Regional Rail Fleet (NSW) Case Study
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AI Summary
This case study explores the Regional Rail Fleet (NSW) project, which aims to replace the old NSW Rail fleet and create new job opportunities in the region. It discusses the key risks that the project could face and proposes a risk management plan to mitigate these risks. The risks include technical risks, commercial procurement risks, financial risks, and contractual risks. The risk management plan involves identification, assessment, allocation, and mitigation of risks.
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Regional Rail Fleet (NSW) Case Study
Table of Contents
Introduction................................................................................................................................2
Key project risks........................................................................................................................2
Risk treatments...........................................................................................................................4
risk management plan................................................................................................................4
Conclusions and Recommendations........................................................................................11
References................................................................................................................................12
1
Table of Contents
Introduction................................................................................................................................2
Key project risks........................................................................................................................2
Risk treatments...........................................................................................................................4
risk management plan................................................................................................................4
Conclusions and Recommendations........................................................................................11
References................................................................................................................................12
1
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Regional Rail Fleet (NSW) Case Study
Introduction
The NSW Government has planned to replace its 36-year-old NSW Rail fleet consisting of
three trains including XPLORER, XPT, and Endeavour. The new facility would be
constructed in Dubbo which would help creating new job opportunities in the region. The
facility would include new trains that are safer, more comfortable, better in accessibility, and
reliability. The trains would take passengers from Sydney to other regions in NSW such as
Brisbane, Melbourne, and Canberra. The delivery contract has been awarded to Momentum
Trains which is an international consortium between CAF, Pacific Partnerships, UGL Rail
services, CAF Investments, and DIF infrastructure. The contract scope includes designing,
construction, maintenance, and finance for the new fleet and the new facility. This report
explores the key risks that the project could be encountering and proposes a risk management
plan to ensure that risks scenarios are well taken care of.
This report explores different types of risks that the current project and along these categories
are identified specific risks. The level of severity that each of these risks would have are
noted and based on the same, a plan is made for the mitigation. The mitigation plan presents
the appropriate strategy for response that can be avoiding , acceptance, transfer, or mitigation.
Key project risks
On railway construction projects, a number of different types of risks can occur and these can
be financial, safety related, commercial risks, technical risks, or project related such as cost
overruns or project delays, and so on. This section lists down all kinds of and instances of
project risks that NSW rail fleet project can face. The risks include:
Technical Risks: Technical risks can result from design inconsistencies, construction issues,
technology obsolesce, and location challenges. Specific risks that can occur on the current
project include:
There can be defects and deficiencies in the construction of the fleet that can cause
product failure in performance which would affect the project deliverables
The condition of the soil boring and other geospatial constraints can cause difficulties
in the construction work and can also pose additional risks to the project (Friedlander,
2003)
2
Introduction
The NSW Government has planned to replace its 36-year-old NSW Rail fleet consisting of
three trains including XPLORER, XPT, and Endeavour. The new facility would be
constructed in Dubbo which would help creating new job opportunities in the region. The
facility would include new trains that are safer, more comfortable, better in accessibility, and
reliability. The trains would take passengers from Sydney to other regions in NSW such as
Brisbane, Melbourne, and Canberra. The delivery contract has been awarded to Momentum
Trains which is an international consortium between CAF, Pacific Partnerships, UGL Rail
services, CAF Investments, and DIF infrastructure. The contract scope includes designing,
construction, maintenance, and finance for the new fleet and the new facility. This report
explores the key risks that the project could be encountering and proposes a risk management
plan to ensure that risks scenarios are well taken care of.
This report explores different types of risks that the current project and along these categories
are identified specific risks. The level of severity that each of these risks would have are
noted and based on the same, a plan is made for the mitigation. The mitigation plan presents
the appropriate strategy for response that can be avoiding , acceptance, transfer, or mitigation.
