Risk Analysis of Sydney Airport

This document provides a risk analysis of the Sydney Airport project, including site risks, material risks, design risks, WHS risks, and environmental risks. It also discusses the key stakeholders and funding mechanisms. The project aims to create social and economic development in Sydney and boost the flow of goods in the region.

Running head: RISK ANALYSIS OF SYDNEY AIRPORT
Risk Analysis of Sydney Airport
Name of the Student:
Name of the University:
Author Note:

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RISK ANALYSIS OF SYDNEY AIRPORT
Table of Contents
Part A: Project overview:.................................................................................................................1
The overall budget:..........................................................................................................................1
Social and economic rationale:....................................................................................................2
Key statistics:...............................................................................................................................2
Scope and Size:............................................................................................................................2
Budget and estimated costs:.........................................................................................................3
Time required:.............................................................................................................................3
Key construction elements or phases:..............................................................................................4
Environmental benefits:...............................................................................................................5
Funding mechanisms:......................................................................................................................5
Identifying the key stakeholders:.....................................................................................................5
Part B: Risk analysis:.......................................................................................................................6
Risk 1. Site risks:.........................................................................................................................6
Risk 2. Material risks:..................................................................................................................7
Risk 3. Design risks:....................................................................................................................7
Risk 4. WHS risks:......................................................................................................................8
Risk 5. Environmental risks:........................................................................................................9
Part C: Risk mitigation plan:.........................................................................................................10
Conclusion:....................................................................................................................................12

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RISK ANALYSIS OF SYDNEY AIRPORT
References:....................................................................................................................................13

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RISK ANALYSIS OF SYDNEY AIRPORT
Part A: Project overview:
The Western Sydney International Airport, renamed as the Nancy-Bird Walton Airport is
an airport under construction under the supervision of the Department of Infrastructure, Regional
Development and Cities, Government of Australia (Westernsydneyairport.gov.au. 2019). The
project is claimed to create immense benefits to the economy of Sydney and Australia as a
whole. The project management company which is awarded the project is the Australian arm of
Bechtel Infrastructure Limited which is multinational infrastructure company based in the US
(Bechtel.com. 2019). The terms principle would refer to Department of Infrastructure, Regional
Development and Cities, Government of Australia while the project management company
would refer to Bechtel Infrastructure Limited.
The aim of the report would be exploring the scope of the Western Sydney International.
This would be followed by identifying the risks which the project would face and suggesting of
risk mitigation strategies.
The overall budget:
The official website page of Department of Infrastructure, Regional Development and
Cities, Government of Australia dedicated to the project under discussion mentions that the
government invested $ 5.3 billion in equity market to raise funds for the same. Hence, the budget
shown assumed that investment by the government as the only source of funds. It has also been
assumed that the government would use the entire amount for the project.
Particulars A$
Sources of funds
5,300,000,000.00

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RISK ANALYSIS OF SYDNEY AIRPORT
Investment by Government of Australia
(Westernsydneyairport.gov.au. 2019) 5,300,000,000.00
Uses of funds
5,300,000,000.00
Construction of flight paths, roads and rail
connection 5,300,000,000.00
Social and economic rationale:
The Western Sydney Airport is claimed to usher immense social and economic benefits
both during the commencement of the project as well as after completion. It is expected that the
first stage would be completed by 2026. It is estimated that project would generate around 28000
employment. The employment creation would result in economic development among the local
residents of Sydney. This economic development would enable the people to lead higher
standards of life. Thus, it is evident that the project would bring about social and economic
development in Sydney. Moreover, the airport would enable movement of freight faster, thus
boosting flow of goods in the Sydney region and Australia as a whole. Thus, the business firms
located in the regions would be able to make more goods available to consumers both the local
market as well as in the international markets like Asia. This strengthened logistics movement
would enable the local business firms generate higher revenue. This higher revenue would bring
about economic development and boost the social wellbeing of the people living in the region.
Key statistics:
Scope and Size:
The scope of the Western Sydney International Airport project would include
construction of runways, linked roads, railway roads and bus terminus. The estimated size of the

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RISK ANALYSIS OF SYDNEY AIRPORT
runways would be 3700 meters and 12139 feet. The surface of the runways would be made of
asphalt.
Figure 1. Overview of the airport construction site
(Source: Westernsydneyairport.gov.au. 2019)
Budget and estimated costs:
The estimated or budgeted cost of the ambitious airport is expected to be A$
5,300,000,000.00. The government of Australia has invested in the equities market to raise this
colossal amount which it would make available for the project.

