the development of road infrastructure in India. China has nearly the same land area than that of the United States of America. China has so far less numbers of road networks in the country; however, it is expected to surpass the expansion of road network in the United States of America by 2025. India on the other hand is nearly one third of the entire area of the United States of America. It is behind the China and the United States of America in terms of expansion of road networks. In terms of population density, India is much higher to both the United States of America and China. However, the occupancy of vehicle in India is much lower than other countries. This is because of such reason India can afford to have the existing rate of road network expansion. The projection of increasing numbers of vehicle is a lesser worrying facts to India. On the other hand, China needs quick and high development of road network in the coming future to accommodate the rising numbers of vehicle (Laurance and Balmford 2013).

Road Infrastructure Development in Oman

The government of Oman has serious concern for the development of road infrastructure in the country. This is for such facts that the road transport in the country has witnessed a high development in recent years. The ministry of the Oman Sultanate has decided that the development of the road infrastructure would be in accordance of structured designs. The ministry of the Sultanate is also concerned for the secondary and the local road network. The ministry of the Sultanate has also confirmed that they have finalised a development of road infrastructure. They have designed the plan for the development of road network to meet with the increasing demands of infrastructure related development in the country. The ministry has realized the requirement of the development of the infrastructure, which also includes the development of the road infrastructure. They have designed a structured plan for 2030 (Strolla and Peri 2016).

The developments of the road infrastructure has been sensed as an urgency after realizing the few factors, which has created the necessity of high numbers of development of road infrastructure. Such influencing factors are such as the increasing population density of the country, the traffic flow and the socioeconomic importance. The government is not only fostering on the development of various new road networks but it is also concentrating on improving the existing road networks, which is getting hampered by an increasing numbers of road congestion. According to the ministry of the Oman Sultanate, coordination has already been established with the respective departments to improve the existing road networks in the country (AlMaimani and Johari 2014).

Omani government is spending almost half of its total investments on developing the means of transporting system. Nevertheless, the government has identified the necessity to have a good support to the logistic operation. In the transportation development, the investments on the road are comparatively higher. Road sector in fact has become the most powerful of the entire transportation infrastructure. The development is to facilitate the modern way of logistic operation, to support the increasing numbers of vehicles and to reduce the congestion from the road (Llanto et al. 2015). Nonetheless, road sector has become a potential resource to economy boost. It has contributed in the GDP growth of Oman as well. Nevertheless, road sector has become an option to boost the economy of the country. The contribution of the road sector is approximately around 6.8% in the GDP growth of Oman (Hvidt 2013). Realizing the potentiality of the sector, the Omani government has started spending a huge investment on developing the road infrastructure.

Risk Management in Road Construction

Road construction is facing various issues at the global platform. Some of the issues are as follows:

  • Issues before the construction have taken off- Land acquisition has emerges as a global issue. Process gets delayed because of this. There are huge scarcities of free land. Therefore, to get the lands available for the construction purpose, trees are cut that generally take a lot time. Another challenge in the road construction is the shifting of already existed utilities at the targeted place. This include many such as living people, houses etc. (Laurance et al. 2014)
  • Investigations, survey of land and design issues- The maps that are designed for a particular place are not updated. They remain in such state for a long time. This makes things difficult as it then requires the designing of the target land again (Laurance and Balmford 2013).
  • Issues related to the contract management- The role of independent workforce is very confused as many of the labours are not very clear with the concept. They do what they are asked to do. This makes things difficult and it also delays the project as well because they rely a lot on their communication with the site engineers. The communication gap in between the site engineers and the independent labours do also hamper the understanding level in between them. Nevertheless, the mentioned communication gap delays the project completion date, which actually forms a huge gap in between the allocated budget and the actual expenditures (Aziz and Abdel-Hakam 2016).

The particular study is on the road construction, which is becoming an increasing topic of discussion for the global world. Oman is not any different country. The global world in particular the non-OECD countries have realized the importance of road development. This is because of the increasing occupancies of vehicle. China, India, Oman and other developing and non-OECD countries have realized the importance of road infrastructure. Countries as such of China, India and Oman are making huge investments on their infrastructure development of roads. However, they have various challenges that hamper and delay the projection of road projects in big time. The challenge is common to the global world (Luoma and Sivak 2012).