Key project risks
On railway construction projects, a number of different types of risks can occur and these can
be financial, safety related, commercial risks, technical risks, or project related such as cost
overruns or project delays, and so on. This section lists down all kinds of and instances of
project risks that NSW rail fleet project can face. The risks include:
Technical Risks: Technical risks can result from design inconsistencies, construction issues,
technology obsolesce, and location challenges. Specific risks that can occur on the current
project include:
There can be defects and deficiencies in the construction of the fleet that can cause
product failure in performance which would affect the project deliverables
The condition of the soil boring and other geospatial constraints can cause difficulties
in the construction work and can also pose additional risks to the project (Friedlander,
2003)
2
Regional Rail Fleet (NSW) Case Study
There can also be problems with the fleet that is delivered if it is not as per the desired
specification and it can affect the whole project as it would affect the performance of
the whole system (Caltrans, 2007)
Commercial Procurement Risks: These risks can arise due to complications in project size,
contract types, buying constraints, and timescales. Specific risks that can occur on the current
project include:
As the company has taken design build contractual approach to the development of
the fleet, it can have a risk of failure if the project owner is unsophisticated and is
looking for a quick build solution and thus, pushing the collaborating parties to
deliver or is trying to get the cheapest deals and thus, compromising on the quality of
delivery
In DB projects, there are many people involved at work and thus, there is possibility
of blurring of the lines of responsibilities that can create confusion causing design
discrepancies. If there is a design discrepancy then it can affect the whole
construction of the project (Friedlander, 2003).
Financial risks: These risks can occur due to constraints in budget or finance, taxation and
public perceptions. Specific financial risks that can occur on the current project include:
If there are changes in the orders then there would be associated claims added which
would also add the project cost and if not controlled then it can lead to a budget
overrun
The project can also run into budget overruns due to problems of prices increasing for
raw materials or contract work (Galway, 2004)
Contractual risks: Contracts are a major part of any construction or production project
where third parties are majorly involved in deliveries. With these also come certain risks that
have to be taken care of . Specific risks that can occur on the current project include:
If the owner is unable to make the architect and the contractor join on the same
dispute resolution forum when they are having a problem between them then it can
result into inconsistencies in adjudication such that different claims have to be
pursued against the two parties to contract separately
3
There can also be problems with the fleet that is delivered if it is not as per the desired
specification and it can affect the whole project as it would affect the performance of
the whole system (Caltrans, 2007)
Commercial Procurement Risks: These risks can arise due to complications in project size,
contract types, buying constraints, and timescales. Specific risks that can occur on the current
project include:
As the company has taken design build contractual approach to the development of
the fleet, it can have a risk of failure if the project owner is unsophisticated and is
looking for a quick build solution and thus, pushing the collaborating parties to
deliver or is trying to get the cheapest deals and thus, compromising on the quality of
delivery
In DB projects, there are many people involved at work and thus, there is possibility
of blurring of the lines of responsibilities that can create confusion causing design
discrepancies. If there is a design discrepancy then it can affect the whole
construction of the project (Friedlander, 2003).
Financial risks: These risks can occur due to constraints in budget or finance, taxation and
public perceptions. Specific financial risks that can occur on the current project include:
If there are changes in the orders then there would be associated claims added which
would also add the project cost and if not controlled then it can lead to a budget
overrun
The project can also run into budget overruns due to problems of prices increasing for
raw materials or contract work (Galway, 2004)
Contractual risks: Contracts are a major part of any construction or production project
where third parties are majorly involved in deliveries. With these also come certain risks that
have to be taken care of . Specific risks that can occur on the current project include:
If the owner is unable to make the architect and the contractor join on the same
dispute resolution forum when they are having a problem between them then it can
result into inconsistencies in adjudication such that different claims have to be
pursued against the two parties to contract separately
3
Regional Rail Fleet (NSW) Case Study
If there is no provision made for the warranty of the quality when developing
contracts with the designers, if design faults occur later, the project owner would not
be safeguarded against the risk that can occur due to design faults
Project Risks: Project risks can occur due to several factors that can affect the triple
constraints including cost, scope, and time. Specific risks that can occur on the current project
include:
If there are changes in the scope during the project execution then it can result into
additional costs as well as delays in deliveries
If there is a communication gap in the project team then it can result into delivery
inconsistencies and even conflicts
If there are conflicts in the requirements of the stakeholders then it can result into
disruption in approvals and other procedures as well as can cause difficulties in
acceptance if not taken care of at the beginning (GALWAY, 2004).
