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1. Course No. 2. Course title 3. Assignment No. 4. Date of Dispatch
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PGPM 31 Project Risk Management 1
5. Last Date of receipt : of Assignment at CODE office
ASSIGNMENT For the successful implementation of a project, it is essential is that persons involved in its implementation be sensitive to the risk involved in the project and formulate the most suitable structure for the management of such risks. There are certain variables and uncertainties are common to most of the infrastructure projects. Many risk mitigation techniques are applied to infrastructure projects. Discuss in details the risk management in construction with special reference to any project currently in progress with your company.
SYNOPSIS Introduction Risk identification in the project Types of risk Risk mitigation Risk assessment in a project o Scope of the work o Risk assessment sheet o Risk control measures Conclusion .
I have also explained the risk mitigation techniques undertaken by us to reduce the risk in the project. Money 3. In the present assignment. But as project duration decreases. Thus risk minimization is the most key role for project profit maximization by any project manager. Manpower and 4. Resources It is also a key factor to note that as the project value increases. Time 2. Thus on the successful running for a project. I have tried to assess the risks involved in the project at which I have involved in my career. the risk also increases.INTRODUCTION The project of any industry depends upon the following uncertainties 1. . optimum duration and optimum utilization of the resources are the most important to be considered. the risk also increases.
1.2 Checklists and/or Questionnaires to specialty groups Checklists/questionnaires are a quick and easy-to-use technique but limited in nature. including uncertainties and risks 1. they only deal with the items on the list.3 Examination of past similar projects – Lessons learned from past projects help us to avoid repeating mistakes. Construction 1. working together with the project team and specialists who can bring additional expertise.RISK IDENTIFICATION IN THE PROJECT Risk identification occurs through each of the two phases of project development: 1. Each project is unique.4 Combination of above methods and/or others It is quite likely that for most projects a combination of the above methods will be used to identify risks. The important thing is that once identified the risks are properly documented . Planning 2. Effort for simpler projects to a full-blown CEVP workshop and Effective brainstorming requires a skilled Facilitator. since a previous project may be similar but is nonetheless different because each new project has unique requirements and features.1 Brainstorming It is an effective method. Nonetheless a checklist/questionnaire can spark thinking prior to a more formal brainstorming process 1. hence a standard list will often not capture the project specific risks of most concern. Planning phase In the planning phase risk is been identified from one of the following methods. using past examples requires prudent and objective judgment. Brainstorming can range from a small informal project team. 1.
6. 4. Errors in pricing by the contractor. 5. including floods or excessive hot weather. are the following: 1. Unforeseen price rises in labour. materials or plant. 2. 7. Theft or damage to the works.2. 9. Design changes found necessary. Weather conditions. Design errors. or labour strikes. Construction Phase Among the most common risks encountered during the construction of a project by a civil engineering contractor under a standard type of construction contract. or materials and equipment on site. Inability to get the amount or quality of labour required. Delay or inability to obtain materials or equipment required. 8. Unforeseen physical conditions or artificial obstructions. 3. or required by the employer. quantification errors. .
Ensure the adequacy of project funding Certainly. owners need to understand. in advance. Furthermore. Pre-plans for permits. Set realistic contract performance times 5.RISK MITIGATION The following are the ten ways to mitigate risk in construction projects 1. equations & procedures 9. utilities & zoning 8. a reasonable contingency should be incorporated into the budget to deal with inevitable changes and unexpected omissions. . Use the contracting process as a risk avoidance measure The above techniques are the most commonly used to prevent the risk in any project. Obtain more geotechnical information 3. such as that provided by a termination-for-convenience clause that expressly limits or precludes recovery of anticipated but unearned profits. all parties have a legitimate concern that there will be sufficient funds to design and construct the project. Use experienced project personnel 10. Owners also need protection against the risk of running out of money. Accordingly. Conduct constructability reviews 4. that changes and cost increases are virtually inevitable. Introduced phase pricing 7. Pre-defined rates. Ensure the adequacy of project funding 2. Work & rework cost information 6.
