Risk Analysis and Mitigation of Sydney Metro Northwest Project

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Risk analysis and mitigation project
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Table of Contents
Introduction......................................................................................................................................3
Part A: Project Overview................................................................................................................4
Outline key features of the project based on research and interpretation of real-world data and
information..................................................................................................................................4
Overall budget of the project:..................................................................................................4
Social and economic rationale:................................................................................................4
Key Statistics:..........................................................................................................................5
Funding mechanisms:..............................................................................................................6
Stakeholders:............................................................................................................................7
Part B: Risk Analysis.......................................................................................................................8
Integrate qualitative and quantitative risk measures, with reference to theory, in order to
identify and evaluate potential risks to the project......................................................................8
Part C: Risk Mitigation Plan..........................................................................................................11
The risk mitigation plan is a plan developed by the project team for the purpose of reducing
the impact of the risks which have been identified and evaluated by the use of various
techniques..................................................................................................................................11
Conclusion.....................................................................................................................................14
References......................................................................................................................................15
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Introduction
Risk can be referred as a task or possibility which assumption to get success or change. The risk
can be beneficiary or disadvantageous for the structure of the organization. Risk analysis is a
process which helps to identify and troubleshoot the issues which affect the organizational
growth in a negative way. Risk analysis deals with the strategies which an organization
implements to reduce or remove the impact of risk. Risk mitigation is the step by step procedure
of the strategies which helps to manage the risk analysis. The risk mitigation includes different
methods to overcome the issues conducted by the risk. The Sydney metro northwest introduced
some new railway stations and car parking spaces. The main objective is to enhance the business
and provide facilities and comfort to the people of the city. The project contracts with the overall
aspects of the organizational work as it includes budget information and stakeholder
requirements. The report also contains the information about risk analysis and mitigation needed
for executive construction.
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Part A: Project Overview
Outline key features of the project based on research and interpretation of real-world data
and information.
The overall budget of the project:
The Sydney Metro Northwest project has an overall budget of $500 million for laying down the
metro service in Sydney (Nicholas, 2017). The project was set on a budget of $8.3 billion but
after constantly refining the project cost during the construction and because of good
management, the transport and infrastructure department was able to save a significant expenses
which they used later on for delivering the amount of $20 billion for Sydney Metro Expenses
(Koorosh, et al., 2018). The Sydney Metro trains would be covering up to 31 metro stations.
Around $1.15 billion contracts were awarded to CPB John Holland Dragons, and in this contract,
105 Km of steel rail was installed in the twin of 15 km tunnels between Bella Vista and Epping
and this is the longest railway tunnels to ever build in Australia. $340 million contracts were
awarded to the Impreglio-Salini joint venture covering four kilometres elevated sky train
between Bella Vista and Epping (Gharehbaghi, et al., 2015). The Northwest Rapid Transit
contract was awarded by $3.7 billion operating the delivering of eight railway stations, 4000
commuter car parking spaces and Sydney’s new metro trains. The Sydney Metro Northwest
covers these three major contracts in 2013 and 2014.
Social and economic rationale:
The social rationale refers to the type of decision strategy used in the contracts of social areas
including a set of rules which are to be applied in certain situations (Faiza, et al., 2016). The
Sydney Metro Northwest project has a significant impact on the community and the daily lives
of individuals impacting their way of work, connect with each other, live, play, etc. The Sydney
Metro Northwest project has the responsibility to act accordingly on the social rationale of the
project and the community. The social rationale also includes improvement in the daily
community life and encouraging future welfare and benefits (Nicholas, 2017).
The economic rationale refers to the rationale of reasons or decisions that impact the economic
decision. The Sydney Metro Northwest projects have the responsibility of using the money spent
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on the project must provide the maximum benefits to the people. The economic decision must
incorporate wider economic benefits and advantages to the project and to the residents and
customers.
The Sydney Metro Northwest project provides the benefit of reducing overcrowding in trains as
it has the ability to move approx. 46,000 people per hour, it consists more than 200 cameras for
the public safety, and the entry for the passengers are wide enough for wheelchairs providing
facilities for disabled (Gharehbaghi, et al., 2015). The Sydney Metro Northwest project has the
drawback that this project was started without the public consultation and there are fewer seats in
the train.
Key Statistics:
The scope refers to the area of which the subject matter deals with (Koorosh, et al., 2018). The
scopes of the Sydney Metro Northwest projects are as follows:
 To provide the means of faster travel for the public to save their time.
 To provide less crowded trains and stations for public comfort in their daily life.
 To uplift the living standard of the people.
 To change the people way of moving in the city and improve the daily life activities of the
people.
 To provide better connectivity and interchange capacity.
 To boost the opportunity of jobs and support to the growth of economic productivity.
 To encourage regional development.
 To improve the quality of service and safety of the people.
 To improve sustainability by reducing social disadvantage.
The budget estimated of the Sydney Metro Northwest is $500 Million for completing the project.