Risk treatments
Risks can be treated in different ways such as through elimination of causes that can result
into a risk, reduction of risk by taking appropriate mitigation measures, transferring of risk to
another party such as contractor or insurance service provider, and retention of risk if its
resolution steps would be more costly while the risk would not make a major difference to the
outcome of the project. The measures are chosen based on the level of severity and the
condition of the risk (Kendrick, 2003).
risk management plan
Risk management majorly involves identification, assessment, allocation, and mitigation of
risks.
Identification: Risk identification involves identification of the categories of risks and then
identifying specific risks that can occur on the current project. A risk identification has been
done for the current case considering risk categories like financial, technical, contractual,
project management, and commercial.
Assessment: The risks are assessed on the basis of the likelihood of facing them and the level
of impact they would create on the project. This would help in understanding the level of
severity of the risk and based on it, a decisions can be taken on the resolution and mitigation
plan (Kärri, 2014).
4
If there is no provision made for the warranty of the quality when developing
contracts with the designers, if design faults occur later, the project owner would not
be safeguarded against the risk that can occur due to design faults
Project Risks: Project risks can occur due to several factors that can affect the triple
constraints including cost, scope, and time. Specific risks that can occur on the current project
include:
If there are changes in the scope during the project execution then it can result into
additional costs as well as delays in deliveries
If there is a communication gap in the project team then it can result into delivery
inconsistencies and even conflicts
If there are conflicts in the requirements of the stakeholders then it can result into
disruption in approvals and other procedures as well as can cause difficulties in
acceptance if not taken care of at the beginning (GALWAY, 2004).
Risk treatments
Risks can be treated in different ways such as through elimination of causes that can result
into a risk, reduction of risk by taking appropriate mitigation measures, transferring of risk to
another party such as contractor or insurance service provider, and retention of risk if its
resolution steps would be more costly while the risk would not make a major difference to the
outcome of the project. The measures are chosen based on the level of severity and the
condition of the risk (Kendrick, 2003).
risk management plan
Risk management majorly involves identification, assessment, allocation, and mitigation of
risks.
Identification: Risk identification involves identification of the categories of risks and then
identifying specific risks that can occur on the current project. A risk identification has been
done for the current case considering risk categories like financial, technical, contractual,
project management, and commercial.
Assessment: The risks are assessed on the basis of the likelihood of facing them and the level
of impact they would create on the project. This would help in understanding the level of
severity of the risk and based on it, a decisions can be taken on the resolution and mitigation
plan (Kärri, 2014).
4
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Regional Rail Fleet (NSW) Case Study
Mitigation: Risks on a project can be responded to in a number of different ways such as
dealing with the risk, transferring it, accepting it, insuring against it, avoiding it, allocating it
or ignoring each. The choice of mitigation strategy has to be made to ensure that the right
strategy has been chosen. When dealing with risks, decisions are taken on who would be
bearing the risks from the partners to contracts. In the risk transfer, the project owner usually
transfers the risk to the contractor. When risk has no major impact on the project, it is either
ignored or accepted. Risks that can have major impacts on the project performance and can
be foreseen at the starting of the project are best avoided. In risk allocation, a number of
payment methods are used to compensate for the risks occurring on the project through
disbursement or reimbursements.
The following table presents a summary of al the risks identified in each category, presents an
assessment of them based on their level of severity and suggests a mitigation strategy for
each.
Risk
category
Risk Probability
of
occurrence
Impact Mitigation Measures
Project
Management
There could be
delays in the
awarding of
the contract
that can result
into delays in
the whole
project
Moderate Moderate The contractor can have a
claim and put it as an
escalation is the site is not
available on time as defined
in the contract document and
renegotiate the contract price
to make adjustments for the
delays
If the
contractor has
not been
provided
complete
information on
site conditions
then there can
be
Moderate High The contractor can accept the
risk and investigate the site
to understand how the
situation can be handled.
