Discuss about the Management Elements of Waterview Connection.
This report entails analyzing various risk management elements of Waterview Connection project. The specific elements discussed are: project context, risk identification, risk analysis and evaluation, and risk treatment.
The Waterview Connection is among the biggest and most significant infrastructure projects ever to be implemented in New Zealand. It is Auckland’s most crucial transport project for almost six decades. The project involves construction of a motorway ring route that will go round the city of Auckland. On completion, this motorway route will be the main connection between the Northwestern and Southwestern motorways (Waka Kotahi, 2011). With this project in place, the famous Western Ring Route of Auckland will not be complete.
This ambitious project is expected to unlock the potential of Auckland of becoming one of the top-class cities in the world. It will provide the city with a robust and steadfast motorway network that will ease movement of people, vehicles and goods in, out and around Auckland (Learnz, (n.d.)). The project comprises of several features. Two of the main features are the Waterview tunnels and the Great North Road Interchange. The former consists of two 2.4km-long tunnels, each with three traffic lanes. The latter consists of 4 ramps totaling 1.7km in length, which will connect Northwestern and Southwestern motorways (Fletcher Construction Company Limited, 2016).
The developer of this project is Well-Connected Alliance (WCA), which comprises of NZ Transport Agency (NZTA), Tonkin & Taylor, McConnell Dowell Constructors, Fletcher Construction, Obayashi Corporation, Beca Infrastructure and Parsons Brinkerhoff. Other sub-alliance partners include SICE NZ Ltd and Wilson Tunnelling. The decision to use an alliance was attributed to the complexity of the project. Such mega projects usually have complex issues in relation to their design works, construction works, environmental impacts and lifecycle concerns. Other stakeholders of the project are contractors and suppliers based in New Zealand and other parts of the world.
The enabling works of the project started in January 2012 while proper construction started in June 2012. The project is scheduled for completion and opening in early 2017 (Nicole Lawton, 2016). After being completed, the Well-Connected Alliance will be responsible for maintenance and management of the route for 10 years.
This mega project is estimated to cost NZ$1.4 billion (Beca, 2014). It is also estimated to have created job opportunities for about 1000 people so far. Therefore it is a mega project with significant economic impacts to people and the country as a whole.
Quality is one of the top priorities of Waterview Connection project. This is definitely a complex project and that it why it is being delivered using an alliance approach. The alliance is capable of dealing with multiple design and construction challenges associated with such projects.
As stated before the Waterview Connection project comprises of two parallel tunnels, each 2.4 long, 40m below the ground surface and 11m apart, and interchanges that will connect it to the Southwestern Motorway and Northwestern Motorway at Mt Roskill and Great North Road respectively. The total length of the project motorway will be approximately 5 km.
The project also comprises of various landscape and urban design initiatives, including upgraded parks, playgrounds, recreational facilities, sports amenities and enhanced walking and cycling connections (NZ Transport Agency, 2016). These initiatives will open up numerous opportunities for local communities (people and businesses).
Despite all these ambitious expectations on the positive impacts of the Waterview Connection projects, its associated negative impacts cannot be overlooked. Just like any other project, there must be both positive and negative impacts. The design and construction of the project is complex and possibly so is its management. The most important thing is to analyze the risks related to the design, construction and management of the project and identify their appropriate mitigation strategies. By understanding potential risks of the project, it becomes easier to identify ways of eliminating or preventing them, or reducing their effects. This project is costing the New Zealand government billions of dollars and therefore failure to manage its associated risks appropriately will have adverse effects on the entire country.
There are several risks associated with Waterview Connection project. This project is more vulnerable to risks than ordinary construction projects because it has multiple unique features, including complex processes, long duration, vigorous organizational structures, financial intensity, and fluctuating environmental conditions. These risks have direct impacts on the feasibility of the project. Inasmuch as the project has been extensively planned by Well-Connected Alliance, some of these risks are inevitable. This puts the remaining part of the project at risk of not being completed as planned. But this can be avoided if potential risks are identified, analyzed and mitigated.
The four main categories of these risks are as follows: technical risks, external risks, organizational risks, and project management risks.