and less likely will be claims for differing site conditions. it certainly would have increased its bid.than-complete information.• procurement of materials. There is a decided trend toward (1) investing a little more money during project planning and design for the purpose of obtaining more geotechnical information and (2) making all of the geotechnical information available to contractors.e . Either scenario is disadvantageous to the owner. subcontractors . Accordingly. i. Some owners and their counsel will argue that this open disclosure will lead to claims if the geotechnical Information is wrong. owners have been able to modify the designs and thereby make construction easier. If this is the case. if the actual underground conditions are worse than the geotechnical information provided. Owners are avoiding these problems by obtaining contractor advice and input on setting a realistic time to allow for construction of a. Even if the design is constructible the owner may have to pay more to get the same results. there may be delays and additional costs incurred in coming up with alternatives. either it will cost more to do By having the plans and specifications reviewed for "constructability " before contractors bid on them. This misses the basic point that if the bid was based on less.Obtain more geotechnical information It should go without saying that the more information a contractor has about subsurface conditions. The owner should pay because. By having the plans and specifications reviewed for "constructability" before contractors bid on them. The more accurate the bid .given project Work & rework cost information The owner can require as a contract obligation that the contractor make full disclosure of its cost estimates for all aspects of the work. Set realistic contract performance times If the contract performance time is insufficient. owners have been able to modify the designs and thereby make construction easier. that becomes the bargain. if the contractor had been advised of the more severe conditions. Conduct constructability reviews Contractors sometimes complain that the designs they are required to follow are not constructible or practical.
if these requirements are not known and considered in advance delays will result. However. utilities & zoning Given the various regulatory requirements that have to be complied with in the course of designing and constructing a project. in order to win the project.this value could be included in any cbange order carrying with it entitlement to an extension of time. equations & procedures In order to eliminate many issues from the contract administration phase. In the event of an owner-caused delay•. To avoid this astute owners and their engineers are now beginning to specifically identify permitting requirements in advance of bidding and signing the contracts Pre-defined rates. analysis and submission of progressive cost estimates. Home office overhead rates. each phase of the design can be provided to the contractor for review. Obviously contractors may talk at this intrusion into their pricing domain. pricing change orders. which would enable the contractor to be paid on a timely is for disputed work. A per diem value for extended project time. smart owners will specify clear and accurate formulae or methods to predetermine values for disputable items. the contractor will be more likely to agree to this process which in the end will reduce the likelihood for cost-overrun claims.self-performed work and even overhead and profit. it is obvious that. Pre-plans for permits. . pending negotiation of a change order modification. can be preset and a contract generally accepted manual for determining the equipment rates to be used in. although subject to wide variation within the industry. Introduced phase pricing As the design is being developed. Also give some consideration to including as a unit price. It is equally important for the contract to contain very clear provisions with respect to how change orders will be processed and what information should be included in a request for change orders. The same is true for farceaceount provisions. the owner and its staff can better assure themselves that no significant mistakes have been made in pricing . In doing so.the work and that allowances and alternatives are reasonable.
people) will still have to design.the project personnel (i. should pass up the opportunity to investigate the credentials and backgrounds of the key parties' personnel and require. Essentially.Use experienced project personnel No matter how enlightened the management and allocation of risk •. Experience counts.e. which inevitably leads to problems. Design and construction firms are often maxed out in terms of experienced project managers and superintendents. disputes and terminations. Build and adminiSter the project. define and deal with potential issues and thereby avoid disputes. the American way of doing things. whereby the parties attempt to determine what may go wrong. no design flrm or contractor wants to lose a good job. particularly for big projects With a construction boom underway. Use the contracting process as a risk avoidance measure The contract documents are an early opportunity to anticipate. No owner. in advance. what issues may arise between the parties. as a matter of contract. that only experienced project managers and superintendents will run the high-profile project.. and at least two downsides to a comprehensive contract are typically a lengthy document and sometimes lengthy negotiations. many projects are being led and managed by inadequately trained and inexperienced personnel. Notwithstanding this reality. who has the leverage in a megaproject to do so. claims. by informed and enlightened risk allocation. . and the best way to resolve these challenges. This approach is of course. the contracting process is a "what if' exercise. Consequently.
so as to increase economic growth of the nation by increasing the import & export facility.SCOPE OF THE PROJECT Name of the project Location Project definition : : : Metro Rail Project Proposal Mumbai. Project duration Type of contract Project funding Design responsibility considered Price fluctuation Extension of time Liquidated damages : : : Not allowable Not permitted 2% of the contract value per week of the project Limit upto 15% of the contract value : : : : 3765 days Item rate contract Finance arranged by the Government of India Renovation of existing structures needs to be . India The Government of India has decided the increase the infrastructure facility in India.