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RISK ANALYSIS OF SYDNEY AIRPORT
Time required:
The estimated time within which the first phase of the project would be completed would
be 2026.
Key construction elements or phases:
The key construction elements of the Western Sydney Airport Project are divided into
two broad categories namely, enabling works and main works. The enabling works consist of
making the site fit for the construction of airport. The main works consist of bulk earthworks,
terminal and specialty works and landside civil and building works.

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RISK ANALYSIS OF SYDNEY AIRPORT
Figure 2. Table showing main items of construction of the Western Sydney Airport project
(Source: Wsaco.com.au. 2019)
Environmental benefits:
The Western Sydney International Airport project would have several environmental
benefits. Hon Paul Fletcher, MP, Minister for Urban Infrastructure finalized the Environmental
Impact Statement or EIS. The document clearly mentions that the construction and operations of

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RISK ANALYSIS OF SYDNEY AIRPORT
the airport would consider six main environmental aspects namely, air quality, biodiversity, fuel
jettisoning, Greater Blue Mountains World Heritage Area, Health and Water Quality. The EIS
documents clearly mentions that the airport would comply with Airports (Environment
Protection) Regulations 1997. The air pollution due to dust and smoke which which would be
emitted during construction of the runways and allied works would minimized by spraying
water. Similarly, the project would also include relocation of the resident species of wild animals
to safe zones. The fuel jettison would take place in specified areas. The documents clearly
mentions that the project would treat waste water before releasing into the environment.
Funding mechanisms:
The government of Australia would fund the project by raising the funds from the equity
market. The amount which the body aims to raise to support the project would be A$ 5.3 billion.
Identifying the key stakeholders:
The key stakeholders of the project under study would be divided into two main
categories namely, internal and external stakeholders. The internal stakeholders would consist of
Government of Australia. The external stakeholders would be project management company
namely, Bechtel Infrastructure Limited, the subcontractors, the banks which provide gateways
for transfer of funds in relation to the project and the society in general. The media is also a
significant stakeholder since it enables the government to spread awareness about the
development in the project among the common public.
INFLUENCE
High
KEEP
SATISFIED(banks)
MANAGE CLOSELY(Government
of Australia, Bechtel
Infrastructure Limited)

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RISK ANALYSIS OF SYDNEY AIRPORT
Low
MONITOR
(minimum effort)
(media)
KEEP INFORMED(society)
Low High
INTEREST
Part B: Risk analysis:
The Western Sydney International Airport project would attract several risks which
would require the principle to conduct a risk analysis. A risk analysis of the project uncovers the
following risks which the project is likely to face:
Risk 1. Site risks:
The first risk which Bechtel Infrastructure would face at the very initial level of the
project is site risks. This is because delay in transfer of site results in delay in starting of the
project. This results in increase in expenditure of the project management company which results
in decrease in the revenue earned by the latter. Thus, it is evident that the site risks results in
revenue risks for the project management company. Moreover, the government of Australia due
to extension of the project tenure would come under political pressure. Thus, it is evident that
site risks result in political risks as well. The third risk which risk risk attracts is environmental
risks. This is because prolonging the project commencement due to delay in site handover to
Bechtel by the government would result increase in pollution due to release of large amount of
pollutants from the project site. This would result in resentment and protests from the local
resident population. This it is evident from the description that delay in site handover would
attract environmental risks.

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RISK ANALYSIS OF SYDNEY AIRPORT
Risk 2. Material risks:
The risk analysis of the airport project brings into light the second risks namely, material
risks. Ostad-Ali-Askari and Shayannejad (2015) mention that it is very important that the project
management company uses high quality materials to construct the structures. As far as the
Western Sydney International Airport Project is concerned, it can be pointed out that the scope of
the project consists of building of runways, railways, bus terminus and approach roads. Thus it is
evident that use of high quality materials is very important to ensure safety of the users of the
project. Iqbal et al. (2015) mentions in this respect mention that use of low quality materials
construction projects attracts scope of building collapses and road collapse. These disasters
would in turn result in injury and death of several people. Thus, it is evident that material risks
pertaining to use of inferior quality materials in infrastructure projects would attract risks of
injury and death of large number of people.
Risk 3. Design risks:
Design risks are the third category of risks which projects involving construction of
airports attract. Peng and Stewart (2016) mention in this respect that faulty design attracts severe
risks which can amount loss of lives and injury to several people. As far as the project under
study is concerned, it can be pointed out that construction of airports require application of
specific designs. Howe et al. (2016) point out that faulty designs in construction results in loose
bonding between concrete and the rods within the structures. Faulty designs result in unequal
distribution of weight of structures at height over structures supporting them. This unequal
distribution of weight often results in the collapse of the structures. Thus, it is evident from the
analysis that design risks are one of the most significant risks infrastructure construction projects
attract.

