Project Risk Finance and Monitoring

This report provides an overview of the project budget, social and economic rationale, key statistics, funding mechanism, and key stakeholders. It also includes a risk analysis and mitigation plan for the Sydney Metro Northwest project.

Running head: PROJECT RISK FINANCE AND MONITORING
Project Risk Finance and Monitoring
Name of Student
Name of University
Author Note

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PROJECT RISK FINANCE AND MONITORING
Table of Contents
Part A: Project Overview.....................................................................................................2
1. Overall Budget.............................................................................................................2
2. Social and Economic Rationale...................................................................................2
2.1. Project Benefits.....................................................................................................3
2.2. Drawbacks............................................................................................................4
3. Key Statistics...............................................................................................................4
3.1. Scope and Size......................................................................................................4
3.2. Budget and Estimated Cost...................................................................................4
3.3. Time Required to Complete the Project...............................................................5
3.4. Key Construction Elements..................................................................................5
3.5. Environmental Costs or Benefits..........................................................................5
4. Funding Mechanism....................................................................................................5
5. Key Stakeholders.........................................................................................................6
Part B: Risk Analysis...........................................................................................................7
Part C: Risk Mitigation Plan..............................................................................................13
References..........................................................................................................................16

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Risk Analysis and Mitigation Plan
Part A: Project Overview
The project of Sydney Metro Northwest is taken into consideration for analyzing the risk
analysis and mitigation of the risks associated. The Sydney Metro Northwest project is
associated with delivery of eight railway station and space for car parking for 4000 commuter
(Sydneymetro.info. 2019). The project aims in delivering a automated metro rail project in
Australia. This part of the report will provide a brief overview of the overall budget of the
project, social and economic rationale of the project, key project statistics and funding
mechanism associated with the project. The key statistics and the budget details of the project is
discussed in the following paragraphs.
1. Overall Budget
The set budget of the chosen project is $6.30bn. The entire project budget is allocated for
the set tasks of the project. A contract of $1.15 billion was provided to the CPB John Holland
Dragados (CPBJHD) on June 24. $340 million contract was awarded to Impregilo-Salini Joint
Venture while $3.7 billion contract operations was given to Northwest Rapid Transit
(Gharehbaghi and Sagoo 2016). The budget allocated for the project involves the entire
designing, constructional and operational activities.
2. Social and Economic Rationale
The chosen project aims in development of 8 railway stations and parking space for 4000
commuter for Sydney. The chosen project is the initial stage of Sydney metro project and it aims

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in delivering a fully automated metro rail system in Australia (Liu and Liu 2017). The Sydney
metro rail project offers a large number of economic and social benefits.
2.1. Project Benefits
The Sydney Metro Northwest Project has certain economic and social benefit. The major
benefits are as follows-
1. The project aims in delivering and developing a metro rail system, in Australia which
is fully automated.
2. A public transport service, which is reliable will be delivered in that particular region
of Sydney. The Sydney Northwest Area has largest number of car ownership (Bliuc et al. 2017).
The project aims in delivering car parking services to 4000 commuter as well.
3. One of the most significant societal benefits of Sydney Metro rail project is that it
looks after the safety of the customer (Cunningham and Strong 2017). In order to ensure
customers’ safety, more than 230 cameras are installed in the tunnel. The cross passages of the
metro rail project are wide enough for the wheel chairs.
4. In order to ensure additional safety, the cross passages will have a self-closing sliding
door.
5. The lifts associated with the project is designed in such a manner that it is able to
evacuate passengers on stretchers.
6. The proposed project has certain economic benefits as well (Brinkmann, Pearson and
Nye 2017). This is because in this particular project, 2.8 million tonnes of crushed rock that is
was generated as a result of tunneling activity was reused

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7. The proposed project has clear vision of ensuring delivery of a sustainable
infrastructure that will demonstrate improvements in environmental, economic and social aspects
2.2. Drawbacks
There drawbacks associated with the project are as follows (Birdsall 2015)-
1. The size and the specifications of the project increases project complications.
2. Since the proposed project is quite complex, there is schedule risk associated with the
project.
3. Key Statistics
This section of the report provides an overview of the key information associated with the
project.
3.1. Scope and Size
The project aims in delivering a sustainable infrastructure project, completion of which
will provide economic improvements, environmental improvements and social improvements
throughout the chosen project (Nye et al. 2017). The project will be delivering eight new railway
stations after the completion of the project. The project has both societal and economic benefits
which are discussed in the section above. The project is a large scale project and is aimed to be
delivered this year.
3.2. Budget and Estimated Cost

