RISK MANAGEMENT FOR ENGINEERING-PROCUREMENT- CONSTRUCTION (EPC) HYDROPOWER PROJECTS IN PAKISTAN

Abstract

Pakistan is facing acute energy shortages hampering the economic and infrastructure development of the country. Investment in reliable, low cost, clean and sustainable energy source is necessary for growth of economy. Although blessed with abundant hydropower resources, only 11% of the available hydropower resource is developed so far. Different project delivery methods are utilized by clients in public and private sector, for the development of hydropower project. Engineering-Procurement-Construction (EPC) projects involves significant risks as single entity is responsible for designing, managing all the procurement issues and finally constructing the project. This study is qualitative and exploratory in nature focusing on the risk inherent to EPC hydropower projects, allocating those risks and finally mitigation measures are suggested. The research findings indicate that construction risk group is the most severe risk group having 6 risks in top 15, followed by geological & Hydrological risks. Individually subcontractor’s performance issues and local population resistance are more severe risks. Interviews and site visits also specify that risk management knowledge and application in construction sector is still on the lower side. These results and mitigation measures derived from the expert opinion aims at providing the awareness for the project stakeholders investing in hydropower sector. As a result, they can develop customized risk management plan based on the findings of this research.