The type of contract is a Design Build Turnkey (DBT) where the principal contractor is required to design the underground corridor and execute the project. The underground stations are referred to as S1.K. The scope of work is the design and construction of a 6. 22 U installations& &restoration works S 5 ES: Early Start.J. 57 S 2 Mechanical / Electrical P. Phase-I of the project is about 65 kms with 59 stations.F. LS: Late Start.6 kms is about INR 18 billion.…. The contract period is about five years (exclusively for execution). S2. LF: Late Finish O 5 services . The principal contractor is a Joint Venture (JV) of three foreign contractors and two domestic contractors. 29 5 D 35 E 0 C 24 6 G. 28 M struts 0 Shotcreting & rock bolting L.H 33 0 L.6 km underground metro corridor with six underground stations and a twin tunnel system. The project cost for the execution of 6. 16 0 C 17 R 5 constructionand decks 0 Fabrication erection of steel C 69 L Rock anchor installation N. Here S6 is the terminal station equipped with an over-run tunnel (where an up train can be converted to a down train). The estimated capital cost of Phase-I is about INR 105 billion. Table 1: Major Activities and their Time Estimates in the Underground Corridor Construction Project (Terminal Station S6) Activit y A B C D E F G H I J K Descripti on Feasibility studies Design Technology selection Traffic diversion Utility diversion Survey works Shoulder / King piles Timber lagging Soil excavation Rock excavation Fabrication and erection of Immediate Duratio ES 0 1875 1875 2280 1965 2280 2755 1965 3111 2655 1965 1965 2280 2655 2110 3441 1965 2110 2280 3561 2280 EF 1875 2170 1965 2755 2280 2570 3111 2205 3411 2820 2135 2655 2565 2775 2280 3561 2110 2232 2850 3786 2505 LS 0 1985 1875 2280 1965 2821 2755 2871 3111 3276 2941 2421 3156 2871 2821 3441 2604 2749 2991 3561 3561 LF 1875 2280 1965 2755 2280 3111 3111 3111 3441 3441 3111 3111 3441 2991 2991 3561 2749 2871 3561 3786 3786 Predecesso n 1875 A 29 rs A (Days 90 5 B.Project Summary The project considered for analysis is the construction of an underground corridor for metro rail operations in the capital city of an emerging economic nation in South Asia. 22 T O 0 Backfilling N. 12 N O 5 Subfloor drainage Q 17 O R 0 Water proofing I. The project under study for this research work is a part of Phase I. The client is a public sector company floated jointly by the State and Central Government. EF: Early Finish.M 12 P 0 Diaphragm wall construction C 14 Q 0 Top down construction Q 12 R 5 Permanent structure N. S6. 47 ) C 31 E 5 B.
Define the variables as follows: Likelihood of ith risk source for jth activity Weightage of ith risk source for jth activity Impact of ith risk source for jth activity Composite Likelihood Factor for jth activity Composite Impact Factor for jth activity Base Time Estimate for jth activity Base Cost Estimate for jth activity Corrective Cost for jth activity Corrective Time for jth activity : : : : Risk Cost for jth activity Risk Time for jth activity Expected Cost for jth activity Expected Time for jth activity Lij Wij Iij CLFj CIFj BTEj BCEj CCj CTj RCj RTj ECj ETj : : : : : : : : : .M). We also assume that the critical path model network has “N” activities which are indicated by j = (1…… N) and there are “M” risk sources indicated by i = (1…. and explain. We extend the work of Roetzheim (1988) and Nicholas (2007). the concept of risk analysis by the Expected Value Method (EVM).METHODOLOGY Risk Analysis by Expected Value Method (EVM) Assume a network of deterministic time and cost. in this section..
