ENG8103 Management Of Technological Risk – Analysis And Evaluation

Development of Organisational Profile

1. Selection of Engineering Project and Justification

For the purpose of analysing risk management concept and identification of various risks, an engineering project, namely, the design and construction of Sydney Opera House has been selected.

This particular project has been selected because although Sydney Opera House is considered as an architectural marvel, it faced various risks throughout the course of its construction resulting in huge delays and expenses. Hence, it is often considered as a failed project from project management perspective. Thus, this will serve as an ideal project for the analysis of risks and risk management context.

2. Risk Management Context

The risk management context is very much relevant with this project because a large number of risk events have taken place throughout the course of construction of the building. Some of the major risk events included improper estimation of budget, non-feasible design of the structure, poor management and others.

3. Five Risks and Justification

The risks are identified and justified in the following table.

Risk	Type	Analysis	Justification
Design	Positive	In order to create an architectural marvel, an unrealistic design was proposed and used	This risk is categorized as positive risk because although there was unrealistic design, it was ultimately completed resulting in an architectural marvel
Time	Negative	Very unrealistic time schedule was considered resulting in huge delay	This is one of the large scale projects that have encountered an extreme amount of delay to an unbelievable extent (Chapman 2016)
Cost	Negative	The cost of the project exceeded by 1300% of the initially estimated budget	Many organizations go bankrupt if a project exceeds budget to a huge extent like 1000%
Quality	Negative	There was serious risk impact regarding quality due to unrealistic design	Quality is an important risk factor in any project (K?r?lmaz and Erol 2017)
Technical	Negative	In addition to unrealistic design, the project had no proper planning for technical implementation	The project required better technical management plan

The treatment plans for the identified risks are as follows.

Risk	Treatment Plan
Design	A more realistic design was required considering all the factors acting on the design
Time	Time schedule could have better prepared considering complexity of the project
Cost	Cost estimation should be done based on the overall complexity of the project and not just consideration of the resource requirements
Quality	Quality standards are to be set before proceeding with the project
Technical	Technical management plan must be developed as per the requirements of the project

5.1 Other Important Risks to be considered

Some other important risks in this project that are to be considered are listed as follows.

• Incomplete design of the proposed engineering structure
• Rapid changes in scope and requirements of the project
• Changes in design abruptly
• Accelerated work in project due to time constraint
• Poor communication between team members
• Lack of sufficient skills of the team members

5.2 Conclusions

The above discussions with specific focus to the chosen engineering project show the importance of managing risks in a project. Based on the impacts of the risks on the selected project, it can be safely concluded that the impacts of risks continue to increase with the increasing complexity of the project and accelerates faster if these risks are left unattended. Hence, even if the project seems to be a success in terms of popularity or engineering perspective, the risk events result in failure of the project in the project management perspective.

A sound risk management plan is necessary especially if the project is very complex in nature and there are a large number of risks involved with it. The risk management plan should involve all types of risks, major or minor, that may occur in the project. A sound risk management plan should include the following components.

Risk Identification – This component includes the identification of all the risks associated with the project. The risks should include all the major and minor risks because even minor risks can lead to massive impacts on the project if left unattended (Gibson et al. 2016). After identification, the risks should be arranged and categorized as per their natures and types. In some complex projects, it is often very difficult to identify certain risks as they are unpredictable. For instance, during a construction project, considering all accident related risks, safety precautions are taken accordingly but due to some unpredictable disasters like natural calamities, some major risk events occur that result in disastrous consequences. Hence, in addition to the risk identification, it is also important to enhance the organizational readiness in order to respond to any risk event positively.

Analysis of Risks

Risk Quantification – This component is used to express risk in terms of specific quantities or ratings, usually probability and impact (Wang 2015). Probability refers to the chances of occurrence of the risks in the project and impact refers to the impact of the risks on the project. These are expressed in numerical values in order to quantify the risks.

