Project Planning and Risk

Identification, Assessment &

Response Planning
Asghar Sukhaira, Qasim Umar and Rao Usman
13 Oct 2019
2 Table of Contents

 Project & Project Management

 Project Planning
 Risk Identification, Assessment & Response Planning
 Q&A
3 Project & Project Management

Project
 A project is a temporary endeavor undertaken to create a unique product,
service, or result
 Specific, Measureable, Achievable, Realistic and time oriented (SMART)
Project Management
 Project management is the application of knowledge, skills, tools, and
techniques to project activities to meet the project requirements.
 Project Life Cycle
4 Project & Project Management
5 Project Planning

 Fail to Plan . . .
and You Plan
to Fail!
6 Project Planning

 Work done to predetermine a course of action to be taken to reach the

goal / desired results
 Strategic Planning & Operational Planning
 What is planned and who should plan?
 Tools and techniques of Planning (Expert Judgment, Meetings, Precedence
Diagramming Method, Parametric & Three-Point Estimating, Critical Path
Method, Earned Value Management, Fishbone diagrams, Flowcharts &
Histograms, SWOT Analysis (strengths, weaknesses, opportunities, and
threats), Monte Carlo simulation)
 Outcome of Planning
7 Risk Identification, Assessment &
Response Planning
What is Risk?
 An uncertain event or condition that, if it occurs, has a positive or negative
effect on one or more project objectives such as scope, schedule, cost,
and quality.
 Positive and negative risks / opportunities and threats.
 Risk Management Involves:
 Risk Identification
 Risk Assessment
 Risk Response Planning
8 Risk Identification, Assessment &
Response Planning
Risk identification
 Process of determining which risks may affect the project and documenting
their characteristics.
 Identify Risks: Tools and Techniques
 Expert Judgement
 Brainstorming
 Interviewing
 Root cause analysis
 Fishbone diagrams
 SWOT Analysis
9 Risk Identification, Assessment &
Response Planning
Example :Typical Risks in Hydropower Plant Construction

 Project Site Access Risk  Construction Material Availability

 Project Capacity Optimization Risk
 Hydrological Risk
 Deficiencies in Design Risk
 Geological & Geotechnical Risk
 Seismic Risks
 Techniques Risk
 Construction Extension Risk
 Workman Quality Risk
 Work stop-Hazard/Climate
Change Risk
Risk
 Interconnection Facility Risk
 Low plant Efficiency Risk
 Tariff Indexation Risk
 Exchange Rate Risk
 Insurance Risk
 Interest risk
 Exchange Restriction Risk
 Tax Risk
10 Risk Identification, Assessment &
Response Planning
Risk Assessment

Qualitative Risk Analysis Quantitative Risk Analysis

(The process of numerically analyzing
(The process of prioritizing risks by assessing and
the effect of identified risks on overall
combining their probability of occurrence and
project objectives)
impact)

Sensitivity analysis
Risk Register

Expected monetary
Probability Impact value analysis
Assessment
Monte Carlo
Risk Categorization Simulation

Contingency cost
estimation
11 Risk Identification, Assessment &
Response Planning
Qualitative Risk Analysis / Risk Probability and Impact Matrix

For example, a Risk Level defined as C3 (M) indicates a Medium Level risk with
Consequence 3 and Likelihood C.
12 Risk Identification, Assessment &
Response Planning
Quantitative Risk Analysis / Sensitivity Analysis
13 Risk Identification, Assessment &
Response Planning
Risk Response Planning
Stop (don’t provide the product or
service)
Avoid (eliminate the Risk Factor)
Outsource (sub-contractor / sub
consultant accepts the risk)

Self Insurance (pay from pocket or with a

Accept (can the risk cost be afforded?)
deductible)

Contract (agreement says customer to

Risk

provide insurance)
Transfer (move the risk to someone else)
Insurance (Policy covers the potential
cost)

Loss Control Program (actions to reduce

risk impact)
Reduce (take steps to reduce the cost)
Technology Training (Use technology to
reduce risk)
14 Risk Identification, Assessment &
Response Planning
Example :Risk Assessment and Response Planning
Risk Mitigation
Original Risk Residual Risk
Measures

Risk Mitigation
Risk Measures
Category Hazard / Risk Scenario Potential Cause Impact
Ref. (Reduce consequence or
L C R L C R
likelihood or transfer,
avoid or accept
risk)

1 Operational Hiring of External  Poor managerial  Loss of revenue. C 3 C3  Hire experienced B 1 B1

Risk Contractors and Suppliers control.  Prolonged (M) management (L)
 Poor progress  Poor progress Construction Time  Maintain strong internal
monitoring monitoring. controls
 Non-competence of the  Hire reputable
project monitoring team consultants
 Construction Safety
Issues
Inharmonious
management among the
Client, Owner’s Engineer
and the EPC Contractor
2 Technical Risk Design Deficiencies Risk Designers unaware of  KPCL exposed to C 3 C3 An experienced Consultant A 1 A1
There are deficiencies and the requirements of redress by relevant (M) having complete (L)
shortcomings in Design Pakistani authorities knowledge of Chinese
and it does not adhere to and Chinese standards.  Project structures standards should review
required may not be safe. the designs to rectify the
standards (Pakistani &  Re‐work. deficiencies in respect of
Chinese  Increased costs. non-compliance of
standards)  Lower ROE. Chinese standards.
 Debt service
15 Q&A
16