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The project is an ongoing project with an estimated budget of $6.30 billion. The
estimated cost of the project involves the contractual cost, constructional cost and the
infrastructural cost as well.
3.3. Time Required to Complete the Project
The project is an ongoing project and it is in its finishing stage (Larson and Gray 2017).
The project is currently in testing phase and the project is expected to open in May 2019. The
project started in the year 2013.
3.4. Key Construction Elements
The key constructional elements associated with the implementation of the project
involves delivery of a commuter service with trains running in every four minutes (Marcelino-
Sádaba et al. 2014). A public transport service will be delivered as a part of the chosen, which is
reliable. Apart from the delivery of the metro rail service, the project aims in delivery of 4000
commuter car parking spaces.
3.5. Environmental Costs or Benefits
This sustainable project addresses the major environmental issues associated with similar
types of project (Kerzner and Kerzner 2017). The crushed rock that was generated as a part of
the tunneling activity could have adversely affected the environment. However, 100 percent of
2.8 million tonnes of the crushed rock that was generated was used in the project work.
4. Funding Mechanism

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The project is a societal infrastructure project and therefore the government has
committed to fund the project. The project is a part of country’s biggest public transport project
that aims in connecting city centers around suburbs.
5. Key Stakeholders
The main stakeholders associated with the project are as follows-
1. CPB John Holland Dragados
2. Impregilo-Salini
3. Northwest Rapid Transit
4. State Government
5. Daily passengers

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Part B: Risk Analysis
This section of the report identifies the major risks and issues associated with the chosen
project. The project is currently ongoing and it is set to complete this year. However, there were
major risks and issues associated with this public infrastructure project (Carvalho and Rabechini
Junior 2015). The size and the complexity of the chosen project added to the identified project
risks. The risk assessment and the management process of the chosen project will be based on
the PMBOK risk management framework.
The risk management knowledge area of PMBOK is mainly based on 7 processes which
are as follows-
1. Planning of Risk Management process
2. Risk Identification
3. Performing the Qualitative Analysis of the Risk
4. Performing Quantitative Analysis of the Risk
5. Risk Response Planning
6. Implementing Risk Response
7. Monitoring the risk
On analyzing the risks and issues associated with the chosen project, all the above
mentioned points will be considered (Ramos 2018). The project team of the chosen project had
planned the risk management of the project prior to the implementation of the project, which

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helped in efficient management of the risk. The project reports of similar infrastructural project
were analyzed to identify the risk trends in the project.
A qualitative and quantitative risk management framework is utilized to identify the
major risks related to the project. The data related to qualitative risk identification are
represented in form of the probability impact table below-
Risks Description Probability/Likelihood Impact/ Severity
Design Risks The project is quite
complex and
therefore it is
essential to provide
an effective project
design (McWilliam
and Cutcliffe 2018).
Considering the size
of the project, any
issue in the project
design could have
resulted in project
failure.
High High
Schedule Risks The project has
schedule risks as it is
a large sized project
(Khan and Lauria
High High

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2018). The project
aims in development
of eight railway
station and car
parking spaces and
therefore, it might be
difficult to plan and
schedule an entire
project in the project
initiation phase.
Operational Risks The Sydney metro
Northwest Project
involves
development of eight
new railway stations,
which might result in
certain operational
risks.
High Medium
Scope Change The change in the
scope of the project
can result in risks
related to operations
and control (Johri et
Medium Medium

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al. 2018).
Safety Implications Safety of the
customers or the
daily commuters is
one of the most
important aspects of
this project. Any
issues in safety
implications of the
customer can result
in project failure
Low High
Environmental
aspects
The project is to be
implemented in such
a way that the
environmental issues
are acknowledged.
Any environmental
risks should be
mitigated with high
priority. One of the
basic clauses of the
project is to ensure
environmental
Medium Medium

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PROJECT RISK FINANCE AND MONITORING
sustainability
As a part of quantitative risk analysis method, two individuals associated with the
particular project are interviewed. The respondents were asked about the most significant risk
they have faced in the project. It has been observed that the schedule risk and the operational risk
are the major risks related to the project.
On basis of the risks identified a risk matrix is developed which is mentioned as follows-
Risk Assessment Matrix
ACCEPTABLE TOLERABLE GENERALLY UNACCEPTABLE
NOT LIKELY Enviornmental Aspects and
Scope Change Safety Implications
POSSIBLE Operational Risk Design Risks
PROBABLE Scope Change HIGH Schedule Risks
SCALE OF SEVERITY
SCALE OF LIKELIHOOD
Figure 1: Representing the Risk Matrix for the Identified Risks

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The structure of risk matrix is as follows-
Risk Assessment Matrix
ACCEPTABLE TOLERABLE GENERALLY UNACCEPTABLE
NOT LIKELY LOW MEDIUM MEDIUM
POSSIBLE LOW MEDIUM HIGH
PROBABLE MEDIUM HIGH HIGH
SCALE OF SEVERITY
SCALE OF LIKELIHOOD
Figure 2: A standard Risk Matrix
The risks in Figure 1 is plotted in the matrix as per their severity and probability of occurrence.