Alternatively, the contractor
can put a request to the
project owner after taking
assessment of the site and
demand for recovery against
5
Mitigation: Risks on a project can be responded to in a number of different ways such as
dealing with the risk, transferring it, accepting it, insuring against it, avoiding it, allocating it
or ignoring each. The choice of mitigation strategy has to be made to ensure that the right
strategy has been chosen. When dealing with risks, decisions are taken on who would be
bearing the risks from the partners to contracts. In the risk transfer, the project owner usually
transfers the risk to the contractor. When risk has no major impact on the project, it is either
ignored or accepted. Risks that can have major impacts on the project performance and can
be foreseen at the starting of the project are best avoided. In risk allocation, a number of
payment methods are used to compensate for the risks occurring on the project through
disbursement or reimbursements.
The following table presents a summary of al the risks identified in each category, presents an
assessment of them based on their level of severity and suggests a mitigation strategy for
each.
Risk
category
Risk Probability
of
occurrence
Impact Mitigation Measures
Project
Management
There could be
delays in the
awarding of
the contract
that can result
into delays in
the whole
project
Moderate Moderate The contractor can have a
claim and put it as an
escalation is the site is not
available on time as defined
in the contract document and
renegotiate the contract price
to make adjustments for the
delays
If the
contractor has
not been
provided
complete
information on
site conditions
then there can
be
Moderate High The contractor can accept the
risk and investigate the site
to understand how the
situation can be handled.
Alternatively, the contractor
can put a request to the
project owner after taking
assessment of the site and
demand for recovery against
5
Regional Rail Fleet (NSW) Case Study
unconsidered
consequences
that contractor
would have to
deal with
the additional efforts that
would be needed on the
project that were not
anticipated earlier
There can be
design
discrepancies
or faults that
can later cause
problems in
construction
Low
(OECD,
2016)
high This risk must be avoided at
all costs by ensuring that all
design requirements are well
understood in advance and
are worked upon to create a
fool proof design
There could be
ambiguities in
the documents
shared between
different
parties to
contract that
can cause
confusion in
delivery scope
and
responsibilities
Low Moderate
(OECD,
2014)
The contractor shall review
all the documents created
and work to resolve
confusion if the risk is
accepted. The contractor
may not seek any extension
in the case but may demand
for clarity from the project
owner while keeping the
project progressing
Procurement
risk
The contractor
may have
delays in the
purchase of
fleets
Moderate High If there is a delay in the
purchase of fleet, the
construction contractor can
claim additional fee and
renegotiate the contract with
the project owner based on
current conditions (Raz,
2001)
Technical
Risks
If the fleet
procured has
Low High The specifications for the
fleet must be very clear and
6
unconsidered
consequences
that contractor
would have to
deal with
the additional efforts that
would be needed on the
project that were not
anticipated earlier
There can be
design
discrepancies
or faults that
can later cause
problems in
construction
Low
(OECD,
2016)
high This risk must be avoided at
all costs by ensuring that all
design requirements are well
understood in advance and
are worked upon to create a
fool proof design
There could be
ambiguities in
the documents
shared between
different
parties to
contract that
can cause
confusion in
delivery scope
and
responsibilities
Low Moderate
(OECD,
2014)
The contractor shall review
all the documents created
and work to resolve
confusion if the risk is
accepted. The contractor
may not seek any extension
in the case but may demand
for clarity from the project
owner while keeping the
project progressing
Procurement
risk
The contractor
may have
delays in the
purchase of
fleets
Moderate High If there is a delay in the
purchase of fleet, the
construction contractor can
claim additional fee and
renegotiate the contract with
the project owner based on
current conditions (Raz,
2001)
Technical
Risks
If the fleet
procured has
Low High The specifications for the
fleet must be very clear and
6
Regional Rail Fleet (NSW) Case Study
some defects
then it can later
cause
performance
issues for the
company
decided by proper
involvement from the
stakeholders by the project
owner who must take the
responsibility to ensure right
fleet is ordered. The project
owner must avoid any such
mistakes from happening on
the project
The geospatial
and soil
conditions at
the site can
cause problems
in construction
if not
addressed on
time
Moderate High The contractor must perform
an inspection at the site for
the soil and geospatial
conditions so that any
possible difficulties can be
anticipated and planned for
before any construction
began
Commercial
risks
A project
owner might
want to save
on cost for
which it may
opt for
suppliers with
sub-par quality
that can affect
the quality of
the
construction
delivered.
