a)  Construction Risk

Construction risk includes anything that can cause non-completion, late completion, and cost over-runs.  Any delays in the completion of the project delays the cash flow and thus repayment of any outstanding loans.  Any cost over-runs will ultimately impact the net cash flow, which will affect a project's profitability.  As the construction period is limited to the construction phase, the risks associated with this phase of a project are relatively easy to mitigate.  For example, construction risk can be transferred to the contractor by negotiating a turnkey (ideally fixed price) construction contract.  Contracts can also include provisions for the risk of non-completion, late completion, or cost over-runs.