Contingency reservation estimation The concept of contingency is described earlier. Contingency is about uncertainties which are partly or fully under someone’s control. In project development, this is connected to investment cost estimates and associated risks. Thus, contingency reservation estimates are an integrated part of project risk management, with a clear foundation in the project development
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Contingency reservation estimation
After reading this article you will..
- Understand that the contingency is a method for risk management, and contains the “known unknows”, i.e. non-assessed cost items
- Learn that in ideal projects, contingencies are never used
- Learn that the contingencies are reduced in project development phases when amount of knowledge increases (less estimates on concept, more facts)
Business and investment planning
- Investment project fundamentals
- Business and investment planning in the forest industry
- Conceptual phase
- Pre-feasibility phase
- Feasibility phase
- Organisational learning in investment projects
Authors & references
Author:
Tom Lind
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This page has been updated 16.10.2020
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