North East Link Project: Risk Analysis and Mitigation Plan for MBA643

This report provides a comprehensive risk analysis and mitigation plan for the North East Link project in Melbourne, Australia. It begins with an overview of the project, including its budget of $15 billion, benefits such as reduced travel times and increased job opportunities, and potential drawbacks like traffic disruptions and environmental impacts. The report outlines key statistics related to the project's scope, size, and estimated costs. It identifies key stakeholders, construction phases, and funding mechanisms, primarily from the State Government and toll revenues. A detailed risk analysis is conducted, employing both qualitative and quantitative methods to identify and assess potential risks across various categories, including technical, financial, scope, people, climate, environment, transport, waste management, noise pollution, social impact, project management, and legal risks. The report concludes with a risk mitigation plan, ranking risks by severity and proposing specific response plans for each identified risk, aiming to minimize negative impacts and ensure project success.

Table of Contents
1. Project overview................................................................................................................2
1.1. Overall budget..................................................................................................................2
1.2. Benefits............................................................................................................................2
1.3. Drawbacks.......................................................................................................................2
1.4. Key statistics....................................................................................................................3
1.4.1. Scope and size..................................................................................................................3
1.4.2. Estimated cost..................................................................................................................................3
1.5. Key stakeholders..............................................................................................................4
1.5.1. Key construction phases...................................................................................................................4
1.5.2. Environmental costs/benefits...........................................................................................................4
1.6. Funding mechanisms........................................................................................................5
2. Risk analysis......................................................................................................................5
Potential risks...............................................................................................................................5
3. Risk mitigation plan.........................................................................................................11
References................................................................................................................................18

1. Project overview
North East Link will start on Eastern Freeway at Springvale Road to M80 Ring Road at
Greensborough. It is of 11 km in length and resolves the missing link between Eastern
Freeway and Greensborough. It handles around 100,00 vehicles every day.
1.1. Overall budget
The total cost of the proposed Link is %15 billion dollars. It includes 11.9 billion dollar of
Real P50 and 12.7 billion dollar of Real P90 (Northeastlink.vic.gov.au., 2019).
1.2. Benefits
The link will prove to be beneficial with respect to productive businesses, competitive supply
chains, economic growth, prosperous households and liveable neighbors. The proposed North
East Link project provides following benefits:
 Reduce the travelling time by 30 minutes between Melbourne’s north and south-east.
 It will remove 15,000 trucks from the local roads.
 Businesses in north east will have access to 62,000 more workers.
 Because of business clustering, productivity will increase by 590 million dollars.
 Local industry and economy will get boost because of soother transportation.
 Provide access to the educations to residents of North East.
 56,000 more job opportunities shall be accessed by the workers of North east.
 People will get a chance for walking and cycling.
1.3. Drawbacks
Such a big project cannot be made without any undesirable impacts. The construction will
have adverse impacts such as disruptions in traffic, emission of dust generated from removal
of spoil, increase in noise level and vibration level, visual impact and restricted access to
facilities. It will also affect the waterways.
North east is a big construction project and since it acts as a link between two areas then there
shall be a need to acquire some residential areas of northern Lower Plenty Road for
construction tasks. Many residents of these areas will have emotional attachment with their
properties and local community. Hence, they must be reluctant and impacts will be very
higher than expected. The whole construction event may be very stressful to them and finding
an alternative to their residential property may be even more challenging.
The construction activities may result in increasing the noise level because of upgraded or
new structure of roads. They may have higher traffic volumes. To combat with this, noise

