Project Risk, Finance and Monitoring

This document provides a comprehensive overview of a project on risk, finance, and monitoring. It includes information on the overall budget, social and economic rationale, key statistics, funding mechanisms, key stakeholders, risk analysis, and a risk mitigation plan. The project focuses on the construction of the North-East Link in Melbourne and its impact on the environment and society.

Running Head: PROJECT RISK, FINANCE AND MONITORING
MBA643: Project Risk, Finance and Monitoring
Name of the Student
Name of the University

1PROJECT RISK, FINANCE AND MONITORING
Table of Contents
Part A: Project Overview.................................................................................................................2
A1. Overall Budget for the Project..............................................................................................2
A2. Social and Economic Rationale............................................................................................2
A3. Key Statistics........................................................................................................................2
A3.1 Scope and Size................................................................................................................2
A3.2 Budget and Estimated Cost.............................................................................................3
A3.3 Time Required to Complete the Project.........................................................................3
A3.4 Key Construction Elements............................................................................................3
A3.5 Environmental Costs or Benefits....................................................................................5
A4. Funding Mechanisms............................................................................................................5
A5. Key Stakeholders..................................................................................................................5
Part B: Risk Analysis.......................................................................................................................6
Part C: Risk Mitigation Plan..........................................................................................................11
References......................................................................................................................................15

2PROJECT RISK, FINANCE AND MONITORING
Part A: Project Overview
A1. Overall Budget for the Project
The overall budget for the project is not completely finalized but it has been estimated
that the project will cost between $5 and $10 billion.
A2. Social and Economic Rationale
This project is set to benefit the urban growth of the city of Melbourne. It has always
been considered that the North end and the East end are not sufficiently connected together with
a high speed network and as a result, there are extreme traffic blockages during the rush hours.
For years, the Australian daily passengers residing in Melbourne have been demanding a new
network that would connect the northern and eastern parts of the main city as well as its outskirts
(Li 2016). The new proposed high speed road network will definitely solve this issue and will
significantly reduce the traffic on the normal roads. Moreover, the current roads are extremely
old and often require high amount of maintenance costs due to frequent damages caused by over-
pressure of regular traffic. The new high speed network will not only reduce the pressure on
these roads but also generate a source of income through toll booths.
A3. Key Statistics
A3.1 Scope and Size
The scope of the project is to construct the North-East Link for the city of Melbourne.
The North-East Link will also consist of the following components.
i. Northern Section (M80 to Lower Plenty Road)

3PROJECT RISK, FINANCE AND MONITORING
ii. Southern Section (Tunnel to Bulleen Road)
iii. Eastern Freeway (Upgrades and Further Development)
The project is of a very large scale spanning a time period of around 7-8 years. As per the
initial dates estimated, the construction work will start in 2020 and will be completed and open
for traffic by 2027-28.
A3.2 Budget and Estimated Cost
While the final budget has not been fixed yet, the project is expected to cost at $10bn.
However, with additional costs and risk management procedures, the total estimated cost of the
project is expected to rise to $15bn.
A3.3 Time Required to Complete the Project
The estimated time required for the project is 7 years starting from 2020. It is expected
that the link will be opened for traffic by 2027 or early 2028.
A3.4 Key Construction Elements
As per the plan, there are three main segments in the entire link – the northern section,
the southern section and the eastern freeway. The key construction elements in each section are
specified as follows.
Northern Section – The main construction elements of this section are as follows.
M80 Interchange: In this part, the North East Link will start with an interchange that will
connect M80 Ring Road and Greensborough Bypass with the Link. New cycling and walking
paths and bridges will also be built along the path.