These risks include design risks of any new ancillary structures along the corridor, construction risks and environmental risks. Design risks cannot be ignored because Waterview Connection project is very complex and therefore probability of making errors, no matter how small they may be, is relatively high (Nadeem et al., 2010). Even though the main design of this project has already been produced, proposal for changes or introduction of ancillary structures or facilities as the project progresses cannot be ignored. If these changes are not properly planned, they may result into substantial delay of the project. Construction risks are the risks that arise during the actual construction process (Innovation of Civil Engineers, 2016). Environmental risks are the risks caused by environmental factors that affect the project.
Considering the high innovativeness of this project, its overall technical risks are very high and therefore of great importance for analysis. Identifying and understanding technical risks will ensure that preliminary planning is done comprehensively and project scope is properly determined (Nerija and Audrius, 2012).
These risks include contractual relations risks, unavoidable events (force majeure) risks, environmental risks and social risks. Contractual relations risks are the risks that result from stakeholders’ failure to honor their commitments fully or by introducing new changes as the project continues. Force majeure risks are those caused by factors that cannot be avoided by the stakeholders and therefore nothing can be done to stop them, such as natural disasters. Environmental factors are causes that are related to environmental issues. Social risks are those caused by issues arising from the local communities. Another important group of external risks comprises of market conditions, variations in exchange rate, politics, and climate change (Yohe, 2010).
Even though most of the external risks are caused by outside factors, analyzing and understanding these risks helps stakeholders to plan on how to mitigate them. It is important because it will help stakeholders prepare in advance on how to approach relevant authorities or individuals if any of the external risks occur.
Organizational risks are those that arise from the different levels of the project’s organizational structure. It is important to explore these risks because they will enable the project team to ensure that the remaining part of the project is well planned and its scope is well defined, staffs are well experienced, an effective recruitment method is put in place to get new staffs or those to replace others who have left and project schedule is adhered to (Peter, 2010).
Project management risks are the risks resulting from issues related to how the project is being managed. These risks arises especially if management competency is low (Wang, Zou and Zhang, 2006), or if there are endless conflicts among participants (Chris and Tung, 2008).
These risks are important because they help the project management team to ensure that the project deliverables, objectives, estimates are accurately determined and planned. This will aid in reducing or avoiding things that could hinder the project’s successful completion.
Technical risks
These risks have great implication on the project’s success. It is important to note that there are some sections of the project that are yet to be done and so these technical risks cannot be ignored. In general, technical risks can be caused by the following factors: changes to original design without performing adequate and complete analysis on proposed designs; wrong estimates of contract times; improper construction methods; unavailability of needed utilities; site and worker safety; environmental risks; unfitting materials and equipment; disruptions and delayed deliveries; inadequate specialized workforce; and onsite & offsite wetlands; among others.
Considering that this project is complex, the probability and level of importance of technical risks are high and therefore their priority is also high. The team has to explore all technical risks and identify appropriate avoidance or mitigation strategies. This is the only way that the project can proceed and be completed successfully.
The risks are due to outside factors that may not have connection with the project (Bright Hub Project Management, 2012). They can be caused by changes in funding for the financial year by the federal and state governments; introduction of new stakeholders as the project progresses; changing priorities in existing project plan; stakeholders calling for late changes and extra needs; changes in project quality, objectives, scope, time and costs; economic instability; fluctuations in exchange rate; market conditions; political interference; changes in regulations of environmental and public safety.
Even though the project team has no capability to prevent these risks, understanding these risks will help the team to be prepared in advance just in case the risks occur (Zou et al., 2007). Considering that this is a national project with both national and international impacts, the probability and level of importance of external risks are also high and thus their priority is high. Therefore the risks are important in helping the team identify appropriate strategies they can apply to accept, transfer or mitigate the external risks.
These risks can be caused by: improper planning for the remaining part of the project; assigning tasks to inexperienced staff; unexpected assignment for the project manager; losing crucial employees at decisive stages of the project; changing priorities in existing project plan; and changes in the project quality, objectives, scope, time and cost.
