Project Risk Management Using Analytical Hierarchy Process: Illustrative Case Study

No enterprise can run without risk exposure. Risks of different severities, categories and types abound in the world of business. Risks may pose a threat and, sometimes, an opportunity. Losses from threats vary from mild and acceptable to huge and unacceptable. Good risk management, including identification, assessment and control, is part of a good project management. People are often ambivalent and not rational in dealing with risks. Every organization should be aware of its risk universe, risk appetite, risk tolerance, and risk aversion, and should have a sound risk policy. This study involves an extensive review of available literature on project risk management and a case study to illustrate application of Analytical Hierarchy Process in analyzing risks in build-operatetransfer model of a waste water treatment project in Kuwait, which was a trend-setter for similar projects in the country, and an exemplary model for adoption worldwide.