Risk Management Study Of Colombia G3.2 Coal Fire Power Plant

As a result of complexity and particularity,overseas engineering projects are normally regarded as "high risk business".Compared to traditional domestic engineering projects,contractors need to face a market with different cultures,languages,environment and laws which means they need to suffer more risks,for whose contractors who cannot control and manage these risks,they will lead to fail projects and lose money.But as the approaching of global economy and predicament of domestic economic growth rate,more and more Chinese contractors decide to explore overseas market for further development.So how to avoid and control these risks become the key point of success.China United Engineering Corporation(CUC)is one of those contractors who want to explore overseas market.To save the turnover of the company,the leader layer of CUC decides to put the working center of gravity in overseas market especially in South-east Asia and South America.Through CUC’s effort,they win the bid of GECELCA 3.2 coal fire power plant in Colombia.This is the biggest project to CUC up to now and CUC’s leaders value this project primarily.GECELCA 3.2 coal fire power plant is regarded as investigating subject in this paper,and analyze it through those four aspects:risk sources arrangement,risk management,risk evaluation and risk loss analysis(1)Risk sources arrangement.Through the specific characteristics study of overseas engineering project,arrange and specify the risk soruces to avoid the losses acused by the missing of risk sources.(2)Risk evaluation.Through mathematical methods such as G1 weighting method,Fuzzy comprehensive evaluation methods to explain how to use qualitative and quantative menthods to analyse risks in the overseas project.(3)Risk control.In this part,firstly introduced risk remaining,risk avoid,risk giving up and risk transfer four risk control methods.For risk remaining and risk reducing,steps of risk warning and risk monitoring are introduced how to establish in the project.Besides,an example of estension evaluation methods is illustrated in the paper.Finally contract transfer and insurance transfer two risk transfer methods are illustrated.(4)Decision analysis.There are three parts in decision analysis.profit analysis:loss analysis,and risk appetite analysis.In profit part,it will mainly introduce how CUC evaluate a project before bidding.In loss part,it tells how CUC divide loss and how to calculate loss in risk with a specific case.In final part of utility function,in risk appetite analysis part,it will tell what utility function it is and how to use it in overseas engineering industry.Hopefully this paper can help CUC and other Chinese contractors in their business.