Risk Identification in Megaprojects as a Crucial Phase of Risk Management: A Literature Review

Abstract

The purpose of this study is to perform a literature review of risk management in megaprojects and systematize the risks studied in the literature. A systematic search of the main databases has been performed. The contributions include: (1) a bibliometric analysis of articles; (2) the systematization and classification into nine categories of the risks found in a content analysis of the articles; and (3) the identification of possible areas of interest for research and practice. Risks are comprehensively categorized to assist practitioners during the identification phase, while potential areas for future lines of research are presented for academics.

Lessons for Construction: Delivering Mega Project on Time Through Culture and Hoshin Kanri

“…This reveals that similarities could exist between the production systems of construction projects and oil and gas projects, which supports the argument that Hoshin Kanri has implications in the lean construction community and construction industry. Sanchez-Cazorla et al (2016) argue that general risk categorization can be difficult due to the project complexities. Here the transparency that the Hoshin Kanri method generates could have the implication that allows its decision-makers to identify risks early, on multiple organizational levels.…”

“…1 Owner and Director,Zephyr Consulting,Denmark,+45 6169 9150,sln@zephyrconsulting.dk Not only EY (2014) has documented the complex nature of mega projects and its many risks. Sanchez-Cazorla et al (2016) present a literature review of previous research on risk in mega projects across several industries (listing both construction and oil and gas) and conclude that cost overrun and schedule delays are everyday life, but no detailed and consistent categorization of risk exist due the complex and adverse nature in these types of projects. Flyvbjerg (2014) adds to this by outlining that only one in ten construction mega projects is delivered on time and budget.…”

“…According to Kardes et al (2013), projects with above 10 diverse teams, multi-million-dollar budgets, complex contract structure, and time frames stretching across multiple years can be defined as mega projects. Furthermore, authors agree that the multiple high complexities accumulate and increase the risks in these types of projects (Bruzelius et al 2002;Flyvbjerg et al 2003;Kardes et al 2013;Sanchez-Cazorla et al 2016).…”

“…Looking at EY (2014); Flyvbjerg (2014); Flyvbjerg et al (2003); Sanchez-Cazorla et al (2016), it becomes clear that mega projects within both construction and oil and gas contain large risks and share the trend of overrunning budget and time, strongly indicating that they are very much alike.…”

Adopting a QCA Approach to Investigating the Risks Involved in Megaprojects from Auditing Perspective

“…Due to its high volume of investment, great community involvement, complex decision-making processes, and many stakeholders involvement, megaproject is the wild beasts in the project world and hard to tame [8,9], and those projects are exposed to high levels of risks [10]. Many megaprojects such as airport, bridge, and highway are usually money pits where funds are simply "swallowed up" without delivering sufficient returns as a result of unbalanced subjective beliefs and information in assessing risks and uncertainties, and taking corrective actions to effectively control and manage the identified risks at the right time [11].…”