It is worth noting that this is a very complex project that requires the highest level of competence, keenness and accuracy. Working outside project scope or assigning tasks to inexperienced workforce will have severe impacts on the project (Galorath Dan, 2008). So the probability of organizational risks in this project is high and so they have to be given a top priority.
Some of the causes of these risks include: changes that may occur to the definition of project objectives, needs, deliverables and costs; undertaking too many activities at ago; inability to control workforce priorities; inexperienced or inadequate workforce (Ibrahim Mahamid, 2013); delays by the contractors or consultants; poor communication or uncoordinated project team; and inadequate resources.
Well-Connected Alliance should understand the complex features and challenges of this project, work as a team to overcome them and ensure that the project achieves its monetary value. Therefore this project has a high probability and level of importance of project management risks and so the priority of these risks is also high. It is upon the project management team to establish suitable ways of preventing or managing these risks.
All the four categories of risks (technical risks, external risks, organizational risks and project management risks) have significant impacts on the project. Their probability and level of importance are high and so are their priority values. Therefore for the project to be completed successfully, these risks have to be treated. Risk treatment approaches that can be used include: risk avoidance strategies, risk acceptance strategies, risk transference strategies, and risk mitigation strategies (Nerija Banaitiene and Audrius Banaitis, 2012). Some of the best ways to treat the four risks are as follows:
These risks can be treated by having qualified staffs at all stages of the project; using appropriate selection methods for high quality construction materials, equipment and methods; making prudent assumptions on any issue related to the project; ensuring that suppliers commit themselves to timely deliveries; upholding the highest standards of site and worker safety through regular training and provision of safety equipment; and allocating adequate time for each activity by making an allowance for unforeseen environmental conditions.
Some of the strategies of treating these risks include: pushing for political goodwill in the country by augmenting awareness of the project benefits; collaborating with the relevant government authorities to ensure that the project budget is provided for in each financial year; developing a mechanism of integrating new stakeholders in the project; avoiding or reducing call for supplementary needs or new changes in the project; sticking to the project context and priorities from start to finish; and hiring economic specialists for recommendations on how to deal with fluctuating market conditions. These treatment approaches are appropriate because they will ensure that all risk factors for external risks have been accepted, transferred or mitigated.
One of the most challenging external risk to control is climate change (Yohe, 2010). Poor weather conditions become poor conditions because delays because most of the construction works take place outdoors. One of the ways of treating this risk is to have a flexible schedule for the project. This will ensure that when natural, unforeseen and unavoidable conditions occur, such as an earthquake, no party will be subjected to any loss or all parties will share losses using a predetermined method. Thus the schedule should allow for extension of the project in case of such occurrences.
It is known that the owner of the Waterview Connection project is NZ Transport Authority. This being a public agency, its organizational structure has a significant impact on the project’s success. Some of the ways of treating organizational risks include: defining the process of decision making so as to avoid disputes and conflicts; having an effective recruiting methodology that identifies qualified and experienced staff; and having and sticking to consistent project priorities and context.
The project management team has a critical role to play in the remaining part of the project. The following are some of the ways the team can treat project management risks: reviewing and clearly understanding defined project context; having adequate and experienced workforce; being in control of workforce priorities; ensuring accurate scheduling and estimations; ensuring that the communication system in place is effective and facilitates easy and transparent information sharing among all stakeholders; holding consultants and contractors responsible and accountable for their actions; planning to ensure that all needed resources are available on time; ensuring that there is adequate reporting throughout the project period; clearly defining the roles and responsibilities of all parties and individuals involved in the project; ensuring that documentation is done properly and consistently; ensuring that there are appropriate procedures put in place to control quality of work done; and ensuring that there is adequate staff to manage the project.
The project team has to fully support the project; prioritize the project objectives and commit all their efforts to achieving them; reviewing the project’s expectations and ensuring that they are accurate; ensuring that any conflict among the project team members is resolved quickly; putting in place mechanisms to retain all top executives of the project team; ensuring that all project inputs are of top quality; making sure that all decisions made are definite, complete and of high quality; and making sure that the project’s methodology is followed to the latter (Mar, 2016).