Low High The project owner should
consider the safety concerns
and the need for quality
standards to follow before
planning for procurement
from a vendor. This would
ensure that the project owner
is able to avoid the sub-par
suppliers or contractor from
taking services from
(Rodrigues-da-Silva & L.H.,
2014)
Lines of
responsibilities
may get
Moderate Moderate The responsibilities can be
made clear on the project
once it is realized that they
7
some defects
then it can later
cause
performance
issues for the
company
decided by proper
involvement from the
stakeholders by the project
owner who must take the
responsibility to ensure right
fleet is ordered. The project
owner must avoid any such
mistakes from happening on
the project
The geospatial
and soil
conditions at
the site can
cause problems
in construction
if not
addressed on
time
Moderate High The contractor must perform
an inspection at the site for
the soil and geospatial
conditions so that any
possible difficulties can be
anticipated and planned for
before any construction
began
Commercial
risks
A project
owner might
want to save
on cost for
which it may
opt for
suppliers with
sub-par quality
that can affect
the quality of
the
construction
delivered.
Low High The project owner should
consider the safety concerns
and the need for quality
standards to follow before
planning for procurement
from a vendor. This would
ensure that the project owner
is able to avoid the sub-par
suppliers or contractor from
taking services from
(Rodrigues-da-Silva & L.H.,
2014)
Lines of
responsibilities
may get
Moderate Moderate The responsibilities can be
made clear on the project
once it is realized that they
7
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Regional Rail Fleet (NSW) Case Study
blurred causing
confusions and
overlaps at
work which
can affect the
environment at
work
are not which can be a
mitigation strategy. Conflicts
can occur between people if
there are confusions in role
assignment and thus, if
possible such a situation may
also be avoided by creating a
proper plan involving
considerations of the roles
and responsibilities
Contractual
risks
If the project
owner is
unable to make
the architect
and the
contractor join
on the same
dispute
resolution
forum then
escalations can
come from
both sides
which can
make it
difficult for the
project owner
to address and
handle
Moderate Moderate A communication procedure
may be made which is
formal to communicate
between the two contractors
and have proper ways of
resolution. While this cannot
be avoided in certain cases of
contracts, the communication
procedure can help in
reducing the impacts of the
conflicts caused on the
project outcomes.
Financial
risks
Changes in the
scope of the
project can
result into the
increase in
Moderate Moderate If the project price increases
due to change in the scope
then the project manager
needs to take mitigation
measures as such a situation
8
blurred causing
confusions and
overlaps at
work which
can affect the
environment at
work
are not which can be a
mitigation strategy. Conflicts
can occur between people if
there are confusions in role
assignment and thus, if
possible such a situation may
also be avoided by creating a
proper plan involving
considerations of the roles
and responsibilities
Contractual
risks
If the project
owner is
unable to make
the architect
and the
contractor join
on the same
dispute
resolution
forum then
escalations can
come from
both sides
which can
make it
difficult for the
project owner
to address and
handle
Moderate Moderate A communication procedure
may be made which is
formal to communicate
between the two contractors
and have proper ways of
resolution. While this cannot
be avoided in certain cases of
contracts, the communication
procedure can help in
reducing the impacts of the
conflicts caused on the
project outcomes.
Financial
risks
Changes in the
scope of the
project can
result into the
increase in
Moderate Moderate If the project price increases
due to change in the scope
then the project manager
needs to take mitigation
measures as such a situation
8
Regional Rail Fleet (NSW) Case Study
project
execution
pricing
may not be avoided. A
contingency funds can be
kept aside in the budget itself
to handle such emergencies.