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RISK ANALYSIS OF SYDNEY AIRPORT
Risk 4. WHS risks:
Infrastructure projects attract a great deal of work, health and safety risks. Rameezdeen
and Elmualim (2017) point out that since constructions sites are subject to hostile weather
conditions like heat waves during summer season, there are increased chances of workers dying
to the oppressive heat. It can also be pointed out that construction operations lead to emission of
harmful gases and smoke, all of which are harmful to the health of the workers involved at the
sites. Horton eta l. (2018) point out that risks like injury of workers involved in the construction
sites attract compensation charges against the project management companies involved in the
project. The Safe Work Act 2009 necessitates the companies involved in construction projects to
ensure safe and secure environment of workers. Page 1 of the Model Work Health and Safety
Bill revised as on March 21, 2016 necessitate the employers to protect the employees against
harm to their ‘health, safety and welfare’ (Safeworkaustralia.gov.au. 2019). This means that the
project management company under study namely Bechtel requires to ensure that their
employees working on the site are free from any sort of danger capable of injuring them. Li
(2017) mentions in this respect that considering the nature of the work the construction of
structures involves, it is not feasible to ensure total safety to employees and labours present on a
site. As far as Australia in concerned, there have been multiple incidences in which construction
site workers have been injured badly or even killed (Abc.net.au. 2018). This means that the
project under study would attract work , health and safety risks to workers to high degree. These
accidents attract productivity risks because accidents lead to stalling of the work on the site. Page
134 of the Model Work Health and Safety Bill revised as on March 21, 2016 mentions that the
persons suffering from injury on site can claim compensation from the government. The
construction company would also be directed to compensation to the suffering worker(s). A

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RISK ANALYSIS OF SYDNEY AIRPORT
construction company in Sydney had to pay a whopping $ 13500 as compensation to the injured
worker in 2017 by SafeWork NSW (Finance.nsw.gov.au. 2019). Thus it is evident that WHS risk
would also attract legal risks to companies. Moreover, the company under consideration namely,
Bechtel would be required to pay huge compensation to the injured employee(s) which would
lead to its project operations costs.
Risk 5. Environmental risks:
The analysis of the scope of the project under study namely, the Western Sydney
International Airport construction project shows that it attract high levels of environmental risks.
The Environment Impact Statement or EIS released shows that the project would attract six main
risks namely, air pollution risks, water pollution risks, biodiversity risks, risks pertaining to fuel
emission and risks to the environment of the surrounding mountains
(Westernsydneyairport.gov.au. 2019). The Environment Protection and Biodiversity
Conservation Act 1999 mentions that mandates all the companies to ensure that they do not harm
biodiversity balance in Australia. The act also mentions that companies violating would attract
civil as well as criminal offences towards the responsible company (Environment.gov.au. 2019).
Thus, analysis of the law and the scope of the activities of the project clearly shows that the latter
would result in environmental pollution which in turn would attract government actions against
the company namely, Bechtel. These legal charges would lead to increase of the project, thus
attracting revenue risks.

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RISK ANALYSIS OF SYDNEY AIRPORT
Part C: Risk mitigation plan:
The following are the risk mitigation which the government of Australia as well as the
company namely, Bechtel should consider to mitigate or at least minimize the aforementioned
risks:
Ris
k
No
Risk Incident Risk Description Current
Controls Likelihood Owner(stakeholder
concerned)
1 Site risks
1. Delay in
handover of site.
2. Delay in
project
commencement.
3. Leads to
increase in
maintenance
costs
4. Momentum
and the
Government of
NSW would
come under
intense pressure
to finish the
project within
the specified
time.
1. Starting the
project only
after the site
has been
handed over for
the
commencement
of the project in
writing.
2.Abstain from
using any illegal
or unethical
means like
acquiring the
land from the
local people by
force
High Government of
NSW
2 Material risks
1.Increase of risk
collapse
2. injury and
even death of
the people using
the buildings
3.Accidents on
roads
1 Materials
procured for
the project
should
mandatorily
have ISO
certifications.
2.Appoint of
engineers.
Very high Government of
NSW
3
Design risk 1.Collapse of
structures
during
construction and
1.Ensure that
appropriate
design
specifications
High Government of
NSW