Risk Mitigation Plan – This component is mainly used to develop suitable mitigation plan for the risks that have been identified (Manuj, Esper and Stank 2014). It is to be determined whether the proposed mitigation plans can completely remove the project risks or they are only temporary solutions. Based on the risk quantifications, the risk mitigation plan is to be applied in order to ensure proper steps are taken for preventing the risk events. After implementation, monitoring is done to determine whether the mitigation plan had the desired effect and the chances of risks are minimized. 

Risk management is an important requirement in any project and must be undertaken with care to ensure the risks the mitigated before the project is being executed. In this chosen project, a light rail transit system will be developed through the important areas of Canberra City. The proposal has been developed to identify the risks associated with the project as well as develop a detailed and suitable risk management plan.

1. Introduction

This proposal is about the discussion of a project and its possible risks that may arise during its course of execution and require attention of the management. For this purpose, a project has been chosen, namely the Canberra Light Rail Project (also termed as Capital Metro Project). In this project, a light rail system will be designed and built through the capital city of Australia connecting all the major parts of the city including the commercial and central districts. Due to the scale and the complexity of the project, there are a large number of risks associated with the project that may occur at any time and also make significant negative impact on the project. Hence, it is important to identify the risks associated with the project and prepare suitable mitigation plan so that these risk events are bypassed or avoided.

In this proposal, the chosen project has been analyzed for the identification of the risks associated with it and the development of appropriate risk management plan for the identified risks.

2. Organisational Profile

The organization that is in charge of conducting and managing the project is Capital Metro Agency. Capital Metro Agency or Capital Metro Agency Board is a subunit of the ACT (Australian Capital Territory) Government that mainly deals with the management and development of light and metro railways in Canberra, the capital city of Australia. Hence, this subunit works under government contracts and conducts construction, operations and maintenance of light rail and metro rail services around the city.

Evaluation of Risks

In this project, the ACT government has decided to implement a light rail network throughout the city connecting the busiest areas including commercial and industrial sectors and the transportation hubs like major bus terminals, railway stations, ferry ghats and others. Capital Metro Agency (CMA) has been given the responsibility to conduct the project as per the requirements and proposed road map for the light rail transit system. CMA has also been given the responsibility to hire a manufacturing company to design and manufacture the light rail cars that will run on the route. As a part of the project duty, CMA also needs to identify the risks associated with the project and send a report to the government including the proposed mitigation plan for the risks identified.

3.1 Feasibility of Detailed Risk Study

This proposal is mainly based on the detailed risk study of project as the organization has requested from the project management team. The organization wants a detailed report on all the risks associated with the project so that suitable measures can be taken to mitigate the risks before the project is executed as per the initial plans.

The major reasons for the proposal are as follows.

1. The first major reason for developing this proposal is to identify all the risks associated with the project. The project is of a very large scale and will be conducted for the next 4-5 years after the design phase is complete. Hence, it is evident that the project will face a lot of risks and issues throughout its course in various domains like management, design, construction and others. Thus, it is important to identify all the possible risks associated with the project.
2. The second major reason is to acknowledge the authority regarding the risks involved in the project so that the scope of the project is set accordingly. If the scope is complex in nature as well as includes a wide range of deliverables that may or may not be necessary for the main goal, the risks involved will also increase in number and intensity and the project will be more complex and hard to handle. Hence, the scope should be set after all the possible risks are identified and considered.

• The third major reason for this proposal is to assist in the development of a suitable risk management plan of the project. Based on the risks identified in the project, a suitable risk management will be developed along with an overall timeline for the implementation of the risk management plan. This timeline will be later integrated with the actual project timeline during finalization of the plan. In addition to the timeline, an overall budget will also be developed for the implementation of the risk management plan. This budget will be integrated with the final project budget during finalization of the plan.

3.2 Terms of Reference for the Proposal

The main motive of this proposal is to generate a specific and accurate idea regarding the risks that are highly possible to be encountered during the course of the light rail project. The authority has requested a document that includes all the risks associated with the project in the form of a risk management proposal. The authority also the following questions regarding the risks in the project.

