Risk Management Cycle: Jeddah City - Essay Example

Risk Management Introduction In recent years, flooding and the risk associated with it have been rising with increasing frequency in many countries. “Recent floods in Europe have been a reminder of the threat that flooding poses to the wellbeing of European citizens. In 1995, 250, 000 people had to be evacuated in the Netherlands when extreme water levels on the Rhine threatened the dikes. Flooding in central Europe in the summer of 2002 resulted in over 100 deaths and the total economic damage estimated was in excess of £ 15 billion. These alarming events have provided renewed impetus to the development of improved policies and techniques for flood risk management across Europe. There is a growing recognition that flood risk can be mitigated making space for water through sustainable management. Management of Flood has started considering dilemmas, challenges, and problems” (Begum, et al., 2007). Vulnerability and Flood risk is increasing due to changes in land use and development in flood prone districts as a result of socio-economic demand, changes in climate and rainfall pattern, increasing frequency of extreme events (Begum, et al., 2007). Background Jeddah is the most cosmopolitan and second-largest city in Saudi Arabia and the gateway to millions of Muslims who want to go to the holy city of Makkah. Jeddah city, which is the main porter of the country’s wealth, the largest seller of oil in the world at all times, and which has paved the way for single currency in the Gulf with its emergence as the second largest bloc in the monetary world, was affected by heavy rains. The rains which lasted for no more than two days caused massive flooding. This flood caused the deaths of more than 120 citizens (al-Ahmed, 2009). To lessen the embarrassment caused by these deaths, spokesperson and media reports reduced the number of flood deaths in the first four days to less than 80 citizens. A lot Saudi Arabians are shocked and surprised at how such a disaster can happen in one of the worlds richest countries and the second biggest city in Saudi Arabia. (Abumansour, 2009) This massive flood was the strongest natural calamity that Saudi Arabia has seen in its history which is less than 100 years old. However the actual reason for destruction and death that occurred in November 2009 is the corruption in some of the sectors of the municipalities in Jeddah. More than four million citizens live in this city and the city still lacks treatment facility and a sewage system. Hundreds of bodies were found during flood rescue operations and some were registered as missing. The main street going to the Holy City was blocked with hundreds of cars floating in the water. The cars were dragged by the water that could not find a way out of the city. The sewage lake, sarcastically called the “The Musk Lake” by the residents of Jeddah can hold more than 9 million cubic metres of sewage water but the heavy rains raised water levels to dangerous levels. The civil defence department officials had to warn people and evacuate the area close to the lake (al-Ahmed, 2009). On the other hand, Jeddah’s deputy mayor for services assured that the lake dam was intact and gave an explanation that the leak from the sewage lake was normal because it was caused by the raise in water levels following the rain. “If the civil defence wanted to evacuate people in the area this is their call, from my side I can assure you the precautionary dam is intact,” Jeddah’s deputy mayor said. (Abumansour, 2009) More than 700 tanker trucks dump into the Musk Lake 50,000 cubic metres of sewage every day. Local authorities and residents have rescued hundreds of people in the Gwaizah region south of Jeddah. Angry citizens are demanding quick action from Government and punish and discipline the municipality after it announced that it was not ready and prepared for the flood and heavy rains that had caused hundreds of deaths and massive damage to property and roads. Many lawyers plan to sue the municipality and take legal action for the deaths of 105 people in the flood (Mahdi, 2009). “Relatives of the dead have reported cases to support this lawsuit, which will allege massive mismanagement of city works construction by the municipality as a key cause for the flooding” (Mahdi, 2009). Risk management cycle Any organization either in business sector or societal case or any wider environment has an element of risk attached to it. “The risk environment is constantly changing too. The project’s priorities and relative importance of risks will shift and change. Assumptions about risk have to be regularly revisited and reconsidered, for example at each end stage assessment” (GBOOGC, 2002) Risk identification The first stage of a Risk management cycle is to identify the risk and to recognize what things could go wrong and how far this will happen. One of the strategies to identify the risk is to consider previous experience (Kerzner, 2009). But for six years now Jeddah city has been suffering from flood and people have got used to it. Every year people keep an eye on the cloudy sky at this time of the year because the climate changes and schools are closed for a month as the streets and the roads are full of water, submerging homes and vehicles. Residents got over the problem of the lack of the sewage system by hiring tanker trucks. The risk involved because of floods is obvious with people complaining each time it rains. Jeddah city has been facing this risk for many years and each year the risk is increasing. But the media has failed in giving true reports. The municipality of Jeddah city also has not taken the necessary actions required and have given the same company and the same contractor that have been carrying out projects earlier, extra projects. This has not helped in solving the problem. Risk measurement Risk measurement can be done through quantitative and qualitative approaches and methods. According to Williams, Smith and Young (1998), risk measurement is the assessment of the likelihood of a potential loss. The possibility of losses happening depends on factors; level of experience, the frequency of exposure to the risk and the number of people. And this observation employs the use of desk research approach, which as implied by the term, means obtaining data primarily, and involves studying by sitting at a desk, as defined by Crouch and Housden .