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Remediating an urban reservoir

Background

The project involved the remediation and upgrade of a reservoir consisting of several adjacent and inter-linked storages for high quality filtered drinking water. The reservoir was a vital component of the potable water distribution system for a large urban population. However, the storages were uncovered and hence they were a potential point of contamination of the water supply. They had been built many years ago, some of the electrical and mechanical components were obsolete and the whole site was in need of work.

The remediation included constructing covers for the storages, as well as upgrading electrical and control systems, inlet and outlet mains, pumps, valves, interconnecting pipes, other hydraulic structures and other aspects of the physical infrastructure.

The purpose of the work described here was to:

  • Identify and assess the risks associated with the project
  • Develop a risk management strategy
  • Prepare a Project Risk Management Plan to direct the implementation of the strategy.

Several formal risk assessments were undertaken. The first assessment took place before the design and construct (D&C) contractor had been appointed. It was followed a year later by an update assessment after the preliminary design had been completed.

Risk management

Approach

The risk management process was based on the company’s risk management framework, compatible with ISO 31000 Risk management – Principles and guidelines.

Context

Context information was obtained from a wide range of sources:

  • Existing information about this project, including business cases, previous risk assessments, design reports and value management studies
  • Post-completion reports on similar projects, particularly where problems had occurred
  • Detailed discussions with site and project personnel
  • Site visits
  • Management reviews of draft briefing materials.

The main stakeholders were the reservoir operators, the reservoir owner, water customers, the local community, and government health and environmental regulators.

Key elements were prepared to provide a structure for the risk assessment process, and they also formed an agenda for the assessment workshops. In this case the workshops were conducted in two parts, in the morning and afternoon, with different focus areas:

  • Technical, environmental performance, project management and contractual risk areas
  • Financial, economic, legal, social and other business risk areas.

Figure 1 shows the key elements for the update workshop held following the completion of the preliminary design; the first workshop used a similar but slightly shorter set. Most of the participants attended both parts of each workshop for their full duration, but there were a few individuals with specific contributions and limited availability who attended only one session. There was substantial overlap in participation between the first and update workshops, despite the extended intervening period.

Figure 1: Key elements

Context material was compiled into a comprehensive briefing note for participants in each workshop.

Workshop preparation

To enhance the effectiveness of the workshops, the briefing notes asked participants to develop their initial thoughts about potential risks to the project. In particular, they were asked to prepare:

  • Ideas about the major risks, both in their area of responsibility and for the project as a whole
  • A summary of the current controls being used to manage those risks
  • Where the risks were fairly specific, estimates of the consequences and associated likelihoods, using the scales in the company’s risk management framework.

Risk assessment workshops

The initial and update risk assessment workshops both used brainstorming, with the key elements providing a structure for the discussions. For each element, the participants:

  • Identified and confirmed the main risks
  • Identified the current controls for each risk
  • Analysed each risk in terms of its consequences, the likelihood of those consequences arising, and the maximum potential consequence if the controls were to fail
  • Nominated and agreed a risk owner for each risk.

Workshop outcomes

Over a hundred risks were identified in the initial assessment and revised in the update. The risk profile after the update workshop is shown in Figure 2. Of the key elements, construction and commissioning generated the largest number of risks, including three of the five major risks identified.

Figure 2: Risk profile

The major risks were related to:

  • Uncertainty about the condition of the existing valves and pipework, with implications for water supply if extensive remediation were required
  • Difficulties with planning and design of cut-ins to the current ‘live’ system, leading to extended outages, potential supply interruptions or the generation of flow conditions that result in poor quality water
  • Cut-in scheduling problems, possibly associated with operational incidents or restrictions, leading to project delays
  • Commissioning and early operational problems that delay project ramp-up to full capacity and lead to political embarrassment and possibly public health impacts, with a wide range of causes including skills shortages and inexperience with the new systems
  • Uncertainty about the design for handling stormwater from the roof of the reservoir, possibly affecting building and other approvals and causing delay.

When the update risk assessment was conducted a year after the first, several major risks had become minor, largely as a result of treatment actions that had been implemented successfully during the intervening year.

Risk treatment

Risk owners, identified in the risk assessment workshops, developed draft treatment plans for ‘their’ risks, using the template in Figure 3. These formed a starting point for a series of risk treatment workshops, each with its own area of focus and group of participants selected according to the subject matter.

Figure 3: Treatment plan template

Project risk management plan

The context setting, risk assessment and risk treatment activities formed the basis for the Project Risk Management Plan. The plan covered a wide range of topics, summarised in Table 1.

Table 1: Project risk management plan

Section

Description

Strategy and context

Brief statement of scope and objectives, explaining the rationale for the project and associated risk management

Reinforcement and tailoring of the company's ERM policy for this project

Context summary: stakeholders and their objectives, external and internal influences on the project

Governance

Accountabilities, roles and responsibilities for risk management through the project organisation, including contractor and supplier organisations

Interfaces and integration

Liaison, coordination, reporting links and shared responsibilities between the project, the company and the main contractors and suppliers

Interface and integration with the project execution plan and other relevant project plans

Process

How risk management is to be applied in the project, including measures and scales for risk assessment

Monitoring and review

Processes for monitoring and review to ensure that agreed actions are being implemented effectively and that the risk register and treatment plans are kept up-to-date

Assurance

Control assurance approach and activities

Reporting

Reporting requirements and timing

Plan

Actions, updates and review frequencies, information requirements for approvals and approximate timeline

Related work

Roles and responsibilities for other risk-related work, including safety, hazard studies and environmental management

Next steps

Next steps in implementing the project risk management strategy

Appendices

Major risks

Current major risks, with links to the latest risk register

Treatments

Treatment summaries for major risks, with links to detailed treatment plans

The updated risk register was included in the plan as an appendix. Both the plan and the risk register were intended to be living documents that would be updated regularly as part of routine project management processes. This had taken place successfully over the year between the initial and update assessments.

Lessons

The activities described in this case demonstrate many aspects of good project risk management.

Risk management was a continuous activity, closely linked to project management activities. The risk register and the status of treatment plans were all updated more-or-less continuously, with more formal risk assessment updates at major milestones. For example, the risk register had been maintained regularly, but the update risk assessment discussed here was undertaken as a more formal activity on completion of the preliminary design.

People with the appropriate skills, experience and expertise participated in the risk assessments. The assessment workshops were structured so that those with time constraints could participate where they were most needed and contribute usefully to the outcomes.

Formal treatment plans were developed, tracked and incorporated in project activities. Although the necessity of this might seem obvious, it does not always happen!

The project risk management plan provided a comprehensive structure and process for risk management through the life of the project. It had a strong focus on monitoring and review, to ensure that risk management was a continuing process through the project and closely integrated with regular project management activities. It was intended to be a living document that provided an up-to-date indication of the status of risks and their treatment; early indications over the first year were that it was indeed maintained, used appropriately and delivered value to the project.

Client:
Water supply authority
Sector:
Water
Services included:
Risk assessment and risk treatment
Project risk management