• What are the risks that may occur in the project?
• What are the technical risks associated with the project?
• What are the non-technical risks associated with the project?
• How will the risks be allocated for management to a particular stakeholder in case of the specific risk events?
• Which of the risks will require serious attention?
• Which of the risks can be transferred to some other party in case it occurs?
• If a fully fledged risk management plan is implemented, how long will it take and how much will it cost?

This proposal has been developed with special focus to answering all these questions with the most accurate planning for the identification and mitigation of the risks. After the initial analysis of the risks, it has been found that there will be two major types of risks, namely the technical and non-technical (Glendon and Clarke 2015). While the technical risks are mainly related to the design and construction process of the light rail route, the non-technical risks will include further sub-categories like legal, environmental, financial, commercial and others. Hence, after identification of the risks it is important to classify them in separate categories before developing and applying suitable management strategies. The evaluation methods for each of the risks will be done separately and the roles of evaluation will be allocated to specific personnel with expertise on the specific areas of the risks. During the evaluation process, the main focus will be to identify main areas of impact that the risks will cause in the project. For instance, if the technical risks are being evaluated, the focus will be to identify how these risks will impact the technical requirements, resource requirements and financial condition of the project (Kaewunruen et al. 2016). Again, the implementation of the risk management plan should follow a specific schedule and as such, the risk management and implementation plan should be considered as a project itself whose objective is to mitigate and manage possible risks that may occur in the project.

Risk Proposal

Furthermore, based on the overall planning for the project, an estimated schedule along with the budget has been developed that will be necessary for the entire risk identification and management process. These are shown in the table below.

