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The book analyzes, compares, and contrasts tools and techniques used in risk management at corporate, strategic business and project level and develops a risk management mechanism for the sequencing of risk assessment through corporate, strategic and project stages of an investment in order to meet the requirements of the 1999 Turnbull report. By classifying and categorizing risk within these levels it is possible to drill down and roll-up to any level of the organizational structure and to establish the risks that each project is most sensitive to, so that appropriate risk response strategies may be implemented to benefit all stakeholders. \"The new edition of this book provides a clear insight into the intricacies of corporate risk management and the addition of the case study exemplars aids understanding of the management ofmultiple projects in the real world.\" — Professor Nigel Smith, Head of the School of Civil Engineering, University of Leeds

Project finance has spread worldwide and includes numerous industrial projects from power stations and waste-disposal plants to telecommunication facilities, bridges, tunnels, railway networks, and now also the building of hospitals, education facilities, government accommodation and tourist facilities. Despite financial assessment of PF projects being fundamental to the lender's decision, there is little understanding of how the use of finance is perceived by individual stakeholders; why and how a financial assessment is performed; who should be involved; where and when it should be performed; what data should be used; and how financial assessments should be presented. Current uncertainty in financial markets makes many sponsors of construction project financings carefully consider bank liquidity, the higher cost of finance, and general uncertainty for demand. This has resulted in the postponement of a number of projects in certain industry sectors. Governments have seen tax receipts drastically reduced which has affected their ability to finance infrastructure projects, often irrespective of the perceived demand. Equity providers still seek to invest, however there are less opportunities due to market dislocation. Due to the demand for global infrastructure it is believed that project financings will return to their pre-crunch levels, or more so, however lenders' liquidity costs will be passed on to the borrowers. Lenders will also be under stricter regulation both internally and externally. The steps outlined in the guide are designed to provide a basic understanding for all those involved or interested in both structuring and assessing project financings. Secondary contracts involving constructors, operators, finance providers, suppliers and offtakers can be developed and assessed to determine their commercial viability over a projects life cycle. Special Features a structured guide to assessing the commercial viability of  construction projects explains economic metrics to use in the decision making process detailed case study shows how stakeholders apply the concept of project finance

Project finance is essentially the raising of finance for a new project, secured against future revenues rather than an existing corporate balance sheet or other existing assets. The completion of the project, its successful and profitable operations, is therefore the key concern for all lenders and investors. This means that all the elements influencing the costs, revenues and returns from the project are of interest when determining the finance structure. Existing financial models were not designed to cover all these essential aspects. Analysis of the projected cash flows for the deal is therefore essential, from financial close to the end of the concession or plant life, under a range of assumptions. A case study is developed using Qatar's North Field, RasGas (Ras Laffan Liquefied Gas Company) data for this purpose. This is a multi-billion dollar company set up to develop the Gas Extracting and Utilisation Project in Qatar. The projects cannot be financed from the present country revenue, and therefore, external project financing is required. Decisions have to be made regarding the amount to be raised, acceptable securities, criteria for a Target Capital Structure for all new Gas/Oil Extraction/Utilisation Projects and other related decisions. The thesis verifies and validates a unique, innovative, specific, accurate and cost saving Comprehensive Financial Model for the oil and gas industry in Qatar, to facilitate the evaluation of new projects in the future.

The corporate level is concerned with the type of business the organization, as a whole, is in or should be in. It addresses such issues as the balance in the organization's portfolio, and strategic criteria such as contribution to profits and growth in a specific industry. Questions concerning diversification and the structure of the organization as a whole are corporate‐level issues. This chapter defines the corporation and its history, the functions of the FTSE, corporate structure, the board of directors — their functions, obligations and membership — corporate functions, corporate risk strategy and the future of corporate risk. It also highlights the power and control of the corporation, what it considers as risks, and the relationship with the rest of the company, namely the SBUs and the projects they carry out.

Within any portfolio the potential for uncertainty increases with the breadth of the portfolio and the range of the projects or investments. The level of interdependencies and interrelationships will also affect the potential for positive or negative risks. This chapter defines portfolios and outlines portfolio construction, strategy and the concept of bundling projects. It examines bundling projects and cash flows specific to portfolios. It also analyses various methods of cash flow analyses.

Many businesses today depend on project‐based activities for their growth and long‐term well‐being. Although on‐going operation is an important part of any business, it is the project elements that are usually at the cutting edge. This is why project management has emerged as an important and critical part of any going concern. Projects are unique, novel and transient endeavours undertaken to deliver business development objectives. However, the authors believe that the long term objective regardless of the project in question will always be profit. This chapter is specific to the strategic business level within an organization. This chapter outlined the history of project management and its functions. It also highlighted the importance of project management and its teams. Along with this, project risk, project managers as risks and project risk strategy are also explained.

Raising finance for projects is an important issue. Without finance the project cannot go ahead. Therefore, organizations/promoters need to determine the sources of finance available. Debt is the most used instrument to fund projects. With debt there is an interest charge on the loan. Projects worldwide have been funded partly by bonds. Equity is considered as risk capital because investors bear a higher degree of risk than other lenders. Equity ranks the lowest in terms of its claim on the assets of the project. The debt‐equity ratio assigned to a project investment is a measure of the risk in that project investment. The greater the equity issue, the greater the perceived risk. Risk management involves identifying risks! This chapter outlines the risks involved in financing projects and the different ways of managing them. It explains the advantages and disadvantages of risk modelling and describes different types of risk software.

This chapter presents a model illustrating the sequencing of risk assessment, risk management techniques and shareholder involvement at corporate, strategic business and project levels. Each level is responsible for managing the risks identified and ensuring that information on such risks is available to the other levels. In most cases risks are specific to each level. Corporate risks are typically difficult to quantify and manage. These risks include the political, legal, environmental and financial elements of an investment. Many of these risks can be assessed in greater detail at the strategic business level as more information becomes available. Project risk management often entails risks being assessed in even greater detail. To ensure that all risks at all levels are managed it is paramount that an overall risk management system is implemented and risks identified at all levels are managed over the life cycle of the investment.

Risk management involves identifying risks, predicting how probable they are and how serious they might become, deciding what to do about them, and implementing these decisions. Despite the apparent widespread uptake of risk management, the extent to which risk processes are actually applied is somewhat variable. Many organizations adopt a minimalist approach, doing only what is necessary to meet mandatory requirements, or going through the motions of a risk process with no commitment to using the results to influence current or future strategy. This chapter provides a general introduction to the topic of risk management. It summarizes the history of risk management and provides definitions of risk and uncertainty. It also describes the risk process, in terms of identification, analysis and response. The author identifies the tasks and benefits of risk management, the risk management plan and the typical stakeholders involved in an investment or project.