Likelihood Likelihood
Some risks, like construction risks, were identified as of minor impact and required no further action in
this phase of the project. Moderate and major risks required more detailed analysis. The financing
structures created for implementing the project were identified as providing the greatest potential risks for
the Government.
Risk Management
An extended Risk Management schedule was developed to cover all moderate and major risks. As an
example, the extract below summarises some of the risks and risk measures considered in the
environmental planning and tender processes. For many risks, multiple responses were appropriate,
particularly when there were several parties involved.
Risk action schedules were developed for all major risks, with recommendations on implementation
covering resources, timing and monitoring. The principal measures for environmental risks, for example,
were included in a detailed Environmental Strategy Plan.
Risk Management table (extract): toll road
Environmental Planning
Delayed start to process
Delay, cancellation
Start planning early
Public consultation fails
Delay
Develop explicit management plan
Additional studies needed
Delay and additional costs
Prepare contingency plans
Appeals or challenges
Delay
May be reduced by SEPP conditions
Departmental liaison problems
Delay
Create Steering and Working
Committees
Large number of submissions
Delay, depends on number
Arrange adequate support resources
Cabinet approval delayed
Delay, cancellation
Start ministerial briefing early
Tender Process
Insufficient information provided by
tenderer
Cannot evaluate tenders
Tender cost subsidy
Clear specification requirement
Too much information provided by
tenderer
Time and cost
Limit tender period
Nominate level of information
Figure 4 Risk ranking matrix
Low
impact
High
impact
Moderate risk
Specify management
measures
Major risk
Develop Risk action
schedule
Minor risk
Accept
Moderate risk
Specify management
measures
Low
High
Risk
Consequences
Risk measures
Tenders in different formats
Difficult to compare
Include schedule for key data
Specify format for responses
Design differs from concept
Delay
Reject bid
Change tender
Negotiate to obtain conforming tender
Risk
Case #5 Tender risk assessment
Project familiarisation
The project involved demolition of an overhead roadway where significant implications for continuing use
of adjoining infrastructure arose. These implications included loss of life and disruption to major
services.
The objectives of the project were the timely and safe removal of the obsolescent roadway, at the
lowest practical cost. Tenders had been called and assessment criteria included compliance with tender
requirements, capacity to meet programming deadlines and restricted site access and procedures to
minimise adverse risk impacts.
The key elements of the project concerned the main phases of work and precautions proposed by
tenderers to address the sensitive aspects of the demolition. These included cranage provisions, removal
of debris and excess material, precautions to retain structural integrity and preparatory measures prior to
site access.
Risk analysis
As part of the tender documentation, major risks of the demolition project were identified by agency staff,
impacts assessed and likelihoods estimated. These risks included damage to adjoining infrastructure,
protracted interruption to services, failure to complete within time frame and injury to works personnel.
Reference to these factors was included within tender documentation. As part of the tender evaluation
an assessment was made of how well each tenderer addressed these factors and the risk measures
proposed. An additional measure outlined in tender submissions was also considered. An outline of the
principal risks and minimum measures is presented in the following table.
Risk Management
The selection of the preferred tenderer took into account how well the risk implications associated with
the work were addressed and any additional measures that reduced potential liabilities, within the
context of meeting time and cost constraints. Tender acceptance was made conditional on these
procedures being observed or completed during execution of the works.
Risk Management table: Tender assessment Consequences Risk measures
Work not completed to deadline
Delays to adjoining services
Additional costs
Adverse publicity
Detail preparatory work
Assured method of temporary span
holding
Establish reserve cranage capacity
for contingencies
Power lines damaged
Loss of service Additional
costs
Adequate protection of wiring
Method of work to minimise likelihood
of line interference
Damage to rail or signalling
Loss of service
Adverse publicity
Additional costs
Protection for signalling
Security of span lift
Minimisation of debris from lift
activities
Derailment due to debris on the track
Injury or loss of life
Damage to equipment
Loss of service
Plan to minimise debris
Preventive measures to exclude
debris from service easement