Task Name	Duration	Start	Finish	Predecessors	Resource Names	Cost
Risk Management and Implementation Plan for Canberra Light Rail Project	484 days	Mon 07-01-19	Thu 12-11-20			$2,441,400.00
Project Discussions and Survey	105 days	Mon 07-01-19	Fri 31-05-19			$613,400.00
Discuss with Authority Regarding the Overall Project Scope	10 days	Mon 07-01-19	Fri 18-01-19		Risk Identification Specialist, Project Manager	$62,000.00
Complete an Overall Survey of the Proposed Light Rail System	10 days	Mon 21-01-19	Fri 01-02-19	2	Risk Identification Specialist, Project Manager, Risk Management Supervisor	$92,000.00
Discuss regarding the scale of the project	10 days	Mon 04-02-19	Fri 15-02-19	3	Chief Financial Officer, Risk Identification Specialist, Project Manager, Risk Management Supervisor	$122,000.00
Determine All Requirements of the Project (Technical and Non Technical)	15 days	Mon 18-02-19	Fri 08-03-19	4	Risk Management Supervisor	$45,000.00
Analyze the feasibility of the project	10 days	Mon 11-03-19	Fri 22-03-19	5	Risk Identification Specialist, Project Manager, Risk Management Supervisor	$92,000.00
Propose a budget to the authority for undertaking risk management works	3 days	Mon 25-03-19	Wed 27-03-19	6	Chief Financial Officer	$9,000.00
Prepare a Risk Management Proposal Regarding the Possible Risks in the Project	12 days	Thu 28-03-19	Fri 12-04-19	7	Risk Management Supervisor, Risk Identification Specialist	$67,200.00
Submit the Risk Management Proposal to the Authority	3 days	Mon 15-04-19	Wed 17-04-19	8	Project Manager	$10,800.00
Receive approval from authority	10 days	Thu 18-04-19	Wed 01-05-19	9	Project Manager	$36,000.00
Contact with project sponsor for funding	3 days	Thu 02-05-19	Mon 06-05-19	10	Chief Financial Officer	$9,000.00
Show a detailed estimated expenditure report	6 days	Tue 07-05-19	Tue 14-05-19	11	Project Manager	$21,600.00
Hire Risk Management Team	5 days	Wed 15-05-19	Tue 21-05-19	12	Project Manager	$18,000.00
Prepare a Risk Management Final Proposal	4 days	Wed 22-05-19	Mon 27-05-19	13	Project Manager	$14,400.00
Approval of the Proposal	4 days	Tue 28-05-19	Fri 31-05-19	14	Project Manager	$14,400.00
Risk Identification Preparation Phase	59 days	Mon 03-06-19	Thu 22-08-19			$296,800.00
Conduct a Team Meeting with all the Risk Management Team Members	6 days	Mon 03-06-19	Mon 10-06-19	15	Risk Identification Specialist, Project Manager	$37,200.00
Discuss Project Roadmap	2 days	Tue 11-06-19	Wed 12-06-19	17	Risk Identification Specialist, Project Manager	$12,400.00
Analyze requirements and expertise necessary to identify the risks associated with the project	10 days	Thu 13-06-19	Wed 26-06-19	18	Technical Risk Manager, Project Manager	$64,000.00
Prepare an Estimated List of Resources as well as Skillsets Required	10 days	Thu 27-06-19	Wed 10-07-19	19	Technical Risk Manager, Risk Analyst	$54,000.00
Appoint Specific Personnel to Various Parts of Project based on their Expertise	5 days	Thu 11-07-19	Wed 17-07-19	20	Project Manager	$18,000.00
Allocate Roles to Team Members	4 days	Thu 18-07-19	Tue 23-07-19	21	Project Manager	$14,400.00
Specify Risk Identification Requirements	5 days	Wed 24-07-19	Tue 30-07-19	22	Project Manager	$18,000.00
Hire a Risk Analysis Expert Team	2 days	Wed 31-07-19	Thu 01-08-19			$17,600.00
Hire Team Leader	2 days	Wed 31-07-19	Thu 01-08-19	23	Project Manager	$7,200.00
Hire Other Personnel who have expertise in risk analysis	2 days	Wed 31-07-19	Thu 01-08-19	23	Risk Analyst	$5,200.00
Finalize the Analysis Team	2 days	Wed 31-07-19	Thu 01-08-19	23	Risk Analyst	$5,200.00
Hire Legal Assistant	2 days	Fri 02-08-19	Mon 05-08-19	27,25,26	Project Manager	$7,200.00
Hire Technical Personnel	3 days	Fri 02-08-19	Tue 06-08-19	25,26,27	Project Manager	$10,800.00
Prepare a Human Resource Management Plan	2 days	Wed 07-08-19	Thu 08-08-19	28,29	Project Manager	$7,200.00
