Financial Engineering and Project Risk Management: Imperatives for Professional Quantity Surveyors

Abstract

Financial Engineering is synonymous with designing the appropriate financing strategies for a project, taking into consideration cost and impact on project risk and cost management of the project. Project risk management is a formal process that systematically identifies, analyzes and responds to risk throughout a projects lifecycle. In most developing economies, quantity surveyors shy away from their role of financial engineering, cost engineering and management of process plant projects for lack of familiarity with these concepts and methods. Thus the primary aim of this article is to provide quantity surveyors with an understanding of the tools and skills needed to meet their expanded challenge of financial engineering and risk management which are essential elements of project control and cost management in process plant projects. The paper presents an integrated framework for financing and managing risks of mega projects.

Keywords: Financial Engineering, project risks, systematic management, integrated framework.