RC and RT for an activity can be obtained from the following relationship: Risk Cost for activity j (RC)j = (CC)j x Lj for all j.Base time estimate (BTE) of the project is the estimated basic project duration determined by critical path method of the project network. Similarly. The target respondents were experts and professionals involved in and associated with the project under analysis and also other similar projects. of the identified risk sources of each activity were obtained through a questionnaire s u r v e y . …… …… (2) (3) Risk Time for activity j (RT)j = (CT)j x Lj for all j activities along the critical path. the estimated basic cost of project determined by the cost for each activity is termed as the base cost estimate (BCE). The BTE and BCE data of all the major activities of the project have been obtained as per the detailed construction drawings. The corresponding corrective time (CT) or the time required correcting an activity in case of a failure due to one or more risk sources for each activity and their corresponding corrective cost (CC) have been estimated based on the personal experiences and have been tabulated. The summation of the weightages should be equal to 1. Inconsistent responses can be modified using a second round questionnaire survey using the Delphi technique. i1 The weightages can be based on local priority (LP) where the weightages of all the subactivities of a particular activity equal 1. The mean of all the responses should desirably be considered for analysis. The next step is to compute the risk cost (RC) and risk time (RT) of the activities of the project. The likelihood of failure (Lij) defined above. M ∑ Wij = 1 for all j ( j = 1 …. The value of likelihood should range between 0 through 1. An activity may have several risk sources each having its own likelihood of occurrence. weightages can be based on global priority (GP) where the weightages of all the activities of the project equal 1. The corresponding weightage (Wij) of each activity has also been obtained from the feedback of the questionnaire survey circulated among experts. (1) The total risk time for an activity is the summation of the risk time of all the sub . Also. method statement and specifications for the works collected from the project. N) ….
This severity can also be expressed in terms of qualitative rating as “no severity” for value 0 and “extremely high severity” for value 1. i1 Risk consequence or severity can be expressed as a function of risk likelihood and risk impact. from …………(5) . Thus the numerical value will range from 0 to 1.The likelihood (Lij) of all risk sources for each activity j can be combined and expressed as a single composite likelihood factor (CLF)j. A similar computation as that of likelihood can be done for obtaining a single combined composite impact factor (CIF) by considering the weighted average as per the relationship given below: M Composite Impact Factor (CIF)j = ∑ Iij Wij i1 M 0 ≤ Iij ≤ 1 and ∑ Wij = 1 for all j.. Small values represent unimportant risks that might be ignored and large values represent important risks that need to be treated. The impact of a risk can be expressed in terms of the effect caused by the risk to the time and cost of an activity. The weightages (Wij) of the risk sources of the activities are multiplied with their respective likelihoods to obtain the CLF for the activity. The expected cost (EC)j and expected time (ET)j for each project activity and subsequently the computation of the expected project cost and time was carried out the concept of the expected value (EV) of a decision tree analysis. This time impact and cost impact can be considered as the risk time and risk cost of the activity. (6) The risk consequence derived from this equation measures how serious the risk is to project performance. The numerical value of the Risk Severity (RS) is obtained from the below mentioned relationship: Risk Consequence / Severity (RS)j = Lj x Ij for all j …. Expected value (EV) = probability of occurrence (p) [higher payoff] + (1-p) [lower payoff].
(8) Expected Time (ET)j = Lj (BTEj + CTj) + (1-Lj) BTEj = BTEj + RTj for all j. . beyond which the feasibility of the project reduces. S6 station being the terminal station. the down trains towards this station after leaving station S5 will travel through the 530m cut and cover tunnel and enter the platforms of the terminal station S6. CASE ANALYSIS The sample stretch under analysis consists of a 530 metre(m) cut and cover tunnel connecting station S5 and S6. (7) ……. These assumptions are (i) the maximum cost overrun permissible is 25 % of the basic cost estimate beyond which the project becomes less feasible and (ii) the maximum permissible time overrun for infrastructure projects is about 30% of the base time estimate. a 290m S6 station box and a 180m cut and cover over run tunnel adjoining the S6 station box. We have considered some basic assumptions during the analysis.. After the commuters vacate the train at this terminal station.Expected Cost (EC)j = Lj (BCEj + CCj) + (1-Lj) BCEj = BCEj + CCj (Lj) = BCEj + RCj for all j. = BTEj + CTj (Lj) ……. The activities of the sample stretch under analysis consist of the installation and erection of temporary supporting and retaining structures to enable construction by cut and cover technology and for the construction of permanent structures like tunnels and station boxes which are RCC single boxes / twin boxes for tunnels and RCC boxes with intermediate concourse slab for station boxes. this down train will travel through the 180m over run tunnel and will be converted into an up line train which will travel from station S6 to S1.