However, if the funds are
still not sufficient then the
project manager may need to
take the approval for the
additional budget to
accommodate for the
additional scope. The project
scope must be controlled in
any case so that such budget
issues can be minimized.
This can be done by ensuring
that ever change request goes
through a series of
evaluation that are used to
take a decision on whether to
go ahead with the change or
reject it. This can ensure that
only the most important
scope changes are
accommodated
Price
fluctuations in
the material
prices and the
contract prices
can cause
impact on the
project costs in
projects that
take long time
Moderate High This situation can be avoided
by anticipating the time for
completion and making
provisions in the contract by
defining the price change
constraints so that the
contractor or supplier cannot
change the pricing without
any solid justification. In
some cases, the price change
9
project
execution
pricing
may not be avoided. A
contingency funds can be
kept aside in the budget itself
to handle such emergencies.
However, if the funds are
still not sufficient then the
project manager may need to
take the approval for the
additional budget to
accommodate for the
additional scope. The project
scope must be controlled in
any case so that such budget
issues can be minimized.
This can be done by ensuring
that ever change request goes
through a series of
evaluation that are used to
take a decision on whether to
go ahead with the change or
reject it. This can ensure that
only the most important
scope changes are
accommodated
Price
fluctuations in
the material
prices and the
contract prices
can cause
impact on the
project costs in
projects that
take long time
Moderate High This situation can be avoided
by anticipating the time for
completion and making
provisions in the contract by
defining the price change
constraints so that the
contractor or supplier cannot
change the pricing without
any solid justification. In
some cases, the price change
9
Regional Rail Fleet (NSW) Case Study
to complete
such as the
current one
can be restricted with this
approach but in other case,
the price increase may not be
avoided in which case, a
contingency fund can be
utilized
A
communication
gap in the
project team
then it can
result into
delivery
inconsistencies
and even
conflicts
High Moderate The communication gaps can
be avoided by establishing
procedures for
communicating across the
construction project supply
chain. If there are still
communication issues then
the project manger must
intervene and resolve them
as a mitigation measure by
finding out the causes and
being intermediary resolving
conflict between parties
The conflicts
in the
requirements
of the
stakeholders
can cause
problems in
deliverables
and their
acceptance
Moderate High This situation must be
avoided by involving all the
key stakeholders of the
project at the planning and
requirements gathering stage
so that their key needs and
expectations are understood
and are considered while
developing a project plan.
This would ensure that most
of their needs are met and
thus, their acceptance is
gained at the time for the
delivery of the project
10
to complete
such as the
current one
can be restricted with this
approach but in other case,
the price increase may not be
avoided in which case, a
contingency fund can be
utilized
A
communication
gap in the
project team
then it can
result into
delivery
inconsistencies
and even
conflicts
High Moderate The communication gaps can
be avoided by establishing
procedures for
communicating across the
construction project supply
chain. If there are still
communication issues then
the project manger must
intervene and resolve them
as a mitigation measure by
finding out the causes and
being intermediary resolving
conflict between parties
The conflicts
in the
requirements
of the
stakeholders
can cause
problems in
deliverables
and their
acceptance
Moderate High This situation must be
avoided by involving all the
key stakeholders of the
project at the planning and
requirements gathering stage
so that their key needs and
expectations are understood
and are considered while
developing a project plan.
This would ensure that most
of their needs are met and
thus, their acceptance is
gained at the time for the
delivery of the project
10
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Regional Rail Fleet (NSW) Case Study
without fail
The project can
face delays
causing
schedule
overrun that
can have
multiple
implications on
the project cost
and delivery
outcomes
Moderate Moderate The project manager must
keep monitoring project
activities in stages so as to
avoid any delays and if there
are any factors causing
delays then he must work on
resolving them before the
whole project gets affected.