4PROJECT RISK, FINANCE AND MONITORING
Grimshaw Street: The North East Link will be built under the Grimshaw Street for
through traffic and for the traffic wanting to enter Grimshaw Street from the Link, interchanges
will be constructed as well.
Watsonia Station and Shops: The North East Link will be developed in this part in such a
way that it is well linked with the Watsonia Station, shops and bus depots that can be easily
accessed by the passengers coming through the Link.
Greensborough Road: At this section, the Link will enter into a 12 m deep trench
adjacent to the Greensborough Road for through traffic. In addition, the Link will also be
connected to Greensborough Road through green path where walkways and various shops can
also be set up.
Lower Plenty Road Interchange and Tunnel Entrance: At this section, Victoria’s longest
twin road tunnels will start at Blamey Road. Walking and cycling path along the route will also
be constructed.
Southern Section – The main construction elements of this section are as follows.
Twin Tunnels: The tunnels that started in the Northern Section will come up to the
Southern Section. The main benefits of the tunnels are that the residential areas will not be
disturbed and there will be no bridges required on the Yarra River.
Manningham Road Interchange: In this section, an interchange will be constructed for
the drivers who wish to go off the North East Link and move into the Manningham Road.
Another interchange and tunnel portal will link the road to the Eastern Freeway as the North East
Link will continue further south.

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Eastern Freeway – This section already exists and as a part of this project, this section
will be repaired and modified and some part will be reconstructed.
A3.5 Environmental Costs or Benefits
In addition to the construction, the project also focuses on conservation of the
environment throughout the course of the construction. Green corridors will be constructed
throughout the course of the Link in addition to minimization of materials wastage that would
cause negative impact on the environment (Lopez, Mascione & Liu 2017, p. 207-217). A major
portion of the road includes underground tunnels so that the environment above the surface is not
disturbed during construction or even when the link will be open for traffic. Low vibration
machineries will be used for the construction as well. Overall, these steps will increase the
budget of the project but will help gain environmental benefits in the near future.
A4. Funding Mechanisms
Since this is a long term project with a huge budget, Victoria government will fund for
the project in different phases. The government will make yearly payment for funding the project
depending on the progress available in the project.
A5. Key Stakeholders
The key stakeholders in this project are shown in the following table.
Victorian government Federal government Local government
Private road operators Market Landowners
Traditional owners and
indigenous groups
Transport peak bodies Road users
Freight industry Transport operators Community and environment

6PROJECT RISK, FINANCE AND MONITORING
interest groups
Vulnerable groups and
individuals
Social service providers
Culturally and linguistically
diverse communities
Community facility owners and
operators
Media
Local and regional business
owners incl National
Employment & Innovation
Clusters
Part B: Risk Analysis
The risks are analyzed for the project and rated in the scale that is shown as follows.
Likelihood
Consequence
Negligible (1) Minor (2) Moderate (3) Major (4) Severe (5)
Rare (1) Very low – 1 Very low – 2 Low – 3 Low – 4 Medium – 5
Unlikely (2) Very low – 2 Low – 4 Medium – 6 Medium - 8 High – 10
Possible (3) Low – 3 Medium – 6 Medium – 9 Medium – 12 High – 15
Likely (4) Low – 4 Medium – 8 Medium – 12 High – 16 Very high – 20
Almost certain (5) Medium – 5 High – 10 High – 15 Very high – 20 Very high – 25
Based on the analysis of possible risks associated with the project, the risk matrix is
created as follows.
Risk Name Risk Description Likelihood Consequence Risk Rating
Transport Throughout the
construction
period, there might
be significant
traffic blockage
5 4 20

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and other issues in
the nearby areas
Air Quality Due to
construction,
drilling and other
activities, the air
quality of the
surroundings will
be reduced
significantly
5 3 15
Surface Noise and
Vibration
There are high
chances of surface
noise and vibration
during the entire
construction
period
5 3 15
Tunnel Vibration During the
construction of the
tunnels, vibration
may upset the
nearby residents
4 3 12
Land Use Planning Land may not be
available on which
the Link will be
constructed
3 4 12

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Business Nearby business
may be negatively
affected due to
land acquisition
(temporary or
permanent),
vibration,
construction work
and others.
5 3 15
Arboriculture The nearby
plantations and
trees will be
affected by the
construction works
5 4 20
Landscape and
Visual
During the entire
phase of the
construction, the
landscape and
visuals may get
affected
5 2 10
Social Temporary or
permanent
displacement of
residents or
blockage of access
to amenities may
4 4 16