Table 2: Identification and Classification of Risks Involved in the Project S. Risks in timber lagging works. No. Risks in soil excavation works Risks in rock excavation works Risks in installation of construction decks Risks in installation of steel struts Risks in installation of rock anchors Risks in shotcreting and rock bolting works Risks in subfloor drainage works Risks in waterproofing works Risks in diaphragm wall construction Risks in top down construction Risks in permanent structure works Risks in mechanical and electrical installation Risks worksin backfilling and restoration works . Risk Classification Nomenclature 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 FPR PEPR 1 PEPR 2 EPR 1 EPR 2 EPR 3 EPR 4 EPR 5 EPR 6 EPR 7 EPR 8 EPR 9 EPR 10 EPR 11 EPR 12 EPR 13 EPR 14 EPR 15 EPR 16 EPR 17 EPR 18 Risk Description Feasibility Project Risk Pre execution Project Risk – Design Risks Pre execution Project Risk – Technology Risks Execution Project Risk – Risks in traffic Risks in utility diversion works diversion works Risks in survey works Risks in soldier piling and king piling works.
61076 290 49. 122 56 2026 47 As per Figure 1 which represents the critical path diagram of the entire project of the underground corridor construction.974 285 24.7961 475 21.9 tha 29.9 . 63 26.4 48 8 0.9488 120 16.0 662.46 104. 4 22.9 6 156. 33 29. 59 22.2 70.0257 240 45.392 295 n 2. 60 Million 32 10 11.9 488 0.97 162. . 382. 6 30.94 11.984 170 89.5 7 BC 5 21.6 296.367 178 389. 9 214.4 8.61 335.6 994 0. 68 984 0.7 8 0.9 464 0.88 1875 Millio Days 11. 0.6446 225 5 67.95 Milli 4 112.915 690 16.7 36 7.4102 356 4.2 59.4 176.9 392 2 0. n 6. Each activity of the project as presented in figure 1 has been analyzed at the subactivity level for computation of RC.5 2 26.319 113.6 4 23. EC. 14 26.9 961 5 0.465 15.343 63.1 323. 62 21.95 121.68 888 269.4 74 5 0.398 44.5888 315 1.9 576 7 0.306 39.464 165 42. Time (CT)j Days 1130 245 85 355 267 247 356 180 205 140 113 485 250 185 130 95 115 88 415 180 163 Risk Time (RT)j Exp Cost (EC) Exp Time (ET)j EC % her 8 tha 10.2 8 24.278 31.Application of EVM for Risk Analysis of the Project The network diagrams consisting of the major activities of the project have been drawn and their activity times (early start. 88 22. 66 35.223 92.398 71.2 915 6 0.384 36. 8 51 ET % her 20. 9 E 16.9 7 371. ET and risk severity. 13 29. 7 23.6 195 0.97 76.3 5 6 Hig Hig Days j Days 0.0 5 282.64 386.66 176.9 82.4 9 35.25 53. RT.5 244 8 0.55 933. 1 30.019 570 86.3 5 16.22 121.7 189. late start and late finish) have been calculated by forward and backward pass and then their critical path has been tracked out.354 57.8 1 2 4 18.348 393.2 88 24 0.975 122 56 108 245 49.2 4 E 15.4 5 25.7 209.5 5 384.5244 122 133. 82 33.186 45.0122 225 729.7 446 4 884.2 7 31. 97 30.202 3786 .8 4 25.345 86.27 22.48 129 151.47 3969.994 330 23.252 45.262 69. The corrective cost and time for each activity have been assumed as a certain percentage (25% to 75%) of BCE and BTE respectively depending upon the severity and casualty caused by that risk. for activity A (feasibility INR (BTE)j 20. The detailed analysis for computation of risk cost and time for all the activities of the project is presented below. 8 407. 2268.2 257 0.0 285.3 58 83.36 076 24. 0.29 195. 4670.0 4 16.2 596.3 2329 Risk Cost (RC)j Base Time Estimate Cor.377 77.3 102 0.227 19.6 4 7 0.5 7 n 25.98 97. 58 27. and Table 4.419 58. The duration along the critical path is the longest duration path and is considered as the duration of the project.2 on 2 0.1129 260 17.7 588.2 77.4 6 23. 8 23.78 77.25 66.4576 145 17. early finish.5 217. 95 29. 43 16. 6 223.356 87.28 99.66 103.7 90 3.24 INR 260.4 5 455. 91 28.5 8 141. 46 30. Table 4: Expected Cost and Time Analysis for the Project Base Cost Activity (CLF)j Estimate (BCE)j A B C D E F G H I J K L M N O P Q R S T U TOTAL INR 240 Million 110 40 50 100 10 220 20 150 80 120 300 50 80 60 120 60 80 800 300 250 3240 Corrective Cost (CC)j INR.8 BT 5 22. 11 20. The BCE and BTE of each activity and sub-activity of the project have been calculated as per the actual site data.7 317.748 170 31.
