Integrated Risk Management of Large Capital Projects

Author: De Wet, John
Supervisor: Dr Philip Theron
Date: March 2009

The commodities boom of the last decade resulted in the South African mining and construction industries experiencing a period of rapid sustained growth. At the same time the South African government was also utilising public sector spending on capital projects as a catalyst to achieve the goals of ‘Accelerated and Shared Growth Initiative’. These combined events resulted in the mining and construction industries experiencing an acute shortage of skills and construction materials, long delivery lead times, and unprecedented high construction costs. These circumstances have brought about an increase in the level of uncertainty and the risk of both project schedule and cost overruns.

A two stage design has been chosen, with the first stage being an exploratory study to clarify the research questions and the second stage to develop the research design and questionnaire containing the investigative questions. For the data capturing process the questionnaire was electronically mailed to a selected sample of respondents who comprised project managers and other risk management professionals involved on large capital projects. The study contains a number of valuable conclusions which were derived from the data analysis and ended with useful recommendations that would make risk management of large capital projects more effective, if applied. Lastly, two subjects for future research were also identified.