Problem
Construction company X from Europe have agreed with Investor Y from the United Arab Emirates to work on their new project. Investor Y from the UAE is a governmental institution. Company X has great experience in Europe, and this is their first project in the Middle East. A construction project with a contract sum of 210 million AED is initiated by the investor. The contract type was the design and build contract form, and it is a firm-fixed-price contract. All the payments will be done in local currency, dirhams. The project adopted direct negotiation as the tendering procurement method. The contractual price is very similar to real costs from similar projects that company C implemented in Europe. The date of site possession will be on May 1, 2021, and the completion date of the project is estimated to be October 27, 2023. Although the project scope is wide, the company believes that they will be on time by analyzing the duration of similar projects with less scope from Europe. The project management plan will be taken from a similar project that was implemented 5 years ago in one European country. Investor Y expects to get a construction permit by the end of 2021, and after this date construction company X will assign their project manager. Instead of the primary contractor, the payment will be issued directly by the investor to the suppliers, subcontractors, and nominated subcontractors within the project in dirhams. Human resources will be acquired from the domestic market in the UAE. Only management staff will be assigned from Europe headquarter of Company X. The selection of proper risk management tools and techniques and the selection of suitable projects are critical for better decision-making.
Task
a) Identify at least 7 potential risks from this project and discuss how they can affect the project. Give your critical reasoning of the effects.
b) Identify the probability and impact of identified risks based on your subjective opinion.