The problem in road infrastructure development is many, which has become a challenge to the global countries. The problem takes place from before the construction of the target place. The problems are many such as the not updated designing of the target place, problem of communication with the independent workers, land acquisition, cutting of trees and shifting of utilities etc. Although the global countries have realized the urgency but the projection of the project and the poor management of the contractors have probably ruined expected success. They are getting successes but the success story is getting delayed, which is asking for extra expenditures.

The literature review is one of the main sections of the study. The literature review actually plays a role in justifying a research with the help of the previously conducted works by reputed scholars around the world on the target topic (Machi and McEvoy 2016). The introduction of literature review is for analysing the importance of the chapter and mentioning all the aspects which will be included in the work (Ramdhani, Ramdhani and Amin 2014).  This research is conducted on the risk management of the road construction projects in Oman. However, this chapter will vividly discuss the risks involved with the road construction and the techniques through which those risks can be reduced. The aspects like planning, cost, time and quality (Mahamid 2013). The literature review focuses on the risks of road construction in the developing countries. As Oman is also regarded as a developing country, these sources are easily implementable in this project. The sources of the literature review are used as the secondary data in the project. The authentic journals, research works and media reports are utilised as the secondary sources in the project. The chapter also includes the limitation of the literature and the chapter summary.

Literature Review

According to Economic update Oman (2012), it comprises one of the largest construction industry in the world. Oman has been riding constant growth for the last few years and has been vehemently constructing huge buildings and gigantic transportation and connectivity systems all around the country. This has been a very positive symbol for the Sultanate and the Middle East. However, like every developing countries road construction also deals with several hazards in Oman and hence, it is an ardent requirement to manage those risks.

Risk management generally deals with identifying the risks in the project, analysing the implications and seriousness of it, to plan the control of the implications from the risks, to evaluate the and imply the management decisions on the project in order to control the risks and to review the controls related to the risks (Glendon, Clarke and McKenna 2016).  The risk management also deals with contingency plan and the training of the employees for problematic situations (Lam 2014).

 The risk management of road construction is one of the important issues in the developing countries. The ignorance of safety measures, reckless road users, critical zone of road construction and the proper maintenance of the flagman are few of the major risks in the road construction projects in the road construction site (El-Sayegh and Mansour 2015). The problems like increase in the duration of the construction, unexpected realities in the ground, inefficient planning and designing are the major problems in the sector of road construction. The risks of the road construction primarily depend on cost, labour, land and capital along with techniques and duration taken for the work. It is very important to manage the risks properly in order to maintain certain bit sustenance in the construction projects.

Serpella et al. (2014) mentions the fact that the risk management is still not taken as a concern for the construction projects. However, it is necessary to introduce risk management in the construction sites. This research work advocates the fact that every construction company should have a risk management company.

The conceptual framework of every research work is an ardent requirement. The entire research work and the literature review are dependent on the conceptual framework of the project (Cajaiba-Santana 2014).Conceptual framework of a project clarifies all the pillars of the research.  It provides a definite shape for the entire research. The chapter includes that there are four aspects on which the management should work in order to become successful in neglecting risks during road construction.

There are various kinds of risks in a project like schedule risks, operational risks, technical risks, operational risks and other unavoidable risks (Kerzner 2013). It is important to solve most of these risks in the planning schedule of the project. As if the possibility of the risks are eradicated during the planning stage things can get better during the application of the planning in the project. Kendrick (2015), stated that the planning of construction includes various important issues like decision of budget, deterring the tools, workers and others which will be used in the project. If certain key principles are followed properly then these risks are easily avoidable.   

Alzebdeh, Bashirb and Al Siyabic (2015), stated in their work that most of road construction projects are in problem because of cost overruns. The planned cost is much lesser than most of the practical costs in the road construction. This is one of the major problems in the road construction in the developing countries. The external factors play a huge role in the escalation of cost in the construction of roads.  Alzebdeh, Bashirb and Al Siyabic (2015), stated in their work that most of the problem lies in the planning sector as many of the external sectors are not incorporated as a part of planning, the management do not take any specific step to reduce the issue of cost increase.  

Aziz and Abdel-Hakam (2016), mentions in his work on the hazards of road construction in the third world countries that most of the problems in the road construction is all about mismanagement in the planning stage. In the developing countries external factors like communication, the availability of the right materials, labour and the natural calamities like flood, storm or earthquakes play a major role in the risk making. If the weather of the construction location is not assessed properly, it becomes difficult for the management to understand the reason of the increase in cost.

