Great Northern Hotel Refurbishment Project Construction Essay

Great northerly Hotel Refurbishment Project Construction EssayA encounteriness circumspection delineate was undertaken to feel potential jeopardizes that may occur alongside the restoration of Great northerly Hotel. The chief executive of RAM-led consortium, which has been selected by Kings Cross Central to refurbish the Great Northern Hotel, appointed our aggroup to identify, analyze and develop proper recommendations for managing potential risks.Our team up used a cause-effect depth psychology based on a set of conclusions identify after several meetings with experts and brainstorming sessions to highlight aras of possible concern for the project. Another method acting used was to analyze historical records and reveals from antecedent turn of events projects.The results of the report dodging the fact that, without an accurate risk management applied forward setting the baseline for the project, various factors may affect the overall duration and the necessary work o ut to refurbish the Great Northern Hotel.2. INTRODUCTION AND METHODOLOGYThis report was requested by the chief executive of RAM-led consortium, before the beginning of Great Northern Hotel restitution. Our team was asked to submit its findings by 26th of May, 2010.The purpose of this report is to investigate what are the possible threats for this redevelopment project and to analyze how their impact bay window be minimized. Our team has responded to this request by developing a list of potential risks that might affect the refurbishment project and by carrying out a thorough risk analysis, as understanding the nature of risks is a pre thoughtfulness for a proper response, and withal by suggesting appropriate recommendations for minimizing negative impact on the project. The objective of this report is not to eliminate risk or uncertainty, but to take a fundamental look into the future of the refurbishment project and to identify possible threats.By risk, our team understands the possibility of something happening that can affect the prospects of achieving project goals (Maylor, 2003, scalawag 192). Nevertheless, our team to a fault took into consideration several other risk definitions, all of them be the same idea. Some examples of definitions our team has worked with are listed bellow put on the lines are those factors that may cause a failure to meet the projects objectives (Burke, 2003, page 253)Risk is the expected consequences of an face and the prospect that the result might occur (Kendrick, 2003, page 2)The possibility of suffering harm or loss (Maylor, 2003, page 192)Considering its limitations of identifying all risks that might affect the refurbishment project as it is almost impossible to foresee all future events our team used these definitions in order to outline major(ip) areas of risks for construction projects, especially for the refurbishment project.To tackle risks, our team applied the risk management plan proposed by Burke (200 3), which included the undermentioned stepsIdentify and categorize risks measure out and prioritize risksDevelop risk response/managing risksRisk identification is considered to be the most significant part of risk management process (Burke, 2003), as risks that are not identify can have negative consequences on the project. For this step, our team chose to consider multiple techniques in outlining major areas of risk for the refurbishment project. Our main method implied categorizing risks, as this method can lead to the identification of specific problems (Kendrick, 2003). Our team mainly looked at projects objectives to define potential external and internal sources for risks.In doing this, our team focused on some of the methods indicated by Burke (2003), such as having meeting with experts and with members of the personnel to share risks experiences as previous experience can sacrifice to risk identification -, having constant brainstorming sessions and also analyzing histor ical records and reports on previous construction projects. After collecting results from the methods mentioned, our team applied a cause-effect analysis to identify risks for the refurbishment project.After having identified a range of potential risks, our team tried to measure the impact they could have on the project. Assessing how likely an event is to occur and determine the extent of the effect of the event (Maylor, 2003, page 195) is known in project risk management as risk quantification procedure. Risk quantification also implies undertaking a risk priority analysis (Burke, 2003), in order to establish what areas of risks to address first. For this maneuver, a Probability/Impact Matrix has been created to measure the train of risk and to prioritize potential risks.Final step undertaken by our team was to develop responses for the identified risks. In risk management, after identifying risks, they can either be reduced or mitigated in some way (Maylor, 2003). There are sev eral