Specify Risk Management measures for moderate risks
Develop risk action schedules for major risks
• Actions required (what is to be done?)
• Resources (what and who?)
• Responsibilities (who?)
• Timing (when?)
Stage 5 Reporting
For designated proposals, produce the Risk Management Plan
For other projects, collate and summarise risk action schedules and measures
Stage 6 Risk Management implementation
Implement measures and action strategies
Monitor the implementation
• Assign responsibilities
• Timing
Undertake periodic review and performance evaluation
Appendix A Risk Management plan
Typical format
For designated proposals, a Risk Management plan must be prepared by agencies and submitted to
NSW Treasury and to the Budget Committee of Cabinet as part of project approval procedures. A
typical format for an RMP is presented below.
Risk Management Plan
1 Proposal familiarisation
1A Scope, issues and objectives
1B Criteria
1C Key elements
2 Risk analysis
2A List of risks
2B Table of impacts, likelihoods and risk factors
2C Priority list of major, moderate and minor risks
3 Risk Management
3A Major risks: summary of risk action schedules
3B Moderate risks: summary of management measures
3C Schedule of discarded minor risks
4 Implementation monitoring
4A Resources and responsibilities
4B Implementation monitoring plan
4C Review and evaluation plan
Appendices
Detailed risk action schedules for major risks (see Appendix C1)
Appendix B Case studies
This section provides brief summaries of case studies illustrating a range of Risk Management
applications. These have been drawn from various agency and corporate experience. They include
identified risks, estimated consequences and proposed risk measures.
Case #1 Arterial road extension
Proposal familiarisation
The project involved a dual-lane carriageway extension, with grade-separated interchange and
linkage bridgework, pedestrian and landscaping elements. Procurement was to be on the basis of a
design, construct and maintenance tender, supported by Agency financing.
The objectives of the project were to achieve functional and cost effective outcomes, encourage
innovation, provide for substantial private sector involvement, and trial a new procurement strategy.
Assessment criteria for the procurement included compliance with design specifications and
valueadded innovations.
The key elements of the procurement were the sixteen stages of the project from concept
development, through community consultation and briefing to construction, operation and
maintenance of the road.
Risk analysis
Risks were identified on behalf of the client by drawing on a systematic consideration of the key
elements from concept development through to post-completion reviews and maintenance operation
in workshop forums. The workshops involved multi-disciplinary teams reflecting a breadth of
experience. Risks included aspects of the new procurement approach and the availability of suitable
tenderers, oversight of design development and delineation of maintenance responsibilities.
Likelihoods and consequences were estimated for each significant risk. Consequences ranged from
additional cost or time penalties to impacts on project viability.
Risk Management
Risk measures were set out as remedial activities either to be undertaken by the contractor or agency.
They included procedural arrangements, contract provisions or revised procurement conditions. They
are set out against the individual risks in the table below.
Risk Management table: Arterial road extension
Industry does not respond to
procurement strategy
No responses received to Expressions Alter the conditions and/or documents.
of Interest/tender
Substantially higher costs than
anticipated
Non-conforming bids are offered
Industry consultation
Invite responses from selected
contractors
Revise/discard procurement concept
No legal precedents exist for new
conditions of contract
Time and cost of legal disputes
Use proven conditions of contract
Nominate alternative dispute
resolution methods
Difficult to price maintenance
component because scope of the
maintenance task is not known (eg
axle loads may vary and increase
maintenance demands)
High tender costs
Insure against the unknowns in the
maintenance period
Provide for traffic volume adjustment
across the maintenance period
Nominate risks to be addressed by
contractor
Utilities not completely identified
Cost (repairs and/or relocation).
Geometrical constraint
Review concept
Conduct utility survey of site/areas
Hold discussions with utility authorities
Geotechnical status of the site is
unknown
Cost increase
Remediation delays
Investigate sub surface conditions
Advise tenderers of history of site
Current environmental standards
change
Cost
Project viability affected
Review/monitor environmental
standards
Environmental review process too
narrow
Project viability affected
Time and/or cost impacts of required
design changes
Oversights in the Environmental Review
may necessitate the process being
repeated
Community resistance to concept
Review concept design changes
Conduct an EIS
Form and liaise regularly with a
community committee
Risk
Consequences
Risk measures