51% higher than the estimated base cost. the corrective time (CT)j is 1130 days (assumed in consultation with experts).47 ) Expected Cost (INR Million) 3969. Thus it is essential to judiciously follow the risk mitigation measures to ensure that the project is completed within the scheduled time frame. the EC of the project is 22.2 Million) Base Time Estimate 3786 (Days) Risk Time (Days 884. Risk cost (RC)j = 0.51 % higher than the BCE of the project.348 as obtained from the feedback of the questionnaire survey (refer appendix 2). Exceeding these limits would increase the chances of the project becoming less feasible. the base time estimate (BTE)j is 1875 days.88 Million. The risk management analysis predicts that the expected cost of the project is 22.36% higher than the estimated base time which is close to the upper limit of the permissible time overrun. As per the basic assumptions considered for risk management analysis the cost overrun should not exceed 25% of the estimated base cost and the time overrun should not be more than 30% of the estimated base time. the expected cost (EC)j = BCEj + RCj RTj = 2268. The ET of the project is 23.348 x 1130 days = 393. Risk time (RT)j = 0. the corrective cost (CC)j is INR 60 Million (assumed in consultation with experts).studies) the CLF is 0.36 % higher than the BTE. The base cost estimate (BCE)j for the activity feasibility studies (A) is INR 240 Million. It requires meticulous planning and proper risk mitigation measures to enhance the probability of success of the project. Thus as per equations (7) and (8).348 x 60 x 106 = INR 20. Table 5: Project Expected Cost and Time Analysis [Based on Questionnaire Survey] = INR 260. As per equations (2) and (3).24 days. The expected time predicted from the analysis is 23.88 x 106. This situation is highly alarming as it is the upper limit of the permissible cost overrun.24 days. expected time (ET)j = BTEj + Base Cost Estimat e3240 (INR Risk Cost (INR 729.47 Milion) Thus as per the analysis. .2 Expecte d Time (Days) 4670.
262 0.875 0.155 0.242 0. The product of the likelihood and impact of a risk can be considered as the severity of that risk.284 0.20 of Total Project using thehConcept of Composite Table 7: Risk Severity Analysis 1.329 0.86 0. High V.845 0.138 V.868 0.278 0.811 0.303 0.06 Mediu 0.809 0.872 0.816 0.858 0.806 0.837 0.306 0.247 0.377 0. High V.348 0.232 0.828 0.433 0. High V.544 Quantitative CLFj x CIFj 0.827 0.224 0.Risk Severity Analysis using the Concept of CLF and CIF Risk severity can be computed from equation (6).832 0.829 0. 0. 0.345 0.186 0. High High V.818 0.319 0.398 0.393 0. High Medium Severity Qualitative The risk severity analysis has also been carried out by PERT analysis and the outcome of both .335 0.863 0. High V.16 – Hig 0. High V. High V.05 w 0.784 0.181 0.305 0.27 0. High Medium V.15 m 0.343 0.223 0.513 0.341 0.03 – Lo 0. High V.00 High Likelihood Factor (CLF) and Composite Impact Factor (CIF) Composite Description of project risk (activity) Likelihood Factor (CLF)j FPR (A) PEPR 1 (B) PEPR 2 (C) EPR 1 (D) EPR 2 (E) EPR 3 (F) EPR 4 (G) PER 5 (H) PER 6 (I) EPR 7 (J) EPR 8 (K) EPR 9 (L) EPR 10 (M) EPR 11 (N) EPR 12 (O) EPR 13 (P) EPR 14 (Q) EPR 15 (R) EPR 16 (S) EPR 17 (T) EPR 18 (U) 0.342 0.28 0. High V.419 0.827 0.254 Composite Impact Factor (CIF)j 0.212 0. High V.227 0.842 0.384 0. The scale for the classification of the risk severity is expressed as Table 6: Risk Severity Classification Severity Classification 0.252 0.02– Low 0. High V.19 0. This concept can be extended for multiple risk sources in a work package.325 0.21 – V.367 0.206 0.00 – V.25 0. the likelihood and impact of which can be expressed in terms of CLFj and CIFj respectively. High V. High V. High High High V.298 0.
the EVM and PERT analysis in terms of the severity of the major activities of the project is presented in Table 8 Table 8: Outcome of Risk Severity analysis by Expected Value and PERT V.High Design Technology selection Piles King Piles Soil / Rock excavation Diaphragm wall Steel struts Rock anchors Shotcreting and rock bolting High Traffic diversion Top down lagging Mechanical & Electrical Works. Permanent Structure & Restoration Medium Survey Backfilling Low Nil Utility diversion Soldier construction Timber .
