Risk management is an important element of project management and the gateway process. It involves the systematic application of policies, procedures and practices to identify, quantify and manage risk where necessary, allocate risks, provide contingencies, and monitor and manage to take account of risk. A suitable reference document for risk management is Australian Standard AS4360.
Risks to capital projects include time and cost overruns, high service delivery costs, disruption to service delivery during redevelopment of existing facilities and insolvency of builders or sub-contractors.
The following section outlines some of the systems used by PCGs to manage risk in capital project developments.