This situation may not
always be avoided and there
can be some delays that
would also incur cost so
company can utilize
contingency funds in the
case. Also, the project
manager has to keep
updating the project plan
with deadlines revised as per
recent progress
Conclusions and Recommendations
A risk assessment was done for the case of regional fleet project and a number of different
types of risks were identified including technical risks, project risks contractual risks and
more. These risks were explored and appropriate mitigation measures were suggested in the
risk management plan that was constructed for the company. Based on this analysis of the
case, certain recommendations can be made for the regional rail fleet project that would
ensure the success of the project. These include:
The company can have several risks related to contractual agreements that it would
face due to the fact the project is long term and can have many changes in the
duration which can affect project outcomes. The company must thus establish a
procedure for change management and have constraints defined for what change in
the scope could be accepted and what should be rejected. Clear exclusions of the
11
without fail
The project can
face delays
causing
schedule
overrun that
can have
multiple
implications on
the project cost
and delivery
outcomes
Moderate Moderate The project manager must
keep monitoring project
activities in stages so as to
avoid any delays and if there
are any factors causing
delays then he must work on
resolving them before the
whole project gets affected.
This situation may not
always be avoided and there
can be some delays that
would also incur cost so
company can utilize
contingency funds in the
case. Also, the project
manager has to keep
updating the project plan
with deadlines revised as per
recent progress
Conclusions and Recommendations
A risk assessment was done for the case of regional fleet project and a number of different
types of risks were identified including technical risks, project risks contractual risks and
more. These risks were explored and appropriate mitigation measures were suggested in the
risk management plan that was constructed for the company. Based on this analysis of the
case, certain recommendations can be made for the regional rail fleet project that would
ensure the success of the project. These include:
The company can have several risks related to contractual agreements that it would
face due to the fact the project is long term and can have many changes in the
duration which can affect project outcomes. The company must thus establish a
procedure for change management and have constraints defined for what change in
the scope could be accepted and what should be rejected. Clear exclusions of the
11
Regional Rail Fleet (NSW) Case Study
project scope must be defined and in case the changes requests ed are from the list of
conclusions they can be rejected. For the project changes that are accepted, proper
contractual regulations so that accordingly adjustments can be made in the cost or
reimbursements in the contracts if the project scope changes have to be
accommodated
The company should, create a chain of command and communication which would
make it seamless for the whole chain of organisations to follow. For this, the company
can use technological solutions such as project management or BIM that would allow
people to collaborate using standard templates and set procedures.
As the company can face a major issue in finance due to pricing changes over time,
contracts can be added with clauses that would take care of the price fluctuations. The
project owner can define constraints on where the supplier or the contractor is not
allowed to make changes in the pricing for materials or work. The contracts must
clearly define the labour cost for each work and accordingly the final prices can be
adjusted if there is a delay in the project demanding more work hours. The project
manager can then raise a request for additional payment based on the terms if the
project deliveries get exceeded beyond the initial plan
The roles and responsibilities for the project team must be clearly defined so that that
there is no confusion and no conflict on who has to do what. With responsibilities
clearly defined, people can work with more efficiency and would also have clear idea
about who should be taking the action in case there are problems at work
The company must have a proper risk management plan set which should take care of
what responses should be taken to avoid them or mitigate their impacts. This practice
must be carried out at the planning stage of the project so that most risks can be
avoided and the team can remain prepared to deal with those arising and unavoidable.
In the case, certain risks occur on the prepuce that could not be anticipated then they
must be recorded in a risk register and appropriate plan for mitigation must be taken
as well as recorded in the register for future lessons.
The project manager must record all the lessons gained from the project activities
which can serve as a knowledge repository that would help the company sustain in the
long run. The lessons learned can also be utilized in future projects so that the
mistakes occurring on the current project can be avoided in future and the things that
are learned to be effective can be used again in future for better project management
12
project scope must be defined and in case the changes requests ed are from the list of
conclusions they can be rejected. For the project changes that are accepted, proper
contractual regulations so that accordingly adjustments can be made in the cost or
reimbursements in the contracts if the project scope changes have to be
accommodated
The company should, create a chain of command and communication which would
make it seamless for the whole chain of organisations to follow. For this, the company
can use technological solutions such as project management or BIM that would allow
people to collaborate using standard templates and set procedures.