modelling shall be done to establish mitigation requirements of noise. New noise barriers will
be installed to mitigate the enhanced noise level to obtain necessary noise levels.
These stated and potential longer impact shall be discussed during the environmental and
planning phase which will also figure out the measures to avoid, transfer or mitigate negative
impacts. A set of EPRs i.e. Environmental Performance Requirements shall be defined for
the project to provide a minimum number of environment outcomes. The project needs to
ensure that it achieves them with respect to design, operation and construction.
1.4. Key statistics
1.4.1. Scope and size
 Construction of new 11 km roadway between Eastern Freeway and M80 Ring at
Greensborough
 Upgradation of M80 Ring Road between Greensborough and plenty road
 The roadway will go into longest tunnel of Victoria.
 M80 Ring Road will be upgraded between the Greensborough and Plenty Road.
 The roadway will transition into a new structure which goes in north towards
Koonung Creek in order to connect the Freeway.
 A dedicated bus lane will be constructed for uninterrupted path for buses
travelling between central city and Doncaster.
 The road will provide interchange service at Mannigham road, Bulleen road,
Grimshaw street and M80 Ring Road.
1.4.2. Estimated cost
The total cost of the proposed project was calculated using past project experiences
which were developed by NELA. It uses the concept design of the North East project
as the base to form the entire capital expenditure of project.

1.5. Key stakeholders
North East construction project has following stakeholders:
 Bus corporation
 Public
 State government
 NELA
 Construction project team
1.5.1. Key construction phases
Following are key phases of the proposed construction project:
 The first phase will include the approvals on planning report from North East Link
Project. The information regarding the approvals shall be submitted by
Environment Effects Statement (EES) which is the most transparent process of
Victoria. The EES project will be completed within 30 days of 1st quarter of 2019.
 The construction of North East Link will be constructed during 2020. The world
will witness the investment of 200 Million Billion dollars in initial work.
 The North East Link shall be open for commuting by 2027 (North East Link -
Business Case Key findings May 2018, 2018).
1.5.2. Environmental costs/benefits
The construction will be having some negative impacts on the environment such as
enhanced noise level and moving of residential population. The nose level can be
managed through noise controlling barriers but the shifting of locals may lead to
emotional trauma in residing community.
1.6. Funding mechanisms
The budget shall be majorly funded by the State Government. The revenue generation
will be done through tolling charges received from the commuters. The amount of toll
will be calculated through detailed modelling. The calculation will also take of tolls
having similar rates on other similar roads. 22% funding shall come from tolls and State
government will contribute the rest of the funding.
2. Risk analysis
Qualitative analysis
It is a type of risk assessment which primarily analyses risk based on the risk matrix table and
calculates it based on the severity of impact and the probability of occurrence. This is

depicted below in the chart. The risk matrix is shown towards the left-hand side of the chart
and its severity of impact and probability are towards the right side of the chart (Holmes,
2002).
Quantitative Analysis
Wherever possible, qualitative analysis is a must and should always be executed. This
includes things such as decision trees, sensitivity analysis, statistical analysis and this
includes Expected Monetary Value (Jordão and Sousa, 2010).
Potential risks
The risks have a score assigned to them and they are identified below:
Risk matrix
Risk category Risk
description
Impact Probability Severity
Risk of
Tunneling
Tunneling could
introduce geo-
technical as
well as
construction
related risks.
Medium Medium Medium
Financial The project
would a part of
the tunnel that
increases risk
associated with
construction
while also
involving
financing and
capacity related
risks.
Very High High Extreme
The cost for the
project may end
up increasing.
As such, the
Medium Very Low Medium

estimated O&M
overheads are
based on
forecasting of
traffic and if
there is an
increase in
traffic then the
cost for the
project would
also increase
(Krause, 2006).
Scope Complexity of
the project may
also result in
changes of the
scope which
ultimately leads
to an increase in
cost associated
with the project
High Medium Medium
People Issues among
stakeholders
High High Extreme
Disagreement
among the
members of the
team
Medium Low Medium
Climate risk There are other
natural hazards
that may occur
such as
excessive rains,
flash floods and
Medium
(Valsamakis,
Vivian and Du
Toit, 2010)
High High