On the other hand, Perera et al. (2014), declared the fact that the design of the construction was full of risks. In the third world countries cost cutting becomes one of the major aspects of road construction. Most of the establishment allots project to various organisation who tries to develop roads by taking a hefty amount of profit. There have been accidents and other hazards because of bad materials and unprofessional designing without surveying the construction sites properly. If these issues can be solved in the planning stage, it can reduce problems.  

 Mahamid (2013), stated in his research on the the roads of Palestine that often planning does not have a role in the risk management of a road construction project. The matter of the fact is that road construction or any kind of public welfare project is full of unpredictable happenings in the third world. The unstable political situations, labour wages and other hazards are not in the hands of the leaderships of the organisation. Hence, the planning should be flexible. There should be multiple plans for multiple problems in these kinds of projects. It is often necessary to shift and change the plans according to the requirement of time and the type of crisis the project is facing.

On the other hand, Zwikael et al. (2014), stated that the risks can be managed properly if the previous projects are assessed properly and the problems faced by the previous projects can be avoided. The study also mentions the fact that it is important to include the environmental risks related to the project. The incorporation of ideas in order o avoid environmental risks can be very useful. The management of the risks in the planning stage is the best way to avoid the problems during the project.

Jarkas, Al Balushi and Raveendranath (2015), stated in their work that the labour management involves reduction of risks in the countries like Oman. The elongated working hours along with problems in productivity and the availability of basic amenities like food, shelter and healthcare for the labour plays an important role in the risk management during the planning of road construction in the developing countries.

Cost overrun is one of the common problems in the sector of road construction in the developing countries. Love et al. (2014) acquired some reasons behind the cost overrun in these projects. The researcher mentions the fact that the estimated cost is often lesser than the practical expenditure required for road construction in the third world countries. The establishment often tries to allocate projects to the contractors who agrees to work or cheaper amounts of money. However, this directly affects the quality of the project. The incomplete road constructions is a common instance in these countries.

Shehu et al. (2014) describes each and every risk which are related to the cost of the project. The research mentions that every company should keep the contract values, type of project, sector of project, location of the project, data analysis of all the previous projects, procurement route along with the nature of the projects.

Dang et al. (2017), includes in their research that there are four kinds of risks related to cost in the construction projects. They are contractor related risks, project related risks, establishment related risks and the external risks.  These risks should be managed by using better technologies, skilled labour, tight schedule and perfect planning. The research mentions how the road construction works get delayed which is the main reason behind the cost overrun for these projects. To avoid such risks it is necessary to handle these situations with scientific tools and theories.

Alhomidan (2013), includes that one of the major risks in the countries like Saudi Arabia is the problem of cost overrun. The practical cost is not properly pre-calculated. The authors of this research mentions that to analyse and pre-calculate the cost of the road construction for a location where roads were never constructed before becomes very difficult for the constructing company. Most of the cost assessment and calculation is done by assumptions and this is the primary reason behind the hazards. Hence, the risks can only be handled with a better geological and environmental survey along with the examination of the materials which are used for the project of road construction.  

Larsen et al. (2015), identified the delay of the projects as one of the primary problems of the public construction in the Middle East countries like UAE. It is a fact that the delay of a public construction such as roads can create havoc problems for the public in general and the contractors. The schedule of a project is often delayed because of the delay in payment from the establishment. It has been observed that the establishments of the third world countries often delay payment decisions and hence it often becomes a risk for the contractors. The schedule of the projects also gets delayed because of natural hazards and the problems regarding labour and the facilities related to them.  Especially in the countries of the Middle East where the climate is often considered as adverse can be held responsible for the problems.

Few of the reasons behind the delay of the projects have been assessed as delay in approval of design, award letter and materials. Hence, it can be understood that the delay of the projects is directly related to the establishment most of the times in Oman (Khalid et al. 2013). The delay of the construction often is responsible for accidents. In the developing countries, various roads are often closed for construction. The construction sites often causes hazards like accidents as the sites are not arranged properly.

Yafai et al. (2014) stated in their research that the time management is a major risk as more time can put its impact on the cost of the project and can create hazards for the public. The delay of the project also creates havoc problems for the contractors of the roads. The contracts also suffer severely and often face huge losses because of this delay. The elongated projects often create problems for the people who travel in the road. Especially in case of the roads of the city, the repairing of the roads or any new construction of roads or railway tracks creates hazards for the common travellers. It creates problems like traffic jams and pollution. The construction sites are often not properly managed and this appears as a risk on the site.