Align the Plan with the Project Requirements	3 days	Fri 09-08-19	Tue 13-08-19	30	Project Manager	$10,800.00
List Down Project Requirements	2 days	Wed 14-08-19	Thu 15-08-19	31	Project Manager	$7,200.00
Allocate Roles to All Human Resources including the Different Teams	5 days	Fri 16-08-19	Thu 22-08-19	32	Project Manager	$18,000.00
Resource Procurement for Project	43 days	Fri 23-08-19	Tue 22-10-19			$198,800.00
Prepare a List of All Materials Required for Risk Identification and Management	3 days	Fri 23-08-19	Tue 27-08-19	33	Technical Risk Manager, Risk Analyst	$16,200.00
Prepare List of Technical Equipments and Non Technical Requirements	5 days	Wed 28-08-19	Tue 03-09-19	35	Technical Risk Manager, Risk Analyst	$27,000.00
Develop Resource Management Plan	4 days	Wed 04-09-19	Mon 09-09-19	36	Technical Risk Manager, Risk Analyst	$21,600.00
Consult with Authority Regarding Resource Usage	3 days	Tue 10-09-19	Thu 12-09-19	37	Risk Management Supervisor	$9,000.00
Analyze Market Prices of the Resources	2 days	Fri 13-09-19	Mon 16-09-19	38	Risk Management Supervisor	$6,000.00
Predict Price Changes for the Entire Risk Management Phase	2 days	Tue 17-09-19	Wed 18-09-19	39	Risk Management Supervisor	$6,000.00
Determine Budget Portion Required for the Resources	3 days	Thu 19-09-19	Mon 23-09-19	40	Risk Management Supervisor	$9,000.00
Recruit Procurement Manager	2 days	Tue 24-09-19	Wed 25-09-19	41	Risk Management Supervisor	$6,000.00
Provide a List of Resources Required for the Risk Management Process	2 days	Thu 26-09-19	Fri 27-09-19	42	Risk Management Supervisor	$6,000.00
Hand Over Budget for Procurement Phase by Phase	2 days	Mon 30-09-19	Tue 01-10-19	43	Risk Management Supervisor	$6,000.00
Procurement of Materials Phase by Phase	15 days	Wed 02-10-19	Tue 22-10-19	44	Resource Manager, All Resources for Project[1]	$86,000.00
Risk Identification Phase	37 days	Wed 23-10-19	Thu 12-12-19			$228,000.00
Start Preparation for Project	5 days	Wed 23-10-19	Tue 29-10-19	45	Technical Risk Manager, Non Technical Risk Manager	$28,000.00
Survey of the Entire Plan and the Route of the Project	10 days	Wed 30-10-19	Tue 12-11-19	47	Technical Risk Manager, Non Technical Risk Manager	$56,000.00
Estimation of Entire Technical Work Required in the Project	10 days	Wed 13-11-19	Tue 26-11-19	48	Technical Risk Manager, Non Technical Risk Manager	$56,000.00
Develop Work Breakdown Structure	2 days	Wed 27-11-19	Thu 28-11-19	49	Technical Risk Manager, Non Technical Risk Manager	$11,200.00
Assign the Team Members in Separate Domains of the Project	2 days	Fri 29-11-19	Mon 02-12-19	50	Technical Risk Manager, Non Technical Risk Manager	$11,200.00
Assign Leaders to Monitor the Risk Identification Process	2 days	Tue 03-12-19	Wed 04-12-19	51	Technical Risk Manager, Non Technical Risk Manager	$11,200.00
Send Instructions Regarding Identification of All Possible Risks, Major or Minor	2 days	Thu 05-12-19	Fri 06-12-19	52	Technical Risk Manager, Non Technical Risk Manager, Risk Analyst, Risk Identification Specialist	$21,600.00
Conduct Team Meeting Regarding Progress and Upcoming Plan	2 days	Mon 09-12-19	Tue 10-12-19	53	Risk Identification Specialist, Technical Risk Manager, Non Technical Risk Manager, Risk Analyst	$21,600.00
Start Working on Risk Management	2 days	Wed 11-12-19	Thu 12-12-19	54	Technical Risk Manager, Non Technical Risk Manager	$11,200.00
Project Execution Phase	155 days	Fri 13-12-19	Thu 16-07-20			$739,000.00
Classify All the Risks as per their nature and impact	5 days	Fri 13-12-19	Thu 19-12-19	55	Risk Analyst, Risk Identification Specialist, Risk Management Supervisor	$41,000.00
Prioritize the Risks	2 days	Fri 20-12-19	Mon 23-12-19	57	Risk Analyst, Risk Identification Specialist	$10,400.00
Hand Over Technical Risks to the Technical Management Team	2 days	Tue 24-12-19	Wed 25-12-19	58	Project Manager	$7,200.00
Hand Over Non Technical Risks to Various Personnel of Specific Expertise	2 days	Thu 26-12-19	Fri 27-12-19	59	Project Manager	$7,200.00