Hence this path is considered as the critical path of the project network (refer figure 1).95 Cost (Rs.98 3244.60 3074.20 150.602 = 0.07 .616 x 0.10 65.89 2504.09 108.720 x 0.88 2479.28 122.738 x 0.623 x 0.625 x 0.681 x 0. The corresponding cost for the completion of activities along this path is INR 1220 Million.19 92.67 3164.Application of Monte Carlo Simulation We apply the Monte Carlo simulation to predict the outcome of the expected time (ET) and expected cost (EC) of all the possible paths of activities as represented in the network diagram of the project (figure 1). Crores) 119.17 (days) 3785.17 87.28 96. The application of the Monte Carlo simulation to the above path analysis resulted in the following outcome: Table 9: Outcome of Path Analysis of the Project Network Diagram Applying Monte Carlo Simulation Path Path 1 2 3 4 5 6 7 8 9 Activity / Node A-B-D-G-I-P-T A-C-E-D-G-I-P-T A-C-E-F-I-P-T A-C-H-I-P-T A-C-K-P-T A-C-L-J-P-T A-C-Q-R-J-P-T A-C-Q-O-S-T A-C-Q-O-U duration 3676.040). Path A-B-D-G-I-P-T is a near critical path with a probability of about 4.88 2879. The Monte Carlo simulation also takes into account the effects of the near critical paths becoming critical. we observed that the path A-C-E-D-G-I-P-T has the longest duration of 3786 days.79 2741.11 82.8% for successful completion within the stipulated time and cost frame. It is also observed that the probability of the successful completion of the project within the stipulated time and cost frame is only 4% (0.730 x 0. There are chances of this path becoming critical. By carrying out a detailed path analysis of the project network diagram.
As a part of the formulation of risk mitigation strategies. Risk sharing Risk reduction Risk contingency planning and Risk mitigation through insurance.009. The probability of the successful completion of the near critical path or path 1 within the scheduled time is 84. the EC was found to have a value of INR 3532. The probability of the successful completion of path 2 or the critical path within the scheduled time is 50%.8413 x 0.13% (Z = 1. This model can be effectively implemented in the ongoing and upcoming metro rail projects across the nation.From the above analysis we observed that path 2 (A-C-E-D-G-I-P-T) has the longest duration of 3785.9 Million and the ET of the project was found to be 4351.8 Million. Also the probability of the successful completion of all the paths within the scheduled time is 42. .05% (P = 0.000 runs of the Monte Carlo simulation.5 x 1 x 1 x 1 x 1 x 1 x 1 x 1 = 0. P = 0.4205) Carrying out about 10. Proposed Risk Management Model for the Underground Corridor Construction for Metro Rail The generalized risk management model for the underground corridor construction for the metro rail is proposed on the basis of the detailed analysis carried out. the following risk response planning can be adapted by the project authority: (i) (ii) (iii) (iv) (v) Risk transfer.12 days. The corresponding cost for the completion of all the activities along the critical path is INR 1222.98 days and remains critical.8413).
the expected project cost for the sample stretch under analysis (530 m tunnel from station S5 to S6.CONCLUSION Project risk management which primarily comprises schedule and cost uncertainties and risks should be essentially carried out for complex urban infrastructure projects such as the construction of an underground corridor for metro rail operations. a very nominal percentage of identified risks can be insured under the existing “Contractors All Risk Policy”. This will have a direct impact on the efficiency and profitability of the organization. Thus for six underground stations for this 6. based on EVM. Hence considering the results of all the analyses carried out in this research work.51% higher than the base cost estimate of the project. According to the basic assumptions made for the analytical procedure adopted. The expected project time as obtained by the analysis is about 23. the probability of successful completion of the project within the stipulated time and cost frame will reduce.36% higher than the base time estimate of the project. and if not treated or mitigated properly. are large. Although at present. the potentiality of insurance and the means of making insurance a strong risk mitigation tool for the construction industry provide scope for future research. it can be concluded that for complex infrastructure projects like that of an underground corridor construction. based on the expert questionnaire survey. the maximum permissible time overrun as per the basic assumptions being 30% of the base time estimate. the project may result in a cost and time overrun which will ultimately reduce the feasibility of the successful completion of the project. about INR 0. Thus if proper project risk management is not carried out by the authority.6 km underground metro corridor package approximately INR 4. from the feasibility to the completion of the execution.92 Million extra per day will have to be incurred by the project authorities. In the current research work we found that the number of major and minor risks involved during the construction of the project. S6 station box and 180 m over-run tunnel) is about 22. APPENDIX 1: Additional Project Details .82 Million extra per day per station would be incurred if proper risk management is not followed to mitigate the anticipated risks. the maximum permissible cost overrun for the project is 25%. As per the analysis carried out by EVM. This value is also quite alarming making the concerned authority feel the need for carrying out proper risk management for such complex infrastructure projects.
