1 THE RELEVANCE OF DEVELOPER COSTS IN GEOTECHNICAL RISK MANAGEMENT

SUMMARY: This paper considers the motivation of developers and why they fund construction projects. It shows the proportion of costs typically spent on foundations as a proportion of whole building and whole life costs. It considers UK government guidance on optimism bias and how better geotechnical design and risk management might reduce it. From a study of sparse data, it finds that significant construction delays due to ground problems may occur some 20% of the time and illustrates that the average cost of these delays far outweighs the cost of site investigation. It uses Taleb’s “Black Swan” concept to demonstrate that ground risks can be “wildly random”. Because of this, it argues that mitigation is preferable to management by contingency.