Modified Bayesian Network–Based Risk Analysis of Construction Projects: Case Study of South Pars Gas Field Development Projects

Abstract

Construction projects face substantial hazards and losses due to their increasing complexity. Therefore, risk management plays an undeniable role in avoidance and mitigation of extended time and cost overruns. In this paper, a project portfolio risk assessment model based on the Bayesian network approach has been proposed in which the probabilities and expected values of schedule delays and cost overruns in construction projects are evaluated with respect to different risk levels of the project portfolio. The developed approach not only explicitly quantifies uncertainty in the cost and time of projects but also provides an appropriate method for modeling complex relationships in projects, such as causal relationships between risks as well as use of expert judgments for evaluating prior and conditional probabilities. The developed model is applied to Phases 13 and 14 of the South Pars gas field development projects in Iran as a case study to validate the model. Findings of the study reveal that shortage of resources, unforeseen activities, and contractor financial problems can definitely bring about delay in these projects.