Project Risk Management

Project Risk Management

Eric Bani
Professor James Young
“Politics, Institutions, and Project Finance: The Dabhol Power Project.
Strayer University 2011

    Project risk management has been identified as the number one cause of project failure by most if not all organizations. In view of that project risk management is given prominent place in any project undertaken by businesses. Project managers are therefore are under immersed pressure to practice the best risk analysis methods in order to complete projects in time and within budget for the organization to be profitable.
    Project risk management is a science if you will, that uses several methods in identifying and accessing the risk factors and opportunities associated with a particular project and devising an effective response plan to avoid, mitigate, transfer or accept the risk. The project manager should assemble a professional team of different technical skills needed to complete the project making sure the project specifications are met. As a leader the project manager has to possess leadership qualities and most importantly communications skills to be effective in managing his/her team.
    The Dabhol power project was a good idea designed to generate additional electricity to India’s growing population but there were several problems including political, institutional and financial from the onset. Politically, India was a communist country aligned with the former Soviet Union thus the country was run by the central Government. After the Soviet Union disintegrated, India sought to find new friends in the western world and invite private investors into the country. Because they had little experience in doing so, serious mistakes were made in the Dabhol power project. In addition, there were few private institutions with private sector experience to handle such a massive electrical power project. Lack of negotiating skills of complex financial transactions was also prevalent due to the cultural and financial...

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