( 2003) This type of research is also generally referred to as secondary studies where information selected and obtained for use in support of the fundamental hypotheses, has been proved earlier and obtained from the media and newspaper journals that made an impact on this case. One must recognise the mistake made in the new district of Gwaizah, in the south of Jeddah, in breaking down the houses near the Lake after the flood by the local people. But this was not noticed and was ignored by the Municipalities of Jeddah. This shows that there was a lack of risk management. However after the foods happened and many people died there was a significant impact on the media which began to investigate the case and point out the mistakes of the many departments involved in this matter. Many questions were also raised as to how this could happen in a city where the Municipalities had budgets running to many billions and the last contract for the sewage system was worth over 4 billion. Many other questions such as who was responsible for this loss and who was going to pay them the compensations were also raised. There was fear that the Municipality may pass on the responsibility to the contractor and let him face the risks. It was felt that when Municipalities signed agreements they should measure the risk that may happen when handing over the job to an inefficient contractor and that there must be penalties for unsuccessful execution and unfinished part of the business. However, if the Government accepted the entire responsibilities for the mistakes made by Municipality it should not allow such mistakes to happen again and this is what is really needed now. The aim of risk measurement is to guarantee that errors are rare as far as possible. Risk analysis Risk analysis is the third stage of the risk management cycle and is an extension to the risk measurement and risk analysis. According to Crockford( 1991), risk can be managed in three different ways; risk could be avoided, controlled or transferred. There are many things that can be done to avoid risk that may happen such as hiring the right people to work under supervision, or do research and studies to keep an eye on the risk that may happen and to follow its development and extinction in the city in many sectors such as the increase in population, safety needs, etc. Other things to be done are watching for signs that come just before the flood and take whatever necessary action is required to first protect people first and their possessions next from the sewage lake and the flood damage, to be prepared for any action to move people easily and give them what they need such as sieves, and make a second plan in case the main roads get closed. Risk decision-making Decision-making is a job of the managers. They decide what risk they have to consider and also decide the level of involvement in each risk that might happen (Kerzner, 2009). The head of Municipalities in Jeddah city did not make the right decisions. He should have employed the right people which are a part of the HR department. The second wrong decision was made when one of the top men of the city Municipalities spoke to the media and tried to cover some facts and mistakes that had happened, even as the Prince of the city called for an investigation on the second day of the disaster to find out who was responsible for such a mess. The Prince spoke through Alarabya News and promised citizens that everyone involved will be punished and no one from the Municipalities of the city and the companies that worked on the projects could leave the country. This was a very good decision to make the people who were very angry feel that there was some justice. Risk implementation This stage comes after decision-making and deals with risk after decisions are made. In the case of Jeddah risk implementation after flood was to clear the area from people, rescue them, and find them alternative places to stay, to watch for any changes that could possibly happen specially in Gwaizah concerning the sewage lake and also to watch for the risk that might happen such as the effect of the sewage lake on people and children directly if it entered their houses or indirectly through the streets, and the environment. Risk monitoring Risk monitoring requires many things to be considered because risk can change anytime and could happen in different places. In such cases the defence forces and police have to implement short-time response. For instance roads that go to Makkah need to be open at all times but roads close to the Musk Lake were full of water and the defence forces had to be called for help.. Policy According to (Churchill and Frankiewicz 2006) once risk management tactics and policies are in place, organization needs to monitor their effectiveness and accomplish their controlling function. Mangers must make sure that employees are implementing the policies. There are policies and procedures the contractor must sign in the first place with municipalities which makes him accountable for any error that happens in the process or after and the contract must explain the policies that are standard in the entire government contract to the companies hired to provide a product, services or build a project (Churchill and Frankiewicz 2006). Risk management strategy Risk management strategy should recognize actual threats to the project and decide the actions necessary to eliminate or minimize them (Lock, 2007). The municipality should have a risk strategy to reduce the risk at least on the loss of possessions and property and not gamble with people’s lives. According to them in this case the risk was unexpected. But on the other hand many residents complain that they have lived for more than six years in this place and every year the level of the water is increasing and threatening the condition of the sewage lake. Conclusion In conclusion, risk management cycle aims to recognise the risk, measure and analyse the risk, also monitor and implement. However the possibility of risk still remains but it will be less and one will be prepared to reduce the extent of the damage to people and possessions (Begum, et al., 2007). In the case of Jeddah city, the head of the management of Municipalities was either not aware of the risk management cycle or did not implement it as it should have been. This disaster will change the way this department runs and maybe the head of management will be dismissed because of this tragedy. References 1. Ali al-Ahmed, Jeddah flood deaths shame Saudi royals, Guardian News and Media, http://www.guardian.co.uk/commentisfree/2009/dec/03/jeddah-floods-sewage-al-saud 2. Crockford, N. (1991). Risk Management. (1st ed.). London: Witherley. 3. Craig, C, Cheryl, F., 2006, Making microfinance work: managing for improved performance, Publisher International Labour Organization. 4. Dennis L, 2007, Project management, Edition 9, Publisher Gower Publishing, Ltd. 5. Great Britain. Office of Government Commerce, 2002, Management of risk: guidance for practitioners, Publisher The Stationery Office. 6. Harold, K, 2009, Project Management: A Systems Approach to Planning, Scheduling, and Controlling, Publisher John Wiley and Sons 7.Selina Begum, Marcel J. F. Stive, Jim W. Hall, 2007, Title Flood risk management in Europe: innovation in policy and practice, Volume 25 of Advances in natural and technological hazards research 8.Wael Mahdi, foreign correspondent, Worries over sewage threat in Jeddah, The National, http://www.thenational.ae/apps/pbcs.dll/article?AID=/20091201/FOREIGN/711309840/1002/RSS 9.Wael Abumansour, Tsunami of sewage threatens flood-hit Jeddah, Telegraph Media, http://www.telegraph.co.uk/expat/expatnews/6833512/Tsunami-of-sewage-threatens-flood-hit-Jeddah.html 10.Williams, C.A., Smith M.L. and Young P.C. (1998). Risk Management and Insurance, (8th ed.). London: MC Graw Hill Read More