Thieme Hennis 1052381 16-09-2006

Table with risks
Variance risks 1 Soil conditions . 2 Availability of resources . 3 Price of materials . 4 Effectiveness of machines . Contingency risks 5 Sinking of ships with equipment . 6 . 7 . Pulling back actors Unknown technology Remarks Although extensive research is done, there still can be problems regarding the soil, not as an autonomous entity, but in relation to other factors, like technology. Because of uncertainty, at any time there can be a shortage on people, on tools, on money. Ground materials’ prices can rise significantly. The machines can be slower than expected, or the people who work with them. The most important factor in this project, besides the financial and regulatory arrangements, could suddenly be lost, or heavily damaged, when the transport does not happen as planned. The possible retreat of actors, like financial institutions, sub contractors, etc. Another possibility is the bankruptcy of a (sub)contractor. The only similar project in the past was the ‘Chunnel’. This means that there is quite little experience, thus not much technological certainty. For example, the machines to make the holes, have to be tailor-made for this project, and the criteria differ from the earlier (Chunnel) project. In such big project, involving such an organization, mistakes are made. It can be a wrong design, wrong application, wrong communication, and many more. Without the digging machines there can be little work done. These machines are not available on beforehand, because they need to be made. Not only this process is uncertain, but also the possible breakdown of the machines. Due to any external factor, like weather conditions or construction errors, the technology may not be in function anymore. The EU has a big influence on big infrastructural projects, not only regarding tendering, but also on regulatory issues. A very serious external factor, which happened just before the finishing of the project. There was much uncertainty about the cracks in the soil, causing a large accident filling the tunnel with water I ‘accidentally’ remember the news story of the reengineering of the walls of this tunnel years ago: Because of the long time driving through it, and experiencing the same landscape for such a long time, drivers tended to get bored, and some even fell asleep, causing serious accidents. The maintenance of the hydraulic systems was more intensive than expected due to wear.

8 . 9 .

Construction errors

Availability digging machines

1 Technological breakdown 0 . 1 Changing regulations (EU) 1 . 1 Fire 2 . 1 Cracks filled with water 3 . Unknowable risks 1 Boring scenery 4 .

1 5 .

Wear of hydraulic systems and screws

Three risks and their influence
Unavailability of resources (V) Especially within critical processes, the availability of resources (human and nonhuman), has direct influence on the

Unknown technology (C)

Boring scenery (U)

duration, hence the costs of the project. Last minute hired personnel and equipment will also cost significantly more those which are subject to a longer and more competitive negotiation process. The price to make tailor made machines of this size can range significantly, next to the time to make it, and the quality delivered: there are no benchmarks. On the other hand you are most likely bound to stick with the supplier of this ‘unknown’ technology, because of their newly acquired knowledge. Regarding this example, one can say that risks not only regard the project itself, but is implicitly part of the product, that exists long after the project. Costs and time delays after the project are not a rare case, and sometimes very costly.

Potential strategy to mitigate or manage these risks
Unavailability of resources (V) A possibility is to transfer risks to other parties, like sub-contractors. Sharing responsibility is a good incentive to let other companies participate in a more responsible way. Other kinds of incentives, like bonus agreements, can also mitigate this risk. This kind of risk is very hard to mitigate, but on the other hand it can be very useful. The experience of doing a project like this will enhance the value of the companies involved, they will be most likely be asked to do future similar projects. An unknown risk would not be an unknown risk if it was known: therefore mitigation is very difficult if not impossible. One could say that making simulations could prevent these kinds of discoveries after the project, but I would say that in this case it would be highly unlikely. Therefore one cannot do more than include any kind of discovery in contracts or transfer these risks to insurance companies.

Unknown technology (C)

Boring scenery (U)