Risk management, economic risk of urban renewal projects from an Islamic perspective

Master's thesis in the field of economics, Islamic economy trend

February 2013

Abstract

Worn fabrics  And urban inefficiency is the areas of the city where its constituent elements, such as infrastructure, buildings, streets and accesses, have become worn out and ineffective over the past years, and its residents also suffer from numerous economic, social, cultural and physical problems. In the same direction and in order to utilize all the urban capacities, the renovation projects of worn-out urban structures have been defined, the purpose of their implementation is the sustainable growth of the city and the development of the target area and finally the revival of its physical, environmental, cultural, industrial and economic dimensions. Like other projects and executive plans, urban renewal projects also face many risks. The presence of risk in urban renovation projects has caused disruptions in the processes of project feasibility analysis, design and planning, construction and implementation, and finally the general use and exploitation of projects, so risk management of this category of projects seems necessary and essential. By reviewing the report of the implemented plans, we found that these solutions did not have the necessary efficiency and effect, and the reason for this is the low level of participation of people and residents of dilapidated structures and investors in the financing process and in different stages of the project. The low level of participation, in turn, is caused by mistrust of the officials, the prescriptiveness of the planning system, the lack of acceptance and acceptance of the people's ability to participate in the various stages of the work by the officials and planners, and finally, the lack of culture in the field of institutionalizing participation. They were introduced and then we analyzed the available solutions to manage these risks. Also, in this research, it has been tried to provide new and efficient solutions for risk management, economic risks of this category of projects. Establishing a cooperative company, obtaining minimum legal guarantees from financial partners, blocking credits and dealing with the contractor and even in some cases terminating the contract in case of delay in the completion of the project, accurate estimation of the housing price at the time of completion of the project and formulation of possible scenarios, utilizing all the social capacities available in the neighborhood in order to renovate the worn-out fabric, establishing schools for urban renewal and neighborhood management as the most important factors of reducing and Risk management, economic risks in urban renewal are the main results of this project. Key words: risk, risk management, economic risk, renovation projects. Shahri

Foreword

One of the important goals of the Islamic economic system is to increase the welfare level and establish social justice in the society. One of the ways to establish social justice is to renovate worn-out urban structures. Despite having great economic and social capacities and rich human and environmental resources, they are struggling with many social and economic problems, such as rising unemployment, low social status of residents, insecurity, poverty, low level of health, which increases the need to invest in the renovation of worn-out structures.

On the other hand, in all projects, there are a series of obstacles. There is something that interferes with the process of realizing the project's goals. These obstacles are the same problems and risks that we face during the stages of designing, compiling, and implementing and operating the project. Therefore, the process of identifying and managing the risk of this category of projects is very important. In this study, an analysis of the existing solutions to manage the risk of this category of projects has been presented and, if possible, new solutions have been introduced. For this purpose, five chapters have been prepared.

In the first two chapters, an attempt has been made to explain the background of these projects in both domestic and foreign fields, while stating the generalities of the research. At the end of the second chapter, the background of the research was presented at both internal and external levels. It should be noted that there have not been many studies in this field at the domestic level, and only one study has been conducted by Mr. Ayini, and the solutions presented by him are theoretical.It should be noted that there have not been many studies in this field at the domestic level and only one study has been conducted by Mr. Ayini, and the solutions presented by him are theoretical and not practical. In this chapter, the risk identification and risk identification methods were discussed first, then the risk components and types of risks in these projects were stated, and finally, the economic risks of this group of projects were examined. New solutions have been tried to be introduced. In the fifth chapter of the research, in addition to a review of the previous chapters, suggestions such as holding a painting competition among children, establishing a dedicated bank, insuring investment, foreign investors have been presented. Chapter 1: Introduction and general research which are vulnerable due to physical wear and tear, lack of proper access and lack of services and urban infrastructure and have low spatial, environmental and economic value (Naibi, Fehandari, 91). The process of intervention in worn-out urban tissues takes place in three ways:

a) Improvement means improving the condition of the tissue and its internal elements. In fact, improvement takes place when wear and tear

B) Renovation is done when the urban space, complex or building has a proper function, but the relative wear and tear of the physical space has reduced its efficiency and effectiveness.

C) Renovation means rebuilding. Reconstruction takes place when wear and tear has been completely established in a building, complex or urban space.

Worn fabrics have a series of characteristics and characteristics that can be used to identify the range of these fabrics, including:

The lack of strength of buildings against earthquakes

The inefficiency of existing facility networks

Inefficiency of the access network

Lack of security

Low land value

High density

According to the aforementioned characteristics, identifying and managing the risk of this category of projects is of great importance.

1-2-  Statement of the problem

Risk management is an active and proactive method that responds to if­s to give In fact, the project management raises the different ifs of each work department, examines the effects of the event and the ifs, and finally adopts a logical response in the exchange of ifs, in order to have a positive effect on the project's goals. It is clear that unforeseen events, which are called risk according to the definition; It happened during the life of the project and some of them can cause new damage to the project. Therefore, the theory of risk management is proposed as a technique against unpredictable events and control of such events. (Hossein Alipour, Jahormi, Mohibifar, 89)

Renovation projects of dilapidated structures are affected by many uncertainties, which threaten the realization of project goals, due to the high complexity, diversity of executive areas and multiple stakeholders. In this type of projects, due to the high costs and the changing environment, the functional requirements may change several times due to the dependence on restrictions and multiple stakeholders, the correct management of project risks is one of the key points. The risk of urban renovation projects has different dimensions, including: economic risk, risk of managing older customers, risk of laws and regulations, and risk of construction technology. In this research, we deal with the risk management, economic risks of these types of projects. Analysis, evaluation and control of risk. Risk management is the process of documenting the final decisions taken and identifying and applying the criteria that can be used to reduce the risk to an acceptable level. Risk: Unexpected events that are usually in the form of changes in the value of assets or liabilities.