procedures to respond to risks (Burke, 2003), among whichEliminate risks avoiding the risk by removing cause (Burke, 2003, page 262)Mitigate risks reducing risk probability and impact (Burke, 2003, page 262)Deflect risks transfer the risk to another party (Burke, 2003, page 263)Accept risksAs eliminating risks all told cannot always be a successful procedure, our team has chosen to combine the above mentioned procedures and offered solutions for eliminating, mitigating and deflecting risks.3. FINDINGS3.1 GENERAL CONSTRUCTION RISKSBefore listing the results of the analysis undertaken for the refurbishment project, this report will outline some of the risks that are generally affecting construction projects. This information will contribute to a better understanding of potential risks a construction project may imply and it can influence part of the decisions concerning further risk monitoring and control for the refurbishment project.Based on selective information collected from meetings with experts and with members of the personnel, from brainstorming sessions and from the analysis of different reports of previous construction projects, out team concluded that there are several ways of classifying risks in construction projects.Our team has elaborated the following classification to underline possible areas of risks for construction projectsFinancial risks which can include labor and material work or wasted charges from contractors or suppliersTime risks which can include delays caused by different factors, major discrepancies in the midst of estimate and actual durationsTechnological risks which can include misinterpreted construction procedures or design assumptions or unplanned site conditionsSocioeconomic factors such as environmental organizations or economic instabilityOrganizational factors such as communion between workers, contractual relationsOperational risks such as construction defects, labor risks, grapheme insufficienciesGene rally, data analyzed revealed the fact that construction projects are much inclined to risks, as they rely on multiple factors to achieve their goals, such as material suppliers, labor force, site conditions, choice surveillance and fixed budgets. Moreover, results also suggested that construction projects have a higher degree of uncertainty than other types of projects, as they can be easily influenced and affected by weather condition or political and economic climate.The conclusion our team reached is that the refurbishment project can also be affected by the above mentioned factors and that a minute risk management plan is compulsory to be developed for the project to reach its goals.3.2 IDENTIFYING RISKS FOR REFURBISHMENT PROJECTResults collected from our meetings with experts and personnel members, from our brainstorming sessions and from the analysis of previous reports on construction projects indicated that for the refurbishment of Great Northern Hotel multiple areas of risks should be taken into consideration.From the areas identified, our team will outline through this report the first major categories of risks that could affect the refurbishment project. These categories areTime risksCosts risksQuality risksA cause-effect analysis has been undertaken in order to identify time, costs and quality risks by considering the objectives of the refurbishment project. The findings are listed in the following pages.For a better understanding of our analysis, our team included the objectives of the refurbishment project. The project has three main objectivesRefurbish the Victorian-build Great Northern Hotel by early 2011Constructing a new boutique hotel, with 94 luxury bedrooms, a bar and a restaurant by late 2011Open the hotel in time for London Olympics 2012By applying a cause-effect analysis, our team identified risks on time, costs and quality, their causes and effects. The risks are listed in the following pagesI. Time risks trying delays in refurbish ing the hotel study differences between estimate time and actual time in constructing the new boutique, the bar and the restaurantGrand opening postponed with two monthsWorkers lookerCausesPersonnel causes illness, deaths skillful problems problems with work equipmentProblems with suppliers equipments not delivered on timeWeak communication among personnelChanges in contract between client and contractorLack of risk management among workersOrganizational culture conflictsWeather volatilityLack of detail work plans from contractorNecessary approvals not given on timeEffectsSevere delaysSlow progressDelays in money allocation for work equipmentProject failureII. Costs Risks inadequate budget for refurbishmentHigher costs for construction of new boutiqueCurrency magnetic declinationHotel not opened in time for the OlympicsCausesIncreases in labor and material costs from suppliersHigher bills from contractor on work progressInstable economyEmergency situation, such as extra equipme nt or extra personnelEffectsOver-budgetSlow progressActivity haltProject