Upload
mtauqeer
View
123
Download
1
Tags:
Embed Size (px)
Citation preview
Risk Assessment For Capital Construction Projects
RAJPUT
2
OverviewDefinition of Risk
FTA Mandate
Elements of a Construction Project
Risk Assessment What does it mean for the grantee/owner Looking at the “Big Picture”
Types of Risk
Criteria for Evaluating Risk
Risk Assessment “Methods and Strategies”
Risk Assessment “Tools”
3
Overview cont…
Mitigating Risk…using Quality Management Techniques
Two Case Studies – Tren Urbano/WMATA Comparison of QA/QC Programs How Can Quality Affect Risk
Modern Day Risk Challenges SEPTA MTA-MD
Effective Risk Management Keys to Success
Recommendations
4
Project Management Oversight Program Operating Guidance No.22
Full Funding Grant Agreements (FFGA)
Fixed Guideway Modernization Projects
FTA Mandate / Guidance
5
Dear Colleague Letter
FTA Administrator, Jennifer L.Dorn – Dated – March 9, 2005
“As part of its ongoing effort to make the New Starts evaluation and
rating process as transparent as possible, FTA has revamped the format and content of the project profiles to more clearly indicate the reasons for each rating. In addition, we have included more specific information about the New Starts evaluation criteria and FTA’s rating system in the body of the report.”
Annual Report on New Starts/FY 2006 – Article (Dorn Announces Possible Changes to New Starts Process) Passenger Transport-Volume 63 No.13-Monday, March 28, 2005
6
Design Plans• Required to identify costs• Drives implementation of project
Clearly define the project and associated costs• The definition of the project is important to controlling risk• The conceptual plan must be clear (relative to potential costs and
schedule risks)
Risk Management and Mitigation Plans• Evaluate and re-evaluate risk throughout various stages of the
project• Establish key management team• Assign contingencies• Monitor and Control
Elements of a Construction Project
7
Definition:The process used to qualify the significance of a project by identifying and analyzing uncertainties and constraints in terms of the likelihood that an occurrence will happen and the probable consequences.
Risk Assessment
A Smart & Prudent Practice
PRIVATE & PUBLIC PROJECTS
NEW STARTS
DESIGN/BUILD
DESIGN - BID – BUILD
DESIGN – BUILD – OPERATE – MAINTAIN (DBOM)
TURNKEY
8
What Does Risk Assessment Mean To A Grantee/Owner?
Rejection or Approval of FFGA
Mandatory prior to executing FFGA
Provides basis for communicating level of confidence that the project can be carried out successfully, on time and within budget
What does it mean to the internal/external community?• Secretary of Transportation
• Local/State Government
• Board Members
• Funding Agency
• Community
Risk Assessment
9
Looking At The “BIG” Picture
What is the purpose of the project?
Is there a clear, consistent description of what is to be accomplished?
Is there a clear, consistent understanding of the project execution plan?
What can go wrong?
How likely is it that something will go wrong?
If something does happen, what are the consequences?
What are risks to plan for and manage?
Can we better plan and deliver a quality project?
Risk Assessment
10
Types of Risks
Real Estate Property acquisition Relocation Condemn Eminent Domain
Public Utilities Analysis & coordination Agreements Relocation
Shared Right- of-Way (ROW) Track Memorandum of Understanding
(MOU) Insurance costs/requirements
Financial
Politics Internal/external
Environmental Environmental impact studies
Historical Significance Protected Lands Archaeological Structures
Contract phasing and packaging Scope of work Bid process / Labor Integrating Construction Packages
Community impacts and public perception
Public hearing Marketing/Communication Safety & security
Material, Equipment and Construction Techniques
11
Funding• Capital cost• Operating and Maintenance (Life Cycle) costs• Financing costs• Contingencies
Schedule (the greater the number of years, the higher the risk)• Limitations• Compatible with method of construction
Ridership• Operations
Safety/Security• Project (safety and security certification)• Contractors• Laborers / Employees
Criteria for Evaluating Risk
12
Risk assessment analyses are mainly based upon:
Cost estimates (budget limitations, ‘not-to-exceed’ dollar amounts)
Design Plans
Construction and scheduling
Methods of construction available
Client/owner/grantee requirements
Examples of analytical Methods
Deterministic
Probabilistic
Risk Assessment Methods and Strategies
13
RISK ASSESSMENT TOOLS
Commercial Software Programs used in risk analysis:
@Risk
PERTMaster
Crystal Ball
Monte Carlo Project Risk Analysis Software for Primavera Project Planner (P3)
Project-specific in-house models
14
Mitigating Risk…using Quality Management Techniques…
Quality Assurance and Quality Control in transit is essential to the success of a project. There are various techniques and tools that can be used to reduce risk throughout the life cycle of a project. Establishing methodologies, plans and resources that integrate systems and processes into the risk assessment that measure, control, and balance the project needs based on the defined risk.
