Towards the Integration of Risk and Value Management

A Ranesh
G Zillante
N Chileshe


Governments are increasingly faced with the challenge of delivering infrastructure developments under difficult budget constraints. Public Private Partnerships (PPPs) are being used widely as a means of meeting public infrastructure demands through private finance. The aim is to achieve value for money (VfM) through the allocation of risks to the party who can manage them more effectively. If project risks are not well managed, the project will face cost, quality and time overruns thereby affecting the viability of the project. Both Risk Management (RM) and Value Management (VM) are considered to be best practice in project management and enable organisations to define objectives when delivering complex projects whilst reducing risk and maximising value. Over the years researchers and practitioners have argued that the integration of RM and VM in a single study would avoid duplication of work and deliver better value for money thereby leading to better project outcomes. As part of an on-going doctoral study into the integration of risk management and value management in PPP projects, this paper attempts to examine the application of risk and value management practice in infrastructure development projects, predominantly in PPP projects, through semi-structured interviews conducted as a qualitative research methodology with ten industry practitioners. To achieve this aim, this paper attempts to identify the similarities between the two processes along with the benefits and critical success factors for the integration of RM and VM in PPP projects. The results suggest that, although risk and value management activities are said to be used in projects; “formal” RM and VM studies are rarely undertaken. The observations to date suggest that, although there are barriers against the integration of VM and RM, there is a need for the development of a systematic process to enable the integration of risk and value management to occur.

Full Text:



Abd-Karim, SB, Lowe, DJ, Abdul-Rahman, H, Wang, C, Yahya, IA & Shen, GQ 2011, 'Integrating risk and value management using IRVM workshops: Case studies in infrastructure projects in UK', Scientific Research and Essays, vol. 6, no. 12, pp. 2470-2479.

Al-Saleh, YM & Taleb, HM 2010, 'The integration of sustainability within value management practices: A study of experienced value managers in the GCC countries', Project Management Journal, vol. 41, no. 2, pp. 50-59.

Australian National Audit Office 2009, ANAO Audit Report No. 20 2008-09, Approval of Funding for Public Works, Commonwealth of Australia, Canberra, ACT.

Chung, D, Hensher, DA & Rose, JM 2010, 'Toward the betterment of risk allocation: Investigating risk perceptions of Australian stakeholder groups to public-private-partnership toll road projects', Research in Transportation Economics, vol. 30, no. 1, pp. 43-58.

Clifford, B 2006, 'Improvement through cooperation - Integrating partnering, value management and risk management', One day seminar on 'Recent Developments in Project Management in Hong Kong', Hong Kong, pp. 6.1-6.8.

Cole, R, Burke, M, Leslie, E, Donald, M & Owen, N 2010, 'Perceptions of representatives of public, private, and community sector institutions of the barriers and enablers for physically active transport', Transport Policy, vol. 17, no. 6, pp. 496-504.

Dallas, MF 2006a, 'Integrating value and risk management - the key to success', Delivering Value Today and Tomorrow, Brighton, UK, 14 -15 September.

Dallas, MF 2006b, Value and risk management: a guide to best practice, Blackwell Pub, Oxford.

Dallas, MF 2006c, 'Maximising project value through integrated risk and value management', Knowledge Bank, .

Department of Finance and Administration 2006, Guidance on the Gateway Review ProcessâA Project Assurance Methodology for the Australian Government, Asset Management Group, Department of Finance and Administration, Australian Government, Canberra.

Dikun, S & Rahman, HZ 2010, 'The integration of value engineering and risk management in strategic alliance public private partnership', Value World, vol. 33, no. 2, pp. 44-53.

Ellis, RCT, Wood, GD & Keel, DA 2005, 'Value management practices of leading UK cost consultants', Construction Management & Economics, vol. 23, no. 5, pp. 483-493.

Given, LM (ed.) 2008, The Sage encyclopaedia of qualitative research methods, Sage Publications, Los Angeles, California.

Graziano, AM & Raulin, ML 2004, Research methods: a process of inquiry (with student CD-ROM), 5th ed. edn, Pearson, Boston, MA.

Green, SD 2001, 'Towards an integrated script for risk and value management', International Project Management Journal, vol. 7, no. 1, pp. 52-58.

Griffin, L & Langdon, D 2006, 'Taking Projects by S.T.O.R.M - A model for integrating value, opportunity and risk management', Value Magazine, vol. 15, no. 1, pp. 24-26.

Haghnegahdar, L & Asgharizadeh, E 2008, 'The risk and value engineering structures and their integration with industrial projects management (A case study on I. K. Corporation)', Proceedings of World Academy of Science, Engineering and Technology, vol. 40, pp. 375-383.

Hiley, A & Paliokostas, P 2001, 'Value management and risk management: an examination of the potential for their integration and acceptance as a combined management tool in the UK construction industry', COBRA, Cutting Edge and ROOTS conferences 2001 pp. 3-5.

Infrastructure Australia 2008, National Public Private Partnership: Policy Framework, Infrastructure Australia, Commonwealth of Australia, Instiute of Value Management Australia 2012, Value Management - concept and application, viewed 2nd April, . Kirk, DQ 1995, 'The integration of value management and risk management', SAVE Annual Proceedings pp. 62-70.

Latham, M 1994, Constructing the team, London, UK.

Male, S, Kelly, J, Fernie, S, Gronqvist, M & Bowles, G 1998, Value management: the value management benchmark: Research results of an international benchmark study, Thomas Telford Publishing, London.

Moonthanah, DP, Poynter-Brown, R & Jefferyes, M 1998, 'A strategy for managing project risk in value management studies', SAVE International Conference Proceedings 1998, pp. 266-274.

Office of Government Commerce 2007, Risk and value management; Achieving Excellence in Construction Procurement Guide: Procurement Guide 04, Office of Government Commerce, HM Treasury, London.

Project Management Institute 2008, A guide to the project management body of knowledge (PMBOK Guide) Fourth Edition, Project Management Institute Inc, Pennsylvania, USA.

Queensland Department of Main Roads 2009, Main Roads Project Delivery System, Engineering and Technology, Department of Main Roads, State of Queensland, Queensland.

Shen, Q & Liu, G 2003, 'Critical Success Factors for Value Management Studies in Construction', Journal of Construction Engineering and Management, vol. 129, no. 5, pp. 485-491.

Standards Australia 2007, Australian Standard AS 4183-2007 - Value Management Standards Australia, Sydney, NSW.

Standards Australia 2009, Australian/New Zealand Standard AS/NZS ISO 31000:2009 Risk managementâPrinciples and guidelines, Standards Australia, Sydney, NSW.

Teddlie, C & Tashakkori, A 2009, Foundations of mixed methods research: integrating quantitative and qualitative approaches in the social and behavioural sciences, Sage Publications, Thousand Oaks, California.



  • There are currently no refbacks.