9PROJECT RISK, FINANCE AND MONITORING
occur during the
construction phase
Human Health The pollution
generated during
the construction
process may affect
human health in
the nearby area
5 4 20
Historical Heritage Due to
construction,
nearby historical
heritage buildings
may get affected
4 2 8
Aboriginal
Cultural Heritage
Due to
construction,
nearby aboriginal
cultural heritage
buildings may get
affected
4 2 8
Ground Movement Ground movement
may occur due to
construction of
tunnels, passages,
interchanges and
others.
4 3 12

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Groundwater Groundwater may
get polluted due to
underground
construction and
excavation
5 5 25
Contamination and
Soil
Soil contamination
may occur due to
the construction,
dumping of
materials and other
factors
5 5 25
Surface Water Surface water may
get polluted due to
dumping of
materials and other
factors
5 5 25
Ecology Ecological balance
may get affected
due to the large
scale construction
for long period of
time
5 3 15
Greenhouse Gas Greenhouse gas
emission levels
may increase
during the
4 4 16

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prolonged period
of construction as
there will be
significant traffic
blockage
These are some of the major risks that are associated with the project. As seen from the
risk rating and the risk matrix, majority of the risks fall within medium, high and very high
categories. Thus, it is required to treat each of the risk with top priority before the negative
impacts are realized (Rahmani, Maqsood & Khalfan 2017, p. 593-609). From the scale of the
risks identified, it is also evident that in order to mitigate these risks, significant costs will be
encountered. Hence, the estimated total budget of the project has been raised to $15bn from
$10bn.
Part C: Risk Mitigation Plan
Based on the analysis above, the major risks associated with the project have been
identified and rated as per the risk matrix. Now, as per the risks identified, it is important to
develop risk mitigation plan so as to minimize the impacts on the environment, society and
natural resources like soil and water (Park & Tucker 2017, p. 228-237). It has also been
identified that the risk mitigation processes will also have significant impact on the project
budget as it is a long term and large scale project and so the budget has to be adjusted
accordingly. Some of the risk mitigation measures are explained below based on the impact area
of the risks.

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Impact on Environment – One of the biggest risks of a long term construction project
spanning over a large area and timeline is the massive impact on the nearby environment. This
project spans over 7-8 years and 26 km length and hence, it is expected that this project will have
a profound impact on the nearby environment. Some of the major causes of the impacts on the
environment are as follows.
Air Pollution: Due to the prolonged construction process, there will be huge amounts of
fly ash, dust, greenhouse gases and others that will spread in the nearby environment. As a result,
the residents of the area, birds, animals and even trees will be affected and several diseases can
also occur due to these (Sherratt & Turner 2018). Due to this pollution, the entire ecological
balance can be disrupted causing massive negative impact on the environment.
Pollution due to Solid Wastes: In addition to the fly ash and dust, the solid wastes can
also cause significant negative impact on the environment. Due to the improper disposition of the
solid wastes nearby green vegetation zones and water bodies, plant and animal lives may get
hampered. Some solid wastes can also cause poisoning effects on animals and plants causing
their deaths.
The main strategy is mitigate these risks is to ensure the wastes are not disposed off at the
wrong place and also prevent generation of dust and fly ash. Currently, there are materials
available in the market that generate less dust and are also useful for the construction. However,
these materials are expensive and hence, budget should be increased so that these materials can
be used (Tam and Lu 2016, p. 190). Again, the solid residual wastes generated during the
construction must be disposed in the right place rather than anywhere. Additional logistics
services can be hired to transport the solid wastes to the correct disposal area. This will also have

13PROJECT RISK, FINANCE AND MONITORING
some impact on the budget but this is recommended to prevent negative impact on the
environment.
Impact on Society – The project will also have significant negative impact on the
society, especially on the residents living nearby and adjacent to the construction area. Some of
the major impacts are listed below.
Sound and Vibration: During the entire construction process, due to excavation, tunnel
construction and other works, sound and vibration will be produces that may have negative
impacts on the nearby residents especially the babies and the senior citizen.
Land Use: Since this project involves construction of a new high speed road network, it
will require acquisition of land so that the entire roadway can be constructed. However, most of
the land that will be used are in private ownership and thus, for the acquisition process, it will be
required to purchase the lands from their respective owners. Legal complications may arise as
some of the owners may not want to sell their lands for the construction work.
Temporary or Permanent Relocation: In addition to land acquisition explained above,
another risk may arise due to the requirements of the construction. This includes relocation of the
residents and shops from the construction area. The relocation process may be temporary or
permanent depending on the structure and location of the road (Loosemore and Reid 2018, p. 1-
18). This can cause serious trouble for the residents and shopkeepers as they may not be able to
find a new location even if they are provided with sufficient funds. Furthermore, temporary
relocation for a 7-year period is not only unrealistic but also non-feasible. Hence, permanent
relocation is probably the only solution.