Let us take a look…
15
CASE STUDIES
TWO LARGE URBAN TRANSIT PROJECTS
Tren Urbano - San Juan, Puerto Rico
Washington Metropolitan Area Transit Authority (WMATA)
Comparison Of QA/QC Programs
How Can Quality Affect Risk?
16
Case Study #1
Tren UrbanoSan Juan, Puerto Rico
Rapid Rail Project: A high-capacity third rail system, with a mixture of at-grade, above grade and underground sections spanning 10-miles (17.2 km) and 16-stations with a construction value of $2.5 billion.
Project Delivery Method: Design-Build-Operate-Maintain (DBOM)
Challenge: Dealing with the complexity of managing multiple contracts and contractors tasked with the design, construction and operation of a new transit system
17
Tren Urbano
Lessons Learned:
Develop a uniform nonconformance system with identical forms, logs, tracking procedures between all contractors involved.
Reducing the number of QC firms involved would have reduced the overall complexity of the quality program and perhaps saved time or costs.
Consistent contract language would have resulted in a more integrated and consistent program that would have reduced the contract administration burden. (Each of the seven contracts included different quality specifications.)
18
Case Study #2Washington Metropolitan Area Transit Authority(WMATA), Washington, DC
Regional Metrorail System: A $9.4 billion project (first and second phase cost) completed in January 2001, after a 32-year construction effort.
Challenges: Motivate contractors to use, follow and have confidence in QA/QC plan and QA/QC staff
Project delivery method: Design-bid-build
19
Washington Metro (WMATA)
Lessons Learned:
• A QAP can be an effective tool to ensure that quality work is performed, but the key to having a successful quality control program is its integration into the work plan
• The Quality Manager should be properly trained and have experience in the industry
• The Contractor must accept the Quality Manager as an integral part of his team and implement the quality control program as part of his regime
• The Owner, Quality Manager and Contractor must work together as a team and effectively communicate so that project goals will be achieved and project risk will be minimized or eliminated.
20
A Modern Day Risk Challenge
Southeastern Pennsylvania Transportation Authority (SEPTA)Philadelphia, PA
Market Street Elevated Reconstruction Project (MSE)$567 million multi-year project to reconstruct the nearly 100 year old elevated train system located within a highly urbanized area from 46th Street Station in West Philadelphia to the Millbourne Station in Eastern Delaware County. The El is a two track, heavy rail guideway structure supported by approximately 11,000 feet of recurring structural steel bents.
Construction Plan Design Elements: A Single Column “T” Bent vs. Double Column Structure (Basic Layout); State-of-the-Art Passenger Stations; Utility Work; Operations and Maintenance. (The completed utility work will create a modern infra-structure for redeveloping the West Philadelphia corridor)
Challenge: Construction never done by SEPTA before, consisting of a system of weekend and 9-day outages (a high risk plan), managing, coordinating/integrating schedules for five construction packages.
21
SEPTA - MSEProject Risks
Construction never done by SEPTA before
Unique construction
Utility construction
Acquiring permits
Coordination of multiple contractor schedules
Environmental issues
Real estate acquisitions/relocations
Public issues
Bid protests
22
SEPTA – MSE
Additional Risks - Lessons Learned
Pre-qualification for contractors
Scheduling delays and capital budget
Contingency and schedule costs
No economic redevelopment plan for local businesses
Additional 9-day outages
23
Management Approach:
Effective Communications, early and often
Establish Action Teams for critical subjects
Ensure comprehensive stakeholder identification
Accountability - define actions and firm deadlines
Commit to a work plan that includes an integrated schedule at the start and maintain throughout
and design to it
Develop understanding that Planning Approach:
Develop staging plan in advance multiple priorities must be met and project must strike a balance
Develop understanding that construction under operation requires a different mind-set and rules
Start small with achievable goals
Build Budget Contingency into approach for risk
Provide flexibility in shutdown durations and milestones dates to give some breathing room
Steve Silva ,P.E., Director of Engineering
Middle Branch Bridge
A Modern Day Risk Challenge Maryland Transit Administration, MTA/Light Rail ,Double Track Project
24
A “Systems” approach is the key to success…
Strong and focused leadership with authority
Properly trained staff members
Skill Mix
Clearly defined tasks
Accountability
Integration of systems
Effective Risk Management
25
RECOMMENDATIONS
Establish, execute and monitor QA/QC Programs during design and construction phases
Implement FTA guidelines
Establish and maintain effective communication (across all levels)
Adhere to scope of work
Effective and continual staff training
Use forward-looking budget planning (analysis)
Summary
Capital Construction Projects can be successful when,
a comprehensive risk assessment is completed and a
risk management and mitigation plan are established.
Quality is integrated into the process throughout the
project lifecycle, thus allowing the reduction of risk
associated with cost overruns.
THANK YOU….
QUESTIONS ????
COMMENTS????