Risk Management in Project Management

This report is designed for development of knowledge about different types of risks that are exposed to a project. It also emphasizes on the identification of different strategies or activities that should be taken into account for the management of these risks. This report will also focus on identification and analysis of project scope in terms of different stakeholders of the project.

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Risk Management in Project Management

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Table of Contents
Introduction................................................................................................................................3
Background Information about the Project:...............................................................................4
Scope of the Project:..................................................................................................................4
Risk Assessment Methodology:.................................................................................................5
Determination of the Acceptability of Risks:.............................................................................6
Details of the Project Team:.......................................................................................................6
Data Collection Approaches:.....................................................................................................6
Validation of the Data Gathered:...............................................................................................6
Participation and Communication Strategy for the Stakeholders of Project:............................7
Monitoring and Review Program:..............................................................................................8
Risk Assessment and Risk Management Template:..................................................................8
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
This report is designed for development of knowledge about different types of risks that are
exposed to a project. These risks will be assessed in context of development and operational
phases of a project. It also emphasizes on the identification of different strategies or activities
that should be taken into account for the management of these risks. This report will also
focus on identification and analysis of project scope in terms of different stakeholders of the
project. It will assess that how different stakeholders of the project will perceive the risks. In
addition to this, it will provide that what is the methodology that can be used for purpose of
risk assessment in the project. Apart from this, the report will provide details of the project
team. Final section of this report will facilitate information about participation and the
communication strategy and the analysis of monitoring and review program of the project.

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Background Information about the Project:
California High-Speed Rail (CHSR) project has been selected in this report. This project has
been planned for development of a high-speed rail corridor network connecting different
cities in California, USA. Example of different cities that will be connected by this rail
project includes Transbay Transit Center in San Francisco and Anaheim Regional
Transportation Intermodal Center in Anaheim. This rail project is anticipated to pass through
central valley. The speed of rails on this rail corridor will be approximately 350 kms per hour
(i.e. 220 miles per hour) (CHSR, 2018). Total number of tracks on this rail corridor will be
two, but four at the stations. The corridor sections of Los Angeles–Anaheim sections and The
San Francisco–San Jose will also be shared with the local trains in the country. It is
anticipated that initial operations segment of this project (between Bakersfiel and San Jose
Diridon Station) will be completed by end of 2027. Total number of stations on this rail
project will be 24 stations. This will help the population and residents of United States to
travel long distances in very less time as compared to conventional trains. Total budgeted
cost (current cost) of this project is $77 billion. But it is anticipated that cost of this project
will increase to $98 billion (NY Times, 2018).
Scope of the Project:
In general, the project scope can be defined as an important component of a project, as it
informs the potential stakeholders about different aspects related to the project. Different
elements of project scope include total project cost, deadline of the project, tasks of the
project, features of the project, deliverables of the project and the project goal. The goal of
this project is to facilitate high speed train services for the residents or people residing in
California and other parts of the United States. The goal of this project is also to reduce total
travel distance between two major cities of Unites States like Transbay Transit Center in San
Francisco and Anaheim Regional Transportation Intermodal Center in Anaheim. The

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deliverable of this project is the high-speed rail corridor in the California, USA. Features of
this project includes that there will be total 24 railway station on this project and it will
support high speed travel (CNBC, 2018). The speed of trains on this corridor is anticipated as
350 kms per hour. Example of tasks and activities that are part of this project includes
development of the project plan, approval from regulatory bodies of USA like parliament etc,
development of project team, tendering process, passing of the budget, land acquisition
process, development of land areas (civil work), development of corridors, signalling and
electrification works, development of ROBs and RUBs at different level crossings, hiring of
staff and administrative staff, training of the staff, marketing and promotion required in
project, inauguration of the project) (CHSR, 2018). The formal deadline of this project is
anticipated as 2027. But it is anticipated that this project will delay to 2031. Total official cost
of this project is $77 billion, but it is anticipated that this cost will increase to $98 billion.
In general, the project stakeholder can be defined as the individuals and business entities,
whose interest will be affected by success or failure of a project. Example of different
stakeholders of California High Speed Rail project includes the project staff, companies
working on projects under CHSR project tenders, people and farmers, whose land will be
acquired under the CHSR project, government and regulatory bodies, and the residents or
population of California, Unites States.
Risk Assessment Methodology:
In general, risk assessment can be defined as the process of identification of different types of
risks that are exposed to a project. The ‘5 step approach of risk assessment’ is the risk
assessment approach is selected for purpose of risk assessment in this project (Leoni et al.,
2015). According to this approach, there are different steps of risk assessment procedure such
as hazard identification, evaluation and prioritization, deciding prevention actions, taking
actions and the monitoring/ reviewing. The detail of these steps is as below:

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Hazard Identification: This is first step, in which the project manager focuses on potential
hazards that may affect the performance of current project in terms of timing of completion
and the quality and cost of completion. Example of different hazards or risk factors in this
project includes natural calamities like earth quake, cyclones and disasters, risk of cost over
run issue, risk of delay in project from planned dead line, risk of civil unrest, risk of delay in
budget, accidental risk at sites, legal and regulatory risk etc (Green, 2017).
Evaluation and Prioritization: Under this step, the different hazards or risk factors are
evaluated from the point of view of their impact on project performance and likelihood of
occurrence (Leoni et al., 2015). After evaluation of the risk factors, the prioritization is
developed for different risks according to need of mitigation need.
Decide Prevention Actions: Under this stage, the project manager and project team work for
development of risk prevention actions or strategies. Under this step, the risk management
activities are planned and it is also decided that who will be responsible for implementation
of which plan. In other words, this step involves the development risk management plan
(Kerzner and Kerzner, 2017).
Taking Actions: This is step, in which project manager works to implement the risk
management plan (Green, 2017). Under this step, the project team starts working on the
activities planned for mitigation of the project risks.
Monitoring and Reviewing: This is also an important step of the risk management plan in a
project. Under this stage, the project manager focuses on monitoring of performance of risk
management plan in the project. Example of different activities that help to perform this step
involves organizing meeting with project staff involved in execution of the risk management
plan.
The methodology of ‘What If Analysis Approach’ is also quite helpful in the risk assessment
in a project. Under this assessment methodology, the project manager focuses on

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identification of different threats or hazards that are exposed to a project. In this approach, the
what if questions are asked in order to know that what can go wrong with the project due to
uncertainty of the external world or external environment and what will the impact if such
instances happen with the project(Kerzner and Kerzner, 2017). It is very important for the
project team to use brain-storming technique for exploring different possible hazards or risks
that may occur in the future in the performance of current project. For this purpose, it is also
important for the project to think that what are the operations and processes in this project
that are exposed to higher level of risks and hazards while working on the project.
Stakeholders to the Project and How They Perceive Risks:
There are different types of stakeholders of this project such as project staff, companies
working on projects under CHSR project tenders, people and farmers, the land of whom
acquired under the CHSR project, NGOs and Human Rights organizations, government and
regulatory bodies, and the residents or population of California, Unites States. These
stakeholders will perceive the risks in this project in different manner. The risk of schedule or
delay in project is considered as a threat to the performance of project by the government and
regulatory bodies. It is so because with the passage of time, it is possible the political party in
power and government may change in the country (Lautala et al., 2015). The project may be
challenged, if the new government does not support the CHSR project in appropriate manner
in terms of budget allocation and regulatory permissions. At the same time, delay is
considered by partner companies like civil and construction companies, companies working
on different tenders under CHSR project is perceived as positive factor. It is so because they
would have greater amount of time for managing the works in more effective and efficient
manner, if external market factors affect their activities.
The key issues like risk of accidental incidents are perceived as an ongoing risk by the
companies working on CHSR or other similar projects. At the same time, NGOs and Human