There is also a potential risk associated with this project after its completion. This risk is high operational and maintenance costs of the infrastructure being constructed. It has been estimated that the annual operational and maintenance costs of the project will be $16 million (Matt L., 2016). This is relatively high and may reduce the project’s investment returns. It is therefore important for the relevant stakeholders to start looking for ways on how to reduce this high cost.
Conclusion
The remaining part of Waterview Connection still has multiple risks that can hinder its successful completion. These risks include technical risks, project management risks, organizational risks and external risks. The good part is that majority of these risks can be avoided or mitigated if they are properly identified and analyzed (Protiviti, (n.d)). This is mainly the responsibility of stakeholders involved in the project.
To facilitate successful completion of the remaining part of the project, Well-Connected Alliance should get a team of highly experienced advisors, who have worked on similar projects before, and an experienced, professional independent reviewer, consultant or risk manager to assist them identify potential risks associated with the remaining part of the project. It is important to have an external perspective so as to ensure that the risk assessments done and treatments suggested are comprehensive, complete and accurate.
References
Beca. (2014). Waterview Connection. Retrieved September 23, 2016 from https://www.beca.co.nz/projects/transport/road_transport/waterview_connection.aspx
Bright Hub Project Management. (2012). Internal vs. external risks in project management. Retrieved September 23, 2016 from https://www.brighthubpm.com/risk-management/94946-internal-vs-external-risks-in-project-management/
Chris Hendrickson and Tug Au. (2008). Organization for Project Management. Retrieved from https://pmbook.ce.cmu.edu/02_Organizing_For_Project_Management.html
Fletcher Construction Company Limited. (2016). Waterview Connection. Retrieved September 23, 2016 from https://www.fletcherconstruction.co.nz/projects.php?action=search&id=467
Galorath Dan. (2008). Risk On IT Infrastructure Projects, Retrieved September 23, 2016 from <https://galorath.com/wp/risk-on-it-infrastructure-projects/>
Ibrahim Mahamid. (2013). Common risks affecting time overrun in road construction projects in Palestine: Contractors’ perspective. Australian Journal of Construction Economics and Building, 13 (2) 45-53.
Innovation of Civil Engineers. (September 8, 2016). Risk in building design and construction. Retrieved September 23, 2016 from https://www.designingbuildings.co.uk/wiki/Risk_in_building_design_and_construction
Learnz. (n.d.). More Than Just A Road. Retrieved September 23, 2016 from https://www.learnz.org.nz/waterviewconnection143/more-than-just-a-road
Mar Anna. (2016). 130 Project Risks (List). Retrieved September 23, 2016 from https://management.simplicable.com/management/new/130-project-risks
Matt L. (September 1, 2016). Waterview Mitigation Needed. Retrieved September 23, 2016 from https://transportblog.co.nz/tag/waterview-connection/
Nadeem et al. (2010). Risk Management in Construction Industry. IEEE Nerija Banaitiene and Audrius Banaitis. (2012). Risk Management in Construction Projects.
Nicole Lawton. (June 9, 2016). Auckland’s Waterview Connection on schedule to open in early 2017. Retrieved September 23, 2016 from https://www.stuff.co.nz/auckland/80912488/Aucklands-Waterview-Connection-on-schedule-to-open-in-early-2017
NZ Transport Agency. (2016). Waterview Connection. Retrieved September 23, 2016 from https://www.nzta.govt.nz/projects/the-western-ring-route/waterview-connection/
Peter G. Furst. (2010). Construction Project Risk Management. Retrieved from https://www.irmi.com/articles/expert-commentary/construction-project-risk-management
Protiviti. (n.d). Identifying and Managing Risks on Construction Projects. U.S.: Protiviti.
Waka Kotahi. (2011). Waterview Connection – going underground. Auckland: NZ Transport Agency.
Wang, Zou and Zhang, 2006 Yohe, G. (2010). Risk Assessment and Risk Management for Infrastructure Planning and Investment, National Academy of Engineering, Vol. 40, No. 3.
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