Develop a Risk Matrix for the Project	2 days	Mon 30-12-19	Tue 31-12-19	60	Non Technical Risk Manager, Technical Risk Manager	$11,200.00
Determine the Impact of the Risks on the Project	25 days	Wed 01-01-20	Tue 04-02-20	61	Non Technical Risk Manager, Technical Risk Manager	$140,000.00
Determine Suitable Management Plans for the Risks Including Additional Works and Implementations	25 days	Wed 05-02-20	Tue 10-03-20	62	Non Technical Risk Manager, Technical Risk Manager	$140,000.00
Determine the Impact of the Risk Management Plan on the Project	15 days	Wed 11-03-20	Tue 31-03-20	63	Non Technical Risk Manager, Technical Risk Manager	$84,000.00
Check the Feasibility of the Risk Management Procedures for the Project	20 days	Wed 01-04-20	Tue 28-04-20	64	Non Technical Risk Manager, Technical Risk Manager	$112,000.00
List Down Each of the Mitigation Strategies against Each of the Risks Identified	20 days	Wed 29-04-20	Tue 26-05-20	65	Project Plan Coordinator	$40,000.00
Check Whether the Mitigation Strategies are Reliable	5 days	Wed 27-05-20	Tue 02-06-20	66	Project Plan Coordinator	$10,000.00
Check whether the risks are completely mitigated or only the chances of occurrence are minimized	12 days	Wed 03-06-20	Thu 18-06-20	67	Project Plan Coordinator	$24,000.00
Finalize the Entire Risk Management Plan	5 days	Fri 19-06-20	Thu 25-06-20	68	Non Technical Risk Manager, Technical Risk Manager	$28,000.00
Develop Roll Out Strategy	10 days	Fri 26-06-20	Thu 09-07-20	69	Non Technical Risk Manager, Technical Risk Manager	$56,000.00
Develop Risk Monitoring Timeline that will start after completion of the project	3 days	Fri 10-07-20	Tue 14-07-20	70	Non Technical Risk Manager, Technical Risk Manager	$16,800.00
Finish working on risk identification and analysis	2 days	Wed 15-07-20	Thu 16-07-20	71	Non Technical Risk Manager, Technical Risk Manager	$11,200.00
Risk Review Phase	51 days	Fri 17-07-20	Fri 25-09-20			$204,600.00
Start Reviewing the Project	5 days	Fri 17-07-20	Thu 23-07-20	72	Risk Identification Specialist, Technical Risk Manager	$27,000.00
Conduct a survey regarding any residual risks	15 days	Fri 24-07-20	Thu 13-08-20	74	Risk Identification Specialist, Technical Risk Manager	$81,000.00
Report the residual risks if there are any	5 days	Fri 14-08-20	Thu 20-08-20	75	Non Technical Risk Manager	$14,000.00
Develop a Risk Report Document	2 days	Fri 21-08-20	Mon 24-08-20	76	Risk Identification Specialist, Risk Management Supervisor	$11,200.00
Include All Details of the Risk Management Project	6 days	Tue 25-08-20	Tue 01-09-20	77	Risk Management Supervisor	$18,000.00
Review the Entire Document	5 days	Wed 02-09-20	Tue 08-09-20	78	Risk Management Supervisor	$15,000.00
Use the Risk Management Document to Develop the Final Business Case of the Light Rail Project	10 days	Wed 09-09-20	Tue 22-09-20	79	Risk Management Supervisor	$30,000.00
Hand Over the Project to the Authority	3 days	Wed 23-09-20	Fri 25-09-20	80	Technical Risk Manager	$8,400.00
Project Closing Phase	34 days	Mon 28-09-20	Thu 12-11-20			$160,800.00
Project Appraisal	10 days	Mon 28-09-20	Fri 09-10-20	81	Project Manager	$36,000.00
Review the Entire Risk Management Plan	10 days	Mon 12-10-20	Fri 23-10-20	83	Project Manager	$36,000.00
Complete the Payments of the Team Members who worked in the project	5 days	Mon 26-10-20	Fri 30-10-20	84	Project Manager	$18,000.00
Stakeholder Sign Off	2 days	Mon 02-11-20	Tue 03-11-20	85	Technical Risk Manager, Project Manager, Chief Financial Officer, Non Technical Risk Manager, Project Plan Coordinator, Resource Manager, Risk Analyst, Risk Identification Specialist, Risk Management Supervisor	$49,600.00
Approval to Proceed to Project after Risks are Mitigated	5 days	Wed 04-11-20	Tue 10-11-20	86	Technical Risk Manager	$14,000.00
Final Closing of the Project	2 days	Wed 11-11-20	Thu 12-11-20	87	Project Manager	$7,200.00