earthquake
resulting in
damaged roads
and this could
affect
transportation
of raw materials
and other things
to the
construction
site.
Environment
risk
Each construction
poses a
significant risk to
the environment
and this Tunnel
project even
more so. There
could be
hazardous waste
that may be
released resulting
in damaged water
and ecological
balance in the
area (Vaughan,
2009)
High Very High Extreme
Transport Risks The current
infrastructure
will get
degraded as and
when the traffic
is being routed
in the
construction
Medium Low Low

phase.
Also, while
carrying raw
materials,
there’s also a
chance that it
may get spilled
during the
transportation.
Very Low High Medium
Managing waste
risks
The
construction
may result in
over usage of
materials which
may result in
depletion of
natural
resources in the
area.
Very low Medium Medium
Along with the
above,
construction of
such a tunnel
may result in
excessive
amount of
waste
generation in
both solid,
semi-solid and
liquid form.
High High High
Noise pollution Any Medium Medium Medium

risks construction
activity
generates noise
and this is no
exception.
Nearby
residents,
workers and
commuters may
complaint about
noise pollution.
Social impact As mentioned
earlier, there
would be
release of
smoke and dust
from the
construction
site. These may
impact the
environment
negatively and
increase air
pollution.
High Medium Low
Project
management
risks
There are
operational
errors
associated with
the project and
it may happen
during the
project’s
execution.
Medium Medium Medium

Legal risks Legal
obligations –
Legal
formalities
being
prescribed are
not being
followed.
Very Low High Medium
The risks that has been identified using qualitative analysis, will now be analyzed using the
method of quantitative method which will result in expected monetary value. The form which
are being used is given in the below given table. A formula would be used and they are given
in the below mentioned table. The calculations which are performed is prepared assuming
project has approximately 10% of contingency which nets to $1.5 Billion.
3. Risk mitigation plan
The risks are ranked as per the severity level of the risks. It can be identified from the
following table that risks which are required to be given high importance are those having
rank 1.
Risk category Risk Risk rank Responsibility Response plan
Technical risk Tunneling
could introduce
geo-technical as
well as
construction
related risks.
5 Construction
manager
Mitigate: This is
not possible to
avoid in any way,
hence industry
experts must be
communicated to
reduce
environmental
related disasters.
Financial The project
would a part of
the tunnel that
1 NELA Avoid – This
requires pessimism
as there should

increases risk
associated with
construction
while also
involving
financing and
capacity related
risks.
always be a certain
amount of budget
kept aside for
uncertain times.
Inputs that
Inputs should be
taken from
resources having
experienced in
similar project is
their past and
who can handle
the estimation
more accurately.
The cost for the
project may end
up increasing.
As such, the
estimated O&M
overheads are
based on
forecasting of
traffic and if
there is an
increase in
traffic then the
cost for the
project would
also increase.
6 NELA Avoid – A
pessimistic
approach should be
followed to
estimate the funds
and keep the funds
aside. The
calculation of funds
should be based on
inputs from experts
who have
experience in
related projects
Scope Complexity of
the project may
also result in
4 Project manager Avoid: The
higher level
management

changes of the
scope which
ultimately leads
to an increase
in cost
associated with
the project
needs to take
regular reviews
and reports in
order to identify
any chance of
scope creep and if
it does happen
then appropriate
corrective
measures must be
deployed.
People Issues among
stakeholders
1 Project manager Mitigate:
When
stakeholders are
dissastified with
all or some
requirements for
the project then a
discussion panel
should be
organized and
based on the
consensus the
requirements
should be
developed. These
should then be
included in the
scope of the
project.
Disagreement
among the
4 Project manager Mitigate: If there
are any conflicts

members of the
team
between any
parties then the
manager should
take appropriate
measures and
essential steps to
reduce via
meetings and
discussions etc.
Climate risk There are other
natural hazards
that may occur
such as
excessive rains,
flash floods and
earthquake
resulting in
damaged roads
and this could
affect
transportation
of raw
materials and
other things to
the construction
site.
Medium Project manager
and NELA
Avoid – This
particular risk can
be significantly
avoided with the
help of essential
action plan to
help project
infrastructure
design such that
damage occurring
because of these
natural risks can
be reduced. .
Environment
risk
Each
construction
poses a
significant risk
to the
environment
and this Tunnel
1 State
government
Avoid – A
meeting with
state government
and
environmental
panelists could
result in an

