What Are the Key Risks in Stadium Construction Projects?
The requirement for bigger and better stadiums has grown tenfold in the last decade. Gone are the days that hundreds or thousands of people squeezed onto terraces to watch their beloved team triumph or fail. Now, sport is much more commercialised. Clubs must generate sufficient revenue to survive and thrive, which has led to higher price tickets and in turn, a demand for better spectator experience. Facilities must live up to expectation, in terms of seating, toilets and concessions. But it doesn’t stop there. Higher demand for corporate hospitality packages means grounds are also under pressure to provide comfortable lounges and pre-match dinners for high- paying spectators.
With clubs needing to provide for all levels of supporters, many are investing in large-scale stadium redevelopments to keep up. Here, we explore the key risks involved in stadium redevelopment and how to overcome them. What types of risks are involved? With a construction project of stadium scale, there are many risks that contractors and developers much prepare for to ensure the project runs smoothly. Here are some of the most common economic, environmental, technical and logistical risks to be aware of. Economic Risks There are various financial risks that project managers will try to minimise throughout the project. For instance, there may be unexpected rises in material or service costs that haven’t been accounted, which may impact profitability. There may also be a change in local taxes or a fluctuation in foreign exchange rates, which is important if any parts of the project are taking place overseas.
There’s a whole host of environmental risks present. The unique weather systems in the project area should be taken into account before design and build commences, as well as the potential for natural disasters. It’s essential to look at topography: is the stadium located at the top of bottom of a hill, is it on a floodplain or near a river? Project managers will also need to consider wildlife, hazardous waste removal and sustainability. Technical Risks Throughout the design and build process, there are technical risks that need to be managed. These are any issues that mean the project cannot be completed, such as inadequate or incomplete design, errors in the survey information, or selection of the wrong building materials. Typically, these types of risk are more prevalent if the project scope changes or building requirements change. Management Risks Logistical risks are prevalent no matter what the scale of project, so effective and efficient project management is essential.
This may include insufficient labour resource, lack of available building materials and inadequate transportation methods. There may also be risks should communication break down between contractors, leading to a lack of coordination. How to mitigate these risks? There are several things developers can do to reduce the likelihood of these risks. Firstly, it’s essential to identify them before the project commences. Professionals should complete a full risk assessment that outlines each risk, the level of hazard they present and the implications of each one. Then, a risk management plan must be put in place. It’s important to closely monitor the implemented risk responses to ensure they remain adequate and efficient. It’s also essential to have adequate construction insurance. This protects businesses from many of the financial risks involved in large construction projects. Should anything go wrong, the insurer will save the company from forking out huge sums of money. Companies such as Arthur J. Gallagher offer comprehensive policies that can be tailored to each individual project and cover the whole life cycle, from conception to completion.