14PROJECT RISK, FINANCE AND MONITORING
By analyzing the risks as discussed above, the mitigation plan should focus on legal
approach towards land acquisition and relocation. The government should take active steps to
ensure the relocated residents and shops get proper homes and shops at a different location. In
addition, the land owners should be legally approached and convinced to sell their land or allow
the construction on their land. Finally, for the sound and vibration risk, it is recommended to use
low vibration machineries to minimize the sound and vibration as much as possible.
Impact on Natural Resources – The final main risk area that will be analyzed here
involves the negative impacts on the natural resources in the area. Due to disposal of the wastes,
excavation and digging of tunnel, underground construction and other activities, soil and water
contamination may occur. Soil contamination can lead to poisoning of plants and ground animals
whereas water contamination can lead to various diseases in the nearby diseases (Hong et al.,
2019, p. 154-183). Hence, it is important to ensure the wastes are not disposed openly or in the
water to prevent contamination. The underground activities are also needed to be conducted in
such a way that poisoning and contamination do not occur.
It is important to note that although these measures will incur additional costs for the
construction, these risks must be treated in all seriousness and top priority as they involve health
of animals, plants and also the humans (Shah 2016). It is understandable that due to the scale of
the project, some negative impacts are bound to occur and cannot be controlled completely but
active measures are to be taken to minimize the impacts of the risks on the project and beyond.

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References
Dance, F 2018. North-East link: A gift to the road lobby rent-seekers. Green Left Weekly, (1199),
p.8.
Henderson, S 2018. Competitive sub-metropolitan regionalism: Local government collaboration
and advocacy in northern Melbourne, Australia. Urban Studies, 55(13), pp.2863-2885.
Hong, Y, Hammad, AW, Sepasgozar, S & Akbarnezhad, A 2019. BIM adoption model for small
and medium construction organisations in Australia. Engineering, Construction and
Architectural Management, 26(2), pp.154-183.
Laidlaw, MA, Alankarage, DH, Reichman, SM, Taylor, MP & Ball, AS 2018. Assessment of
soil metal concentrations in residential and community vegetable gardens in Melbourne,
Australia. Chemosphere, 199, pp.303-311.
Li, RYM 2016. Construction safety and waste management. Springer International Pu.
Loosemore, M & Reid, S 2018. The social procurement practices of tier-one construction
contractors in Australia. Construction Management and Economics, pp.1-18.
Lopez, R, Mascione, D & Liu, HJ 2017. Management of issues in the delivery of airport
infrastructure within Western Australia. Proceedings of the Institution of Civil Engineers-
Management, Procurement and Law, 170(5), pp.207-217.
Park, J & Tucker, R 2017. Overcoming barriers to the reuse of construction waste material in
Australia: a review of the literature. International Journal of Construction Management, 17(3),
pp.228-237.
Rahmani, F, Maqsood, T & Khalfan, M 2017. An overview of construction procurement
methods in Australia. Engineering, Construction and Architectural Management, 24(4), pp.593-
609.

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Shah, RK 2016. An exploration of causes for delay and cost overruns in construction projects:
Case study of Australia, Malaysia & Ghana. Journal of Advanced College of Engineering and
Management, 2, pp.41-55.
Sherratt, F & Turner, M 2018. Exploring the hidden social consequences of working in
construction with q methodology: developing a study for Australia and the UK. In Joint CIB
W099 and TG59 International Safety, Health, and People in Construction Conference (pp. 283-
291). Marketing Aumentado.
Tam, V & Lu, W 2016. Construction waste management profiles, practices, and performance: a
cross-jurisdictional analysis in four countries. Sustainability, 8(2), p.190.