project even
more so. There
could be
hazardous
waste that may
be released
resulting in
damaged water
and ecological
balance in the
area
alternate solution
to reduce this
environmental
risk.
Transport Risks The current
infrastructure
will get
degraded as and
when the traffic
is being routed
in the
construction
phase.
4 Project manager Mitigate –
A meeting with
state government
and transportation
panelists could
result in an
alternate
transportation
solution to reduce
this transportation
risk.
Also, while
carrying raw
materials,
there’s also a
chance that it
may get spilled
during the
transportation.
6 Project
manager,
environmentalist
Mitigate –
Environmentalists
needs to be
contacted in order
to figure out an
action plan for
removing the
materials that has
been spilled.
Managing
waste risks
The
construction
7 Project
manager,
Avoid – A
meeting with

may result in
over usage of
materials which
may result in
depletion of
natural
resources in the
area.
environmentalist state government
and panelists
could result in an
alternate solution
to find alternate
safe areas to
release
contaminants
Along with the
above,
construction of
such a tunnel
may result in
excessive
amount of
waste
generation in
both solid,
semi-solid and
liquid form.
2 Project
manager,
environmentalist
Avoid – A
meeting with
state government
and transportation
panelists could
result in an
alternate
transportation
solution to find
reduce both solid
and semi-solid
and liquid tastes.
Noise pollution
risks
Any
construction
activity
generates noise
and this is no
exception.
Nearby
residents,
workers and
commuters may
complaint about
noise pollution.
5 Project
manager,
environmentalist
Avoid – Advance
meetings should
be held with the
environmentalists
and state
government to
figure our
alternate ways of
managing noise
pollution
Social impact As mentioned 4 Project Avoid – A

earlier, there
would be
release of
smoke and dust
from the
construction
site. These may
impact the
environment
negatively and
increase air
pollution.
manager,
environmentalist
meeting with
state government
and
environmental
panelists could
result in finding
ways to reduce
air pollution.
Project
management
risks
There are
operational
errors
associated with
the project and
it may happen
during the
project’s
execution.
5 Project manager Avoid – The
senior
management
should take
interest and be
attentive in
reviewing the
reports and
progress to
reduce any issues
associated from
their end such as
operational errors
and risks.

Legal risks Legal
formalities
being
prescribed are
not being
followed.
8 Project manager Avoid –
Confirmation
needs to take
from the project
team as well as
NELA to
understand
whether
approvals have
been received
before taking the
project.
References
Holmes, A. (2002). Risk management. 1st ed. Oxford, U.K.: Capstone Pub., pp.12-19.
Jordão, B. and Sousa, E. (2010). Risk management. 2nd ed. New York: Nova Science
Publishers, pp.20-23.
Krause, A. (2006). Risk management. 1st ed. Bradford, England: Emerald Group Publishing,
pp.14-17.
North East Link - Business Case Key findings May 2018. (2018). 1st ed. [ebook] Melbourne:
North East Link, pp.3-8. Available at:
https://northeastlink.vic.gov.au/__data/assets/pdf_file/0006/309174/
NorthEastLinkBusinessCaseKeyFindings.pdf [Accessed 20 Apr. 2019].
Northeastlink.vic.gov.au. (2019). Business Case. [online] Available at:
https://northeastlink.vic.gov.au/publications/businesscase [Accessed 20 Apr. 2019].
Valsamakis, A., Vivian, R. and Du Toit, G. (2010). Risk management. 1st ed. Sandton:
Heinemann, pp.12-16.
Vaughan, E. (2009). Risk management. 1st ed. New York: John Wiley, pp.11-13.