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PROJECT RISK FINANCE AND MONITORING
Part C: Risk Mitigation Plan
This section of the report will be analyzing the risks identified in the section above. The
risk associated with the project have been identified on basis of the qualitative and quantitative
risks identification process. The assessment of the risks are based on the PMBOK risk
management framework. The previous section of the report identifies six most significant risk
associated with the Sydney Metro Northwest project. A risk matrix is generated in order to rank
the risk on basis of the likelihood of its occurrence and its probability. Since the particular
project is an ongoing project, it is quite essential to identify the risk mitigation plan for the
identified risk. The risk mitigation plan can significantly help in reducing the impact of the risk
on normal execution of a project.
Design Risk: one of the major risks related to the Sydney Metro Northwest project is the design
risk. The project is a large scale project that aims in delivery of railway station along with
parking of cars for 4000 commuters (Chan 2018). The project aims in improving the daily
commute service and that makes this project a high priority project. Design risk is ranked as a
risk of high probability and high severity risk as occurrence of this risk can largely impact the
schedule, budget and successful implementation of project as well.
It becomes necessary to identify the mitigation approach for the design risk related to
Sydney Metro Northwest project in to ensure that the chosen project is delivered as per the
schedule. The design risk is this project is mitigated by hiring a project design team who have
experience in similar infrastructure projects. One of the basic aspects of the Sydney metro rail
project is that a reliable public transport service is to be delivered. Securing an effective design

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of the project is therefore necessary (Love et al. 2019). The risk mitigation approach chosen for
this particular risk is risk transfer. The design risk is transferred to the design team of the
project to ensure that a working project design is prepared. The Sydney Metro Northwest project
did not face any significant design risk as of now. A well-structured project design helped in
implementation of the project in an effective manner.
Schedule Risk: Another major risk associated with the project is schedule risk. Since it is a high
priority project, the likelihood of occurrence of this risk is quite high. The schedule risk related
to this project can be mitigated by planning the implementation of the project activities in
accordance to the resources available and time available for the project. In this particular project,
each activity is completed as per plan, which helped in mitigation of the schedule risk associated
with the project. The project management team of the Sydney Metro northwest project ensured
that the project is completed as per the planned schedule. The schedule risk associated with this
project is therefore mitigated by following the risk control approach.
Operational Risks: The Sydney metro Northwest project is associated with certain operational
risks. Since the infrastructure project is associated with daily commute service, the operational
risks is quite common. The severity of the identified operational risks is also high in this project
and therefore, identification of the mitigation approach is necessary. The operational risk is
mitigated in this project by ensuring effective supervision and control of the project activities.
Scope Change: one of the most significant risk associated with any construction project is
change in project scope. Since the project is a large scale project the probability of occurrence of
this risk was high as well. The risk of scope change was managed by identifying the exact project
requirements prior to the drafting of project charter. The Sydney metro northwest project was

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considered to be the first stage of metro project and therefore, it has a high risk of scope change.
Therefore, the approach chosen for mitigation of this risk is risk avoidance approach.
Safety Implication: Another major risk associated with the chosen project is related to safety
implications. Since the project promised to deliver an infrastructure service that will look after
the safety of the customers, the risks related to safety implication is needed to be controlled. The
risk mitigation approach that is identified for this risk is risk control. The risks of safety
implication is controlled by ensuring through supervision in each phase of project
implementation.
Environmental Aspects: The infrastructure project is associated with certain major
environmental risks. However, in this particular project, the environmental risks are mitigated by
re-using the majority of the wastes generated through tunneling activities. This, the
environmental risks in the project is minimized.

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References
Birdsall, M., 2015. From Metro and Light Rail to Trains and Trams: Exploring Sydney,
Australia's Expansive Public Transit Initiatives. Institute of Transportation Engineers. ITE
Journal, 85(11), p.31.
Bliuc, R., Kitson, M.C., Lee, C.H., Miller, T., O'Halloran, B., McLaughlin, V., Hsi, J.,
Candeepan, C. and Somasundaram, M., 2017. Sydney Metro Northwest-Design and construction
of the underground stations. In 16th Australasian Tunnelling Conference 2017: Challenging
Underground Space: Bigger, Better, More (p. 144). Engineers Australia.
Brinkmann, S.M., Pearson, M.S. and Nye, E.J., 2017. Sydney Metro Northwest-Design and
construction of the Norwest and Castle Hill pedestrian underpass. In 16th Australasian
Tunnelling Conference 2017: Challenging Underground Space: Bigger, Better, More (p. 160).
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performance: the importance of soft skills. International Journal of Production Research, 53(2),
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Gharehbaghi, K. and Sagoo, A., 2016. Environmental Implications of the Sydney Metro: A Case
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Johri, P., McGann, T.J., Venn-Brown, D.C. and Zou, R., 2018. Introducing Sydney's fully
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