Project Due Diligence

1

Richard Robinson Director R2A Due Diligence Engineers

Risk Paradigms

2

BusinessSafety Project

Business Risk (Augmented SWOT)

External / Internal Factors

Opportunities

Strategy

Organisation

Strengths

Value Addeds

Threats

Weaknesses

Vulnerabilities

3

SWOT Characterisation

- - - + + +- + + +

- - + + + + +

- -

- - -

Vulnerabilities Value Addeds

Likelihood

ConsequenceDisaster Ugly Bad Good Outstanding Brilliant

- - - + + +

4

Project Due Diligence

Military intelligence approach - threats to agreed critical success factors give rise to vulnerabilities

Construction Operations & MaintenanceConcept Scope refinement

Tendering Commissioning

Project Risk Management

Project Due Diligence

Project Critical

SuccessFactors

Project Risk

With project risk, upside risk is assumed in the proposal. !

The risk analysis generally focuses on those issues which will prevent the assumed upside benefits from being achieved. That is, it is a downside risk assessment process from an assumed upside risk position.

6

Project Characterisation

- +

- -

- -

- - -

Vulnerabilities

Value Addeds

Likelihood

Consequence

Disaster Ugly Bad Good

- - -

xxx xx x

7

8

9

2.0 Credible threats

5.2 Risk profile

5.1 Residual risk profile

5.2 Contingency sums

3.0 Credible vulnerabilities

1.0 Project critical success factors

6.0 Action list

5.0 Precautions / protection / controls

4.0 Criticality review

5.1 Risk assessment

Geographic Zones

10

Risk Stages

11

Flow Chart for Project Vulnerability WorkshopProcess

12

Method

Further reviews as required from a ‘lower level top-down’ perspective.

13

Example - gas plant

Preliminary dependence diagram14

Vulnerability table

15

Show stoppers

16

17

Representative Projects

Eastlink Marina Coastal Expressway (Singapore) Tugan Bypass (Queensland) Interim Rolling Stock Procurement (X’Traps) Class ‘E’ Trams Procurement South Morang Rail Extension

Criticality, not risk

All senior decision makers assess decisions about future uncertainty initially at least, using criticality, not risk. !

NB: The minimisation of personal and electoral liability is logically prior to shareholder profits and taxpayer funds.

18

19