1821 m Average depth of stations Typical width of stations Typical length of stations Design life Major Scope of Civil Engineering Works 15 .Length of route Project Detail s 6569m Description (a) Tunnel (by Tunnel Boring Machine [TBM]) .000 cum. 47.15. 3.00.3811 m (b) Tunnel (by Cut & Cover method) 937 m (c) Station boxes.20 m below ground level Average 20 m 275m to 300m 120 years for underground structures and 50 years for (a) Excavation (soil) (b) Excavation (rock) (c) Concreting (d) Reinforcement (e) Strutting : : : : : 10.000 cum.000 cum.500 MT . super structures 2.500 MT 24.90.
90 Likelihoo d 0.155 0.5 0.167 FPR 3: Pre-investment Risks Cancellation of project after bidding Delay in setting of consortium(JV) Prolonged delay in project finalization CLF = 0.80 0.90 .85 0.35 0.90 0.02 3 0.045 CIF = 0.08 Total 0.75 ) 0.121 4 Impac t 0.95 0.APPENDIX 2: Sample Questionnaire for Feasibility Project Risk (FPR) FPR 1: Feasibility Project Risk 1 – Risks in Preparation of Feasibility Report Weightag Risk Delay in submission of preliminary feasibility report Description Delay in approval for carrying out detailed feasibility study Delay in preparation and submission of detailed project report Delay in approval of DPR (DPR) CLF = 0.096 FPR 2: Resettlement and Rehabilitation Risks Resettlement site not accepted by affected parties Resettlement site very costly Litigation by affected parties Resistance and agitation by political parties CLF = 0.15 0.80 0.1 0.134 0.20 ) 0.3 0.65 (Iij 0.018 j) 0.08 5 0.04 Total 0.45 0.30 e (LP 0.027 CIF = 0.02 ) 9 0.20 0.03 5 0.03 (Wi 0 0.95 0.185 0.01 Total 0.15 (Lij 0.95 0.05 2 0.05 5 0.059 CIF = 0.35 0.
4 0.35 0.1 0.011+ 0.FPR 4: Land Acquisition Risks Risk Political interference Description Delay in finalizing temporary rehabilation schemes Public interference for changing the alignment Interference of environmental activists Delay due to interdepartmental issues Delay in construction of diversion roads for existing traffic Problems with the physical possession of land CLF = 0.2 0.027 + 0.45 0.55 0. sewer lines.4 0. electrical cables.153 CLF Feasibility = 0.80 0.875 (0. filtered and unfiltered water lines) Delay in clearance from environmental and forest departments CLF = 0.85 0.01 9 0.153) Likelihood 0.2 0.95 .75 0.070 CIF = 0.01 3 0.11 Total: 6 0.167+0.136 + 0.03 5 0.070) CIF Feasibility = 0.25 0.295 0.096 +0.05 5 0.5 0.061 FPR 6: Permit and Approval Risks Delay in contractual clearances Delay in project specific orders and approvals Delay in the approval of major utilities ( telecom cables.04 0. storm water drains.05 5 0.134 + 0.01 2 0.264 + 0.348 (0.075 0.65 Weightage 0.264 FPR 5: Financial Closure Risks Project not bankable Lenders not comfortable with project viability Adverse investment climate CLF = 0.15 0.03 0.9 0.07 9 Total:80.03 Total: 5 0.045 +0.95 0.85 0.9 0.80 0.85 0.061 + 0.059 + 0.01 40.136 CIF = 0.169 Grand Total: 1 0.011 CIF = 0.25 0.00 50.85 0.2 0.9 0.9 0.90 0.02 3 0.
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