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RISK ANALYSIS OF SYDNEY AIRPORT
collapse of
structures after
closure of the
projects.
2.After closure
of projects
would lead to
injury and death
of users of
facilities
are complied.
2. Audit of the
projects
annually or if
required on
monthly basis
3.Procurement
contract should
specify the
requirements to
adhere to
designs
4
WHS risks Construction
companeis
generates lower
reveneu due to
lack of investors
1. Injuries and
bruises or even
death
2. Action from
Safe Work
Australia
Very high Government of
NSW
5 Environmental
risks
Large scale
environmental
pollution owing
to release of
gases, smoke,
solid wastes and
liquid wastes
include
untreated water
loaded with
chemicals.
1. Comply with
the
environmental
laws in power in
Australia like
Environment
Protection and
Biodiversity
Conservation
Act 1999
2. Waste water
in released only
after treating
3.Recycle water
and reuse it in
the
construction
works
Very high Government of
NSW

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RISK ANALYSIS OF SYDNEY AIRPORT
Conclusion:
It can be concluded from the discussion that project management companies and the
principles should form risk mitigation strategies to minimize project risks. It can also be pointed
out that they should train employees to deal with risks. The government of Australia should
include risk mitigation strategies in its future tender documents.

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RISK ANALYSIS OF SYDNEY AIRPORT
References:
Abc.net.au. 2018. Abc.net.au. [online] Available at:
https://www.abc.net.au/news/2018-09-06/box-hill-melbourne-crane-accident/10208664
[Accessed 24 Apr. 2019].
Bechtel.com. 2019. Bechtel.com. [online] Available at:
https://www.bechtel.com/about-us/offices/australia/ [Accessed 24 Apr. 2019].
Environment.gov.au. 2019. Environment.gov.au. [online] Available at:
https://www.environment.gov.au/resource/local-government-and-australian-environment-law
[Accessed 24 Apr. 2019].
Finance.nsw.gov.au. 2019. Finance.nsw.gov.au. [online] Available at:
https://www.finance.nsw.gov.au/about-us/media-releases/construction-company-fined-after-
worker-injured-fall [Accessed 24 Apr. 2019].
Horton, J., Cameron, A., Devaraj, D., Hanson, R.T. and Hajkowicz, S.A., 2018. Workplace
Safety Futures: The impact of emerging technologies and platforms on work health and safety
and workers’ compensation over the next 20 years.
Howe, C., Lockrem, J., Appel, H., Hackett, E., Boyer, D., Hall, R., Schneider-Mayerson, M.,
Pope, A., Gupta, A., Rodwell, E. and Ballestero, A., 2016. Paradoxical infrastructures: Ruins,
retrofit, and risk. Science, Technology, & Human Values, 41(3), pp.547-565.
Iqbal, S., Choudhry, R.M., Holschemacher, K., Ali, A. and Tamošaitienė, J., 2015. Risk
management in construction projects. Technological and Economic Development of
Economy, 21(1), pp.65-78.

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Li, R.Y.M., 2017. AUTOMATED NETWORK RBFT ALGORITHM AND GAUSSIAN
HIDDEN ACTIVATION ANALYSIS ON CONSTRUCTION TORT CASES IN HONG
KONG. In Economic and Social Development (Book of Proceedings), 24th International
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Civil Engineering Research, 5(2), pp.39-44.
Peng, L. and Stewart, M.G., 2016. Climate change and corrosion damage risks for reinforced
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Rameezdeen, R. and Elmualim, A., 2017. The impact of heat waves on occurrence and severity
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health, 14(1), p.70.
Safeworkaustralia.gov.au. 2019. Safeworkaustralia.gov.au. [online] Available at:
https://www.safeworkaustralia.gov.au/law-and-regulation/model-whs-laws [Accessed 23 Apr.
2019].
Westernsydneyairport.gov.au. 2019. Westernsydneyairport.gov.au. [online] Available at:
https://westernsydneyairport.gov.au/ [Accessed 24 Apr. 2019].
Wsaco.com.au. 2019. Wsaco.com.au. [online] Available at:
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f [Accessed 24 Apr. 2019].