Risk Analysis & Management In The International Contracting Projects

International engineering contracting is a kind of business filled with risk. The profit and risk of international engineering contracting are co-exist all the time. The key of success is to look on risk in a proper way, conduct correct risk analysis and evaluation, employ proper methods to control the risk in order to minimize or avoid the damages it might cause, and gain some benefit out of the risk. First of all this paper raised risk is inevitable to all contractors in the international engineering contracting business. Secondly, as for the handling of the risk in international engineering contracting, it will be analyzed in three phases: risk factor analysis, risk evaluation and risk control and management, which include risk avoidance, risk sharing, risk prevention, risk transfer, risk retention and risk utilization. Based on this point, this paper considers that risk should be divided into systematic risk and non-systematic risk regarding their impact to economic entities. Concerning the important role of contract management, this paper will study risk strategy basically from the legal perspective by combining theory with practice and focusing on practical methods. For example, the contractor can require payment guarantee from the owner as well as state currency terms against inflation risk, and clauses of risk in the contract. The contractor can also clarify owner and contractor's design responsibility in advance and reach a certain contract arrangement with the owner so that one party could claim compensation to a reasonable party. At last this paper emphasized that contractor should investigate various subjective and objective conditions that risk may come from, analyze the ponderance of the effect that the risk may cause in project process, plan for dealing with the project risk, adopting methods to control and transfer the risk into profit, obtaining more benefits by handling the risk appropriately...