As the company can face a major issue in finance due to pricing changes over time,
contracts can be added with clauses that would take care of the price fluctuations. The
project owner can define constraints on where the supplier or the contractor is not
allowed to make changes in the pricing for materials or work. The contracts must
clearly define the labour cost for each work and accordingly the final prices can be
adjusted if there is a delay in the project demanding more work hours. The project
manager can then raise a request for additional payment based on the terms if the
project deliveries get exceeded beyond the initial plan
The roles and responsibilities for the project team must be clearly defined so that that
there is no confusion and no conflict on who has to do what. With responsibilities
clearly defined, people can work with more efficiency and would also have clear idea
about who should be taking the action in case there are problems at work
The company must have a proper risk management plan set which should take care of
what responses should be taken to avoid them or mitigate their impacts. This practice
must be carried out at the planning stage of the project so that most risks can be
avoided and the team can remain prepared to deal with those arising and unavoidable.
In the case, certain risks occur on the prepuce that could not be anticipated then they
must be recorded in a risk register and appropriate plan for mitigation must be taken
as well as recorded in the register for future lessons.
The project manager must record all the lessons gained from the project activities
which can serve as a knowledge repository that would help the company sustain in the
long run. The lessons learned can also be utilized in future projects so that the
mistakes occurring on the current project can be avoided in future and the things that
are learned to be effective can be used again in future for better project management
12
Regional Rail Fleet (NSW) Case Study
References
Caltrans. (2007). PROJECT RISK MANAGEMENT HANDBOOK: Threats and Opportunities
. Caltrans.
Friedlander, M. C. (2003). Risk Allocation in Design-Build Construction Projects. Schiff
hardin LLP.
Galway, L. (2004). Quantitative Risk Analysis for Project Management. RAND.
GALWAY, L. (2004). Quantitative Risk Analysis for Project Management. : Rand
Corporation.
Kärri, T. (2014). Creating risk measurement model to project portfolio management in
construction company,. LAPPEENRANTA UNIVERSITY OF TECHNOLOGY.
Kendrick, T. (2003). Identifying and Managing Project Risk: Essential Tools for
FailureProofing your Project. AMACOM.
OECD. (2016). Country case: Allocation of risks during the construction of Heathrow
Airport Terminal 5 (UK) . OECD.
OECD. (2014). Risk Management and Corporate Governance. OECD.
Rodrigues-da-Silva, & L.H., C. J. (2014). The project risk management process, a
preliminary study. Procedia Technology, 16, 943-949.
Raz, T. M. (2001). Use and benefits of tools for project risk management. International
Journal of Project Management, 19, 9-17.
13
References
Caltrans. (2007). PROJECT RISK MANAGEMENT HANDBOOK: Threats and Opportunities
. Caltrans.
Friedlander, M. C. (2003). Risk Allocation in Design-Build Construction Projects. Schiff
hardin LLP.
Galway, L. (2004). Quantitative Risk Analysis for Project Management. RAND.
GALWAY, L. (2004). Quantitative Risk Analysis for Project Management. : Rand
Corporation.
Kärri, T. (2014). Creating risk measurement model to project portfolio management in
construction company,. LAPPEENRANTA UNIVERSITY OF TECHNOLOGY.
Kendrick, T. (2003). Identifying and Managing Project Risk: Essential Tools for
FailureProofing your Project. AMACOM.
OECD. (2016). Country case: Allocation of risks during the construction of Heathrow
Airport Terminal 5 (UK) . OECD.
OECD. (2014). Risk Management and Corporate Governance. OECD.
Rodrigues-da-Silva, & L.H., C. J. (2014). The project risk management process, a
preliminary study. Procedia Technology, 16, 943-949.
Raz, T. M. (2001). Use and benefits of tools for project risk management. International
Journal of Project Management, 19, 9-17.
13
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