Since the implementation of risk management plan is treated as a project in its own right, it is also important to develop a suitable project team that will be responsible for executing various activities in the project plan. The project team for this specific project should be as follows.

Team Member	Role in the Project
Route Designer	To identify the risks, issues and problems in the chosen route map and take suitable measures for managing the risks after receiving approval from the authority
Technical Engineer	To identify the risks associated with the structural framework and technical details of the route under development and manage the risks after receiving approval from the authority
Legal Advisor	To identify possible legal risks related to the project and take proper legal actions after receiving approval from the authority
Chief Financial Officer	To identify and address budget related risks in the project
Project Manager	To identify risks associated with the management of the entire project and take suitable measures accordingly
Non-Technical Risk Manager	To identify all other non-technical risks and take suitable measures accordingly or report to the authority to take necessary steps to mitigate the risks

This proposal, in addition to providing suitable recommendations, will also incorporate the risk management architecture that is described in the AS/NZS ISO 31000:2009 Risk Management – Principles and Guidelines. Basically, this framework is utilized in order to develop a suitable structure of risk management framework that is in turn developed from the analyzed risks in the project. All elements of the risk management plan will abide by the guidelines set by the AS/NZS ISO 31000:2009.

The main risks that have been identified in this project are listed below along with their brief descriptions.

Risk	Risk Details
Capability	This risk mainly refers to the lack of capability of the organization to undertake such a large scale project and deliver an entire light rail transit system.
Project Approval	A major risk identified is that the National Capital Authority may not approve the project after analyzing the overall budget, proposed schedule or the initial design of the route.
Delay due to Pending License and Approval	The delay in approval process and disputes regarding the timeframe of the project will result in unnecessary increase in the overall time period of the project, thus also increasing expenses.
Route Site Condition	Various parts of the selected route may not be suitable for the route development and construction due to regional contamination, presence of heritage structures, geographical features and others.
Safety	There may arise the risk of safety of the workers during construction as well as nearby residents and pedestrians passing through the construction area.
Design	Design risk may occur if the developed final design does not meet the actual requirements of the project.
Performance	The performance (services) after project implementation may not be as per the expected standard.
Commissioning and Late Delivery	Due to late delivery of the project, there may not be sufficient time for testing and commissioning before the route is opened for operations.
Cost	Due to various unforeseen incidents, accidents, improper estimation of budget usage in activities and other factors, there may be cost overruns in the project.
Scope Creep	Failing to execute the project within the limits of the scope will result in scope creep.
Interest Rates	After the project is initiated, the interest rates may increase abruptly resulting in serious cost overruns
Technology	Use of obsolete technology will reduce the functionalities of the light rail system and will also not allow future upgrades of the route
Legal	There might arise legal risks that may delay the project by a significant period of time

The risk likelihood and consequence matrix is developed as follows.

Risk	Likelihood	Consequence
Capability	Medium	Very High
Project Approval	Low	Very High
Delay due to Pending License and Approval	Medium	High
Route Site Condition	High	High
Safety	High	High
Design	Low	Medium
Performance	Low	High
Commissioning and Late Delivery	High	Medium
Cost	Very High	Very High
Scope Creep	Medium	High
Interest Rates	Low	Medium
Technology	Low	High
Legal	High	High

In addition to the categorization and classifying the risks as per their probability of occurrence and their impact on the project, they also need to be arranged on the order of priority so that a clear picture can be developed which risks will have to be treated on top priority and which not (Williams et al. 2016). For this project, the above mentioned risks are arranged in the order of priority as follows.

Risk	Priority
Cost	1
Legal	2
Safety	3
Route Site Condition	4
Capability	5
Delay due to Pending License and Approval	6
Commissioning and Late Delivery	7
Scope Creep	8
Technology	9
Project Approval	10
Design	11
Performance	12
Interest Rates	13

This priority list has only been developed to determine which risks will have to be treated with more priority than the others. However, this does not mean that the risks in the lower half of the table can be ignored. They also require suitable amount of attention and management in order to prevent any negative and unwanted impact on the project.

After analysis of the risks identified, a suitable risk management implementation plan is necessary in order to roll out the strategies that are aimed to manage and mitigate the risks of the project. As a part of the plan, the following activities will be carried out during the risk management project.

• Project survey to analyse the scale and complexity of the project
• Form risk management team
• Identify risks associated
• Develop risk management plan
• Check feasibility of the risk management plan
• Implement the risk management plan

As a part of the entire process, a number of risk management documents need to be developed. The list of the risk management documents that will be prepared are as follows.