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Rights organizations perceive this risk as a major risk and they oppose works of companies
that are exposed high risk of occurrence of accidental incidents and loss of human beings.
Risk of civil unrest is also perceived as a normal risk by most of stakeholders like people,
NGOs and regulators that are often faced in every country (Lautala et al., 2015). But the
stakeholders like companies working on different tenders under CHSR and the other project
team of CHSR perceive this risk as a dangerous risk, as this may hamper project performance
and can cause delay in project accomplishment from planned deadline.
Determination of the Acceptability of Risks:
Evaluation of the likelihood of occurrence of the risks and their impacts on the performance
and cost of project would help to determine, whether the risk should be accepted or not. The
risks that may lead to very high level of cost overrun to the project and its performance will
not be tolerable for the project stakeholders. In this context, the risks or hazards, the
likelihood of occurrence of which is very high have major impact on cost and project
performance as well as risk of human lives will be given high priority for prevention actions
(Kendrick, 2015). At the same time, risks with minor impact of project performance with
lower chances of occurrence may be given low priority in the development of risk mitigation
or risk prevention actions.
Details of the Project Team:
In general, the project team can be defined as the group of team members that are responsible
for performance of entire project. Project team of California high speed rail project consist of
different organizations, business partners and regulatory authorities like DB international
USA, California High-Speed Rail Authority (CHSRA) etc. at the same time, the chief
executive of this project is Brian P. Kelly. There is large number of permanent and temporary
project team members.

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Data Collection Approaches:
Under the risk assessment plan under CHSR project, the risk assessment data will be gathered
through use of different online and offline sources like industry reports, reports of non-profit
organizations, surveys, and the internet sources. The risk management team will be working
on the risk assessment work on this project (Lewis, 2015). This type of risk assessment work
is done at big level in the real-life project of CHSR project in California. In theoretical
aspects, the brain storming technique can be used and online sources can be explored for the
collection of data related to potential hazards and risk factors affecting the CHSR project.
Validation of the Data Gathered:
The validity of the data can be evaluating by contacting relevant staff of different
departments to which the data are belonging. At the same time, in theoretical aspects, the
validity of data gathered through data collection techniques under risk assessment process can
be cross verified through cross checking the original copy of data collection tools (Lewis,
2015). Apart from these, the validation of quality of the data can also be validated through
use of statistical software like MS excel and SPSS.
Participation and Communication Strategy for the Stakeholders of Project:
Participation strategy can be defined as the strategy that is designed for encouraging
participation of project members in different project activities. For this purpose of the official
meetings will be planned and organized with the project team members from time to time in
order to keep project team members updated about different incidents and events in the
project performance. In context of the risk assessment and risk management plan the project
staff relevant for these roles will be sent invitation to attend the risk management meetings at
CHSR project. The place or venue of such types of meetings will be developed in a way,
where different project staff or project team members can easily approach (Hornstein, 2015).

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For this purpose, the place or geographical areas are selected that have good connectivity and
at average distance to different project team members.
The communication strategy can be defined as the planning and selection different mediums
through which the communications with different project members will be made. In other
words, the communication strategy is helpful for the entire project team to stay connected
with each other. In absence of an effective communication strategy in a project, the
communication gap issue may emerge that is very harmful for consistent performance and
progress of the project (Binder, 2016). The appropriate mediums of communication under the
communication strategy are online communication, communication through email id,
communication through Whatsapp, communication through mobile phones and the
communication over official notice board. Apart from these, the communication about
different announcements about the project performance is also made through official website
of project.
The communication and participation strategies have been designed in this project for giving
opportunity to different staff to contribute in the decision making. The project team or
different staff working under the CHSR project can contribute their ideas over meeting places
or through sending emails to the email id of administrative staff. The staffs are always
motivated to give their contribution through emotional and motivational quotes over official
website of the CHSR project (Verzuh, 2015). In meetings also, the speakers or senior staff of
project always motivates the audiences and other staff members to show their talent by giving
the productive ideas for avoiding performance issues occurring in the performance of CHSR
project.
Monitoring and Review Program:
In general, the monitoring and review stands for the set of tasks and activities that are
planned and executed for purpose of tracking the progress of a project. In context of risk

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assessment and risk management plan it is important for the project team to organize time to
time the performance monitoring meeting with the relevant staff. The report on their
achievement should be gathered and their summary of comments on their achievement should
be obtained in this meeting (Hazır, 2015). The corrective actions should be planned and
initiated by upper level management of the CHSR project. This will help to achieve the
success in this project in terms of risk assessment and risk management.
Risk Assessment and Risk Management Template:

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(Source: See Exhibit 1)

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Conclusion
On the basis of above analysis, it can be concluded that risk assessment and risk management
plan is very important for effective and timely completion of a project. The monitoring and
review of performance are also important steps for ensuring success of a project. 5 step
approach of risk assessment is quite effective in order to implement effective risk
management plan in a project.

