A pilot study on the integration of risk and value management
Date
2012
Authors
Ranesh, A.
Ma, Y.F.T.
Chileshe, N.
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Conference paper
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ICVEM 2012 : Innovation in the value methodology : proceedings of the International Conference on Value Engineering and Management, 2012, pp.54-59
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International Conference on Value Engineering and Management 2012 (6 Dec 2012 - 7 Dec 2012 : Hong Kong)
Abstract
Public Private Partnerships (PPPs) are being widely used by governments to deliver infrastructure development projects with the aim of achieving value for money through private finance. However, speculation exists in regard to this method of procurement through PPPs. Organisations are deemed to take risk in order to maximise value. Likewise, the key value driver in a PPP is the identification and allocation of risk to the party having the greatest capacity to manage it. This research is part of an on-going doctoral study into the integration of risk management (RM) and value management (VM) in PPP projects. RM and VM are regarded as important monitoring processes in project management and are widely applied in PPP projects. RM sets out to reduce risk and VM uses facilitation to pursue best value through explicit identification of desired project functions. Fundamental similarities between these methodologies suggest that they are consistent and integrated together. Likewise, it is considered that VM also helps pursue the interests of RM and vice versa, so conducting these two activities separately may result in a duplication of effort. Thus, there is an argument that the wider implementation of an integrated risk and value management (IRVM) framework in the procurement of projects would deliver added benefits leading to better project outcome. This paper is a pilot study conducted through ten semi-structured interviews with experienced professionals to investigate the practice of value and risk management in infrastructure development projects, predominantly in PPP projects. It has been identified that although RM and VM are said to be used within the organisation, formal risk and value management are rarely used. At the same time, it is identified that due to lack of knowledge and lack of an available guidelines on an IRVM process, it is highly desirable to formulate an appropriate framework.
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