failureIII. Quality risksPoor building conditionLow quality refurbishmentWeak structure for new constructionLaw quality of material usedCausesUnstable structure of old buildingLack of professionalismMisinterpretation of work tasksIncorrect design assumptionsEffectsDelays caused by additional plant lifeObjectives not achieved on timeOver-budgetProject failureRISK QUANTIFICATIONNext step undertaken by our team was risk quantification, in order to measure risks probability and to establish their priority. This report includes a Probability/Impact Matrix for the risks identified.The Matrix has been developed using the analysis results following our meetings with experts and staff members, our brainstorming sessions and from the analysis of previous reports on construction projects.Risks Probability/Impact Matrix Probability and Impact have been rated on a scale from 1 to 4, where 1 = Unlikely/Minor, 2 = Possible / buffer, 3 = Likely/Major, 4 = Almost certain/CriticalRisksProbabilityImpact1. Severe delays in refurbishing the hotel342. Major differences between estimate and actual time in constructing new boutique, bar and restaurant233. Grand opening postponed with 2 months224. Workers hold215. Insufficient budget for refurbishment236. Higher costs for construction of new boutique227.Currency fluctuation218.Hotel not opened in time for the Olympics349.Poor building condition3410.Low quality refurbishment1211.Weak structure for new construction2312.Low quality of materials used11By rating Probability and Impact for the identified risks, our team also prioritized them, as followsI. Major risks (Major Impact, Likely Probability)Severe delays in refurbishing the hotelHotel not opened in time for the OlympicsPoor building conditionII. Moderate risks (Moderate Impact/Possible Probability)Major differences between estimate and actual time in constructing new boutique, bar and restaurantGrand openi ng postponed with 2 monthsInsufficient budget for refurbishmentHigher costs for construction of new boutiqueWeak structure for new constructionIII. Minor risks (Minor Impact/Unlikely Probability)Workers strikeCurrency fluctuationLow quality refurbishmentLow quality of materials usedRISK RESPONSE AND RECOMMENDATIONSBased on the results of risk identification, quantification and priority, our team makes the following recommendationsFor eliminating risks, the client/contractor shouldObtain necessary approvals before starting the refurbishmentCheck material quality before beginning the refurbishmentBefore write contract with suppliers, include statements on fixed costs and material delivery schedule/replacementHave more meetings between client and contractor before signing the contract, to clarify each detailSeverely check workers background before hiring themFor mitigating risks, the client/contractor shouldName a risk management citizens committee and include a risk management planC arry out condition surveys and measure surveys to establish building conditionElaborate a risk management plan focused on individualsMonitor timetables and ask for weekly detail work plans and proof on progressInclude weekly quality controlsAllocate extra money for unplanned events in the tendering periodInclude morning meetings with workers to explain details on tasksOffer common lunch for workers to modify communicationFor deflecting risks, the client/contractor shouldHire an Audit company to keep track of accuracy in billings and work progress4. CONCLUSIONSThis report outlines what potential risks can a refurbishment project encounter alongside its duration. By using appropriate methods for identifying the risks and their causes, the report highlights what impact these risks can have on the project and to what extent they can be measured and prioritized. The report also includes a set of recommendations for eliminating, mitigating or deflecting potential risks.By making this rep ort, our team reached the following conclusionsMost decisions in construction projects are based on incomplete information with an associated train of uncertainty about the outcome (Burke, 2003, page 252)In construction/ refurbishment projects, level of uncertainty can reach a high level in multiple areasNo project should start before developing a risk management planManaging risks should follow fixed steps Identification, Quantification, Prioritizing and Risk response and use as many sources as possible when reaching these stepsRisk response should combine different procedures to eliminate, mitigate, deflect or accept risksBefore deciding for one of these procedures, a cost/benefit analysis should be undertakenFor refurbishment projects it is very difficult to identify all risks, as they are more inclined to risks than other types of projects and can be easily affected by authorities or by economic climateThis report also includes outputs from Microsoft Projects on project sche duling, resources, task and finances developed by our team, in the Appendices chapter.This report counts 2365 words.