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References
Binder, J. (2016) Global project management: communication, collaboration and
management across borders. UK: Routledge.
CHSR (2018) California High Speed Rail Project. [Online]. Available at:
https://www.wsp.com/en-GL/projects/california-high-speed-rail (Accessed: 28 September
2018).
CNBC (2018) California's $77 billion 'bullet train to nowhere' faces a murky future as
political opposition ramps up. [Online]. Available at:
https://www.cnbc.com/2018/03/12/californias-77-billion-high-speed-rail-project-is-in-
trouble.html (Accessed: 28 September 2018).
Green, C. (2017) Competent authorities for the flood risk management plan–reflections on
flood and spatial planning in E ngland. Journal of Flood Risk Management, 10(2), pp. 195-
204.
Hazır, Ö. (2015) A review of analytical models, approaches and decision support tools in
project monitoring and control. International Journal of Project Management, 33(4), pp. 808-
815.
Hornstein, H.A. (2015) The integration of project management and organizational change
management is now a necessity. International Journal of Project Management, 33(2), pp.
291-298.
Kendrick, T. (2015) Identifying and managing project risk: essential tools for failure-
proofing your project. USA: Amacom.
Kerzner, H. and Kerzner, H.R. (2017) Project management: a systems approach to planning,
scheduling, and controlling. USA: John Wiley & Sons.

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Lautala, P.T., Haas, P.J. and Velat, J.L. (2015) High Speed Rail Learning System (HSRLS)–
Taking Advantage of Online Technologies in Railway Education. International Journal of
Transportation Science and Technology, 4(2), pp. 179-196.
Leoni, E., Dallolio, L., Stagni, F., Sanna, T., D'Alessandro, G. and Piana, G. (2015) Impact of
a risk management plan on Legionella contamination of dental unit water. International
journal of environmental research and public health, 12(3), pp. 2344-2358.
Lewis, S. (2015) Qualitative inquiry and research design: Choosing among five
approaches. Health promotion practice, 16(4), pp. 473-475.
NY Times (2018) $100 Billion Train: The Future of California or a Boondoggle?. [Online].
Available at: https://www.nytimes.com/2018/07/30/us/california-high-speed-rail.html
(Accessed: 28 September 2018).
Verzuh, E. (2015) The fast forward MBA in project management. Australia: John Wiley &
Sons.

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Appendix
Exhibit 1: Risk Management Template
Risk Name Likelihood of
Occurrence
of Risk
Degree of
Extent to
which it
affects
performance
of project
Who will be
responsible
Prevention
actions
Duration
Schedule risk
or risk of
delay
High High Project
manager and
chief
executive
Proper
planning of
the
scheduling of
project
activities and
reviewing
progress
2 months
Risk of cost
overrun issue
High High Project
manager and
chief
executive
Effective
allocation of
resources
over project
activities
3 months
Regulatory
risks
Medium High Chief
Executive
Performance
of all the
formalities
required by
regulations in
effective
manner
6-12 months
Natural
hazards
Medium High Project
manager and
chief
executive
Development
of risk
management
plan or
development
of plan B
4 months
Civil Unrest Low High Project
manager and
chief
executive
Development
of Plan B
3 months
Risk of
occurrence of
Accidental
Medium High Project
manager and
chief
Development
of accidental
prevention
1 month

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incidents at
site
executive plan and use
of accidental
risk
prevention
tactics
Budget delay High High Project
manager and
chief
executive
Tendering
the contracts
to private
companies to
avoid over
dependence
on regulatory
bodies for
budget in the
project
4-6 mnths