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OPIM 5894ADVANCED PROJECT MANAGEMENT
California High Speed Rail – Risk Management
Team 3
http://users.business.uconn.edu/snair/opim5894.html
California High Speed Rail2
Cost Overruns Underestimating true cost of HSR rail construction compared to similar other projects (based on 2008 dollars)
Channel Tunnel Rail Link, UK - $199 million HSL Zuid, Netherlands - $133 million TGV Taiwan, Taiwan - $130 million … California HSR, US - $52 million
California High Speed Rail3
Cost Overruns Inability to start project Inability to finish project Inability to meet regulations (Assembly Bill 3034) Increase in fares by changing operating costs causing fares to creep closer to airfare costs Estimated cost at time of article: $55 billion Estimated cost as of January 2012: $98.5 billion Underestimation of project costs
Analysis of the cost of the high speed raid project in China revealed that the cost of elevated track was approximately double the cost for at-grade track and the cost of tunnels was double the cost of an elevated configuration
California High Speed Rail4
Delays Increase in price of material, labor, land, inflation leading to a budget change Lost interest from private investors Lost Federal funding for project Government policy changes (federal, state, town) Right of way tracks get used for another project instead
California High Speed Rail5
Delays Increase in price of material, labor, land, inflation leading to a budget change Lost interest from private investors Lost Federal funding for project Government policy changes (federal, state, town) Right of way tracks get used for another project instead
California High Speed Rail6
Piecemeal Funding If any funders fail to deliver, project will fail 50% of financing has to be secured before state bonds can be used Private investors not willing to commit money up front without guarantee of project start, leading to delays
California High Speed Rail7
Simulation
California High Speed Rail8
Mitigating Risk Selection of an initial operation segment as soon as possible
Focus should be on San Jose to San Francisco and Anaheim to Los Angeles due to heavy population
Involve private sector in project design Negotiate with Federal Government to relax regulations Lobbying within local governments to increase support for funding Incentives for involved parties to share profits
California High Speed Rail9
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