On the other hand there are projects which did not have any such risks of delaying the project in Oman (Khalid et al. 2013). As the construction industry of Oman has been doing well in the last few years, it has integrated certain notions and principles for itself. It has utilised certain aspects like arrangement of skilled labour and deadlines for the construction companies which often works for the favour of the project. The companies often work professionally to avoid this risk of delaying a project. However, the planning stage plays an important role the implementation of a flexible schedule which can be changed according to the condition according to the velocity of the work (Khalid et al. 2013). Hence, the risk management in terms of scheduling time ha been considered seriously for various instance in the Sultanate of Oman.

Gorin et al. (2014), clearly stated in their work that the quality of the road primarily depends on four factors. The factors are good materials, skilled labour, rightful cost allocation and the management along with planning. Hence, these aspects should be looked after properly in order to keep things right in case of the road construction. The road construction in the third world countries often face scepticism because of the quality it provides. The roads are often of bad quality which causes hazards like accidents and repairing of roads. The repairing of roads are directly related to the cost overrun for the establishment. Both the contractors and the establishment is often considered as a part of this problem.

Dastidar and Mukherjee (2014) considered corruption as one of the major issues in the road construction around the world. Hence, corruption is considered as one of the major risks in the construction business. It has been observed more than once that the people related to the establishment are corrupt along with the people related to the construction company. These people often perform such activities for personal or professional benefits. The roads are often constructed in low cost in order to garner huge profits. The construction companies often do so in order to sustain their business for long times.

Magd and McCoy (2014) consider Oman as a nation of economic prosperity and happiness. It is a fact that the Sultanate of Oman employs thousands of expatriates in their country for work. A large share of these labours work in the construction companies. These companies are involved in road construction. However, the labour who are employed are unskilled and inexperienced. Hence, the risk of quality of the road construction remains question. The unskilled labour is practically illiterate in terms of controlling themselves in the work. This causes havoc risk issues in the work site locations. These locations are often full of technical devices and electrical machines. The skilled labour has the knowledge to handle these machines whereas, the unskilled labour are alien to it. These issues often cause deaths and injuries of those labours in the project sites. To manage such situations the organisation should arrange proper training schedule for their employees. Even a short process of training can make them gain confidence in the project sites and will also impact on the quality of the product.

On the other hand, the quality control is often not considered as a major issue by various companies. The bad quality of roads is often considered as the profit of the construction industry in various parts. These companies often consider that the quality is less important than the maintenance of the schedule (Alzebdeh, Bashirb and Al Siyabic 2015). The risk management includes these issues. The quality of the roads is the most important aspect of the construction. It carries the highest percentage of risk in during the construction and after the construction of the roads. If the quality of the roads is poor it often causes accidents and hazards like slow traffic which is not at all good for the developing countries.

The limitation of the literature review is mandatory for each and every project (Neuman 2016). This project also deals with the risk management issues. This project also deals with various short comings. First of all, it is almost impossible to consider and include all the theories regarding risk management in this chapter. Secondly, all the research works are not included in this project. The road construction project deals with various aspects of risk, the researcher has chosen a specific categorisation in this research. Other categorisations are not used properly in this chapter. Lastly, the limitation of the research remains of the fact as enough numerical data is not available on the risk management on this topic, it is almost avoided in the literature review.

The chapter of literature review includes various chapters like the introduction, the risk management of the road construction, the conceptual framework of the research; aspects of risk management like planning, time, quality and cost along with the literature limitation (Aziz and Abdel-Hakam, 2016). The chapter thoroughly discusses about the bits and pieces of risks and the role which the management should play in order to manage it. The chapter mentions various views and counter views of authors and researchers of various fields. However, the chapter has included the most authentic sources for the literature views. The chapter includes the four primary factors of risk management are planning, cost, quality and scheduling. The chapter vividly discusses each and every category of the risk management properly and the process by which it can be avoided. The chapter mentions the road construction projects of many developing countries like UAE, Saudi Arabia and Palestine in order to incorporate a comparative study with Oman. As all these countries are developing countries the risks are quite similar to each other along with the risk management techniques.

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