Importance of Sound Risk Management Plan

Risk Management Proposal: This document will be prepared after all the risks associated with the project have been identified. The objective of preparing this document is to acknowledge the authority or project management team regarding the risks that may be encountered during the project and the possible measures that might be taken to mitigate the risks.

Risk Management Plan: This document is a detailed plan that is used to develop a complete plan for the implementation of the risk management measures that are to be taken to mitigate the project risks. This document includes a suitable schedule for the implementation of the management steps and also an estimated cost that may be encountered while implementing and rolling out the risk management procedures.

Risk Management Status Report: This document is developed to monitor the progress of the risk management implementation process and keeps track of schedule as well as the costs already encountered. The status report needs to be updated every week and submitted to the authority.

Final Documentation: This document is developed after the risk management procedure is complete and evaluated. The final documentation includes each and every detail of the procedure as well as the outcomes that have been reached at the end of the entire procedure.

Conclusion

This proposal is mainly based on the identification of the risks with the Canberra Light Rail Project and developing an initial plan for managing these risks. The risk management process has been considered as a project itself and has its own distinct phases like identification of risks, planning, execution and closing of the risk management process. Based on the overall scope of the project as well as the requirements, several risks have been identified that can have significant impact on the project. Based on these risks, a risk management plan has also been provided including the schedule for implementation and the estimated budget required for undertaking the process.

This risk proposal document is used to identify and file the risks that are associated with the Canberra Light Rail Project. Accordingly, in this proposal, more than 12 major and minor risks have been identified that may have some significant impact on the project. All the risks identified are both technical and non-technical and hence, both will require attention from separate domains of the risk management. The risks that have been analysed in this proposal have been selected because they have the most major impact on the project and must be managed before the project is taking shape in the execution phase. These risks will not only have major negative impact on the project activities but will also cause various other unacceptable incidents like cost overruns, significant delay of the project beyond the schedule and others. As per the initial analysis, the implementation of the proposal, i.e. the risk management plan will require 484 days for completion as well as a budget of $2,441,400. Considering the overall scale and total schedule of the project, both of these are very much reasonable. Moreover, precautions against risks must be on the top priority before the project is even started.

Canberra Light Rail Project

According to me, this proposal reflects a lot on the risks that occur in the selected industry. Since the selected project is the construction of light rail transit system, the project falls under the domain of the transportation construction and design industry. Projects in this industry have various technical and non-technical risks associated that cause project failures all around the world every year. This proposal considers all the technical and non-technical risks associated with the project and also focuses on the impacts these risks may have in this project if left unattended. Hence, this proposal is a reflection of the risks faced in this industry as well as how these risks should managed with proper planning.

For detailed investigation and study of risk identification and management, I have used two different case studies for addressing two different sets of requirements. The first case study chosen was the construction of the Sydney Opera House. From the analysis of that particular case study, I have learnt that the chances of risks occurring in a project also depend on the choices made by the organizations regarding the project requirements and deliverables. In this case study, I have learnt that the project is termed as a failure in terms of project management because a lot of risks have not been addressed and added to it the unrealistic timeline, design and other estimates mainly caused the failure of the project. Hence, it is very important to set the scope of a project within realistic attributes like objectives, schedule and cost. From the next case study of Canberra Light Rail Project, I have learnt about identification of major and minor risks for a large scale project. I considered various aspects of the selected project and identified that the risks need to be categorized into different types like technical, non-technical, financial and others before analysing them and developing mitigation plans for them. Furthermore, it is important to allocate these risks to specific personnel with expertise in the field in order to ensure the risk is managed appropriately. For instance, financial risks should be allocated to those personnel who have skills in financial management and technical risks should be allocated to the personnel with technical background. Finally, I learnt that risk assessment and management of a project must be handled at top priority before proceeding with the execution of the project.

References

Chapman, R.J., 2016. The rules of project risk management: Implementation guidelines for major projects. Routledge.

Brief Business Case

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