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Managing risk in large construction
projects
David W Boss
Senior Vice PresidentMarsh Construction, Power and Utilities Practice - London
22nd March 2007
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n Risk Matrix and Risk Analysis
n Lessons learnt from other large projects
n Construction issues from a risk perspective
n Security people and physical
n Questions
Agenda
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Risk Matrix and Risk Analysis
What is a Risk Matrix ? a working document
constantly needs to be referred to
n Why is Risk Analysis necessary ?
Strategic Risk Assessment
Critical Path Analysis
n Severity of risk matrix example
n Evaluate and quantify risk transfer decisions
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Severity of Risk matrix example
Low risk - monitored at supervisory levelL
Moderate risk - appropriately monitored by middle managementM
High risk - requires attention of Managing Director / CEO and General ManagersH
Extreme risk - should be brought to the attention of Directors and continuously monitoredE
EEEHH
5 Almost
certain
EEHHM4 Likely
EEHML3 Possible
EHMLL2 Unlikely
HHMLL1 Rare
CatastrophicMajorModerateMinorInsignificantLikelihood
Consequence
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Lessons learnt from other large projects
n Ignore the Risk Matrix and Risk Analysis at your peril
n Wembley stadium
n Heathrow T5
n Brainstorm bizarre Risk Matrix items which may betotally uninsurable
n Contingency planning
n How to deal with the media
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Construction issues from a riskperspective
n Obvious risks Fire, storm, flood, aircraft
Terrorism
Fitness for purpose
Pollution
n Less obvious risks
Unforeseen ground conditions
Additional Increased Costs of Working
Availability of alternative venues
n Major challenges facing mega projects
n Examples from previous Olympic Games
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Construction issues from a riskperspective major challenges
n Rising commodity prices e.g. steeln Competition for resources and/or site access/egress (e.g.
London)
2012 Olympic Games
Thames Gateway Bridge
Possible Millennium Dome conversion Stratford City
Crossrail
n Labour shortages and/or disputes
n Cost and/or time overruns
n Equipment/technology failure/unfitness for purpose
n Appetite of capital providers for type of project/financingstructure
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Construction issues from a riskperspective previous Olympic Games
n Athens Floor at fencing venue
Lifts in athletes village
n Atlanta
Ceiling collapse
Light tower collapse
Waste disposal
Camera positions in main stadium
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Construction issues from a riskperspective previous Olympic Games
n Sydney Temporary grandstand in swimming venue
Air conditioning in athletes village
n Salt Lake
Temporary tent ventilation
n Turin
Main stadium power
Ski venue generator power Ice venue air conditioning
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Security people and physical
n People Contractor screening
Fraud detection and prevention
Cost abuse
n Physical
Security design
Site security
Terrorist exposure Blast assessment and structural evaluation
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Questions
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Disclaimer
The information contained in this presentation provides only a general
overview of subjects covered, is not intended to be taken as advice
regarding any individual situation and should not be relied upon as such.
Insureds should consult their insurance and legal advisors regarding
specific coverage issues.
Copyright 2007 Marsh Ltd All rights reserved