The project consists of three major contracts covering tunnels and station civil works, surface
and viaduct civil works and operations, trains and systems. These three major contracts consist of
$1.15 Billion, $340 Million and $3.7 Billion of the overall budget (Faiza, et al., 2016).
The Sydney Metro Northwest project required the time of 2024 for the completion of the whole
project by covering 66 KM in Sydney and increasing the network capacity by 60%. The first half
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of the project was completed in 2019 by connecting Sydney’s north-western suburbs to Chats
wood. The second half of the project is expected to complete in 2020 by covering about 16.5km
from Chat woods to Sydenham, and in the second half, the metro train will cover seven metro
stations.
The key construction elements of the Sydney Metro Northwest project are as follows:
 Installation of track slab.
 Installations of railway tracks.
 Installation of cables.
 Installation of equipment such as electricity, signalling and communication equipment.
 Installation of overhead wiring.
 Installation of fire hydrant system and ventilation systems.
The Sydney Metro Northwest project includes Construction Environmental Management
Framework to ensure that environmental stability. The framework pays attention to the following
sectors:
 Waste management.
 Soil and water quality.
 Greenhouse emission.
 Air quality.
 Management of flora and fauna.
 Material management.
This factor benefits the environment by reducing those activities that affect the stability
of the environment.
Funding mechanisms:
The funding mechanisms states about the purpose of funds and government policy of funds set
for the organizations (Faiza, et al., 2016). This refers to those sources through which the funding
process of an organization is carried out. It includes bank loans, sales revenues, reserves and
savings of an organization. The Sydney Metro Northwest was allocated about $314billion fund
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by the government for the progress of the project. This fund is estimated across different sectors
of the projects consisting of tunnels installation, wiring, cabling, electricity service and railway
tracks installation. The Sydney Metro Northwest projects seek funds for the progress of the
project from NSW Government.
Stakeholders:
Stakeholders are referred to those who consist or have a certain amount in the total share of the
organization (Koorosh, et al., 2018). The stakeholders have the ability to affect the organization
but also have the disadvantage of getting affected by the organization.
Stakeholders could be in the form of creditors, directors, owners or community. The Sydney
Metro Northwest projects also include key stakeholders for the progress of the project. The key
stakeholders of the projects are the local government, NSW (New South Wales) government and
Australian Government departments and industry associations.
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Part B: Risk Analysis
Integrate qualitative and quantitative risk measures, with reference to theory, in
order to identify and evaluate potential risks to the project.
Risk is inevitable in the contrast of the company as it is natural for the organizational structure to
face risk as the risks are the key factors to update the system or advance the technologies. The
risk can differ accordingly. The potential risk is a connection with the working or the
departments of the risk (Weber, et al., 2012). The potential risk depends on the circumstances
and situations of the company process. The potential risk can include financial risk or breach. It
can also be understood by the operational risk as if the employment functionality gets negatively
affected. This is some examples of potential risk, and the risk analysis helps to deal with the
risks. Risk analysis is a very important part of the management of project or organization. But to
implement a good risk analysis, this is necessary to understand and determine the risk. The risk
analysis can be done by the use of these methods:
Qualitative Risk Analysis: Qualitative risk analysis is a method of risk analysis which identifies
the risk of a specific hazard. This method of risk analysis works on the process of probability and
consequences. Basically, this method conducts the assumption that estimated risk can occur
while working. This is a process of analysis which does not include mathematical figures. The
probability on which this method works is the assumption which helps to understand the prospect
of the hassle whether they are high or low (Lim, et al., 2012). This is the most popular and used
method in projects.
Quantitative risk analysis: The Quantitative risk analysis refers to the analysis which contains
the numerical and conceptual format of analysing the problem. This method uses some
mathematical and theoretical process to determine the risk analysis. This method does not work
on the estimated or probabilistic assumption whether it helps to determine the number of Risks
Company will have to face (Helgadottir, et al., 2015).
Risk matrix
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The risk matrix is a concept of risk analysis which helps to analyze both the probabilistic and
real number of risks which an organisation has to handle. This can be a very important and
effective tool for any of the organization to gain growth (Goerlandt, et al., 2015). This helps to
examine the risk and also determines some strategy to overcome the issues.
Risk matrix process: The risk management plan helps to analyze the probability of risk as per
the sequence of risk significance — the steps to implement the risk management plan.
Step 1: Recognize the risk
To make the risk matrix this is most necessary to understand the risk and their assumptions. To
build the matrix, the determination of risk helps to identify and elaborate on the structure to build
the procedure (Alali and Yeh, 2012). The risk assumption can be from low to high or high to
low, but here the assumption is from high to low.
 Financial risk: Lack of cost efficiency
 Social risk: Lack of popularity
 Management risk: Unbalanced management of the organization
 Operational risk: Unavailability of operational structure.
 Strategic risk: Increased competition
These are some certain departments of organization which affects the risk.
Step 2: Define the risk principles
The risk criteria or the risk assumption is necessary to define properly. As the risk can be defined
as per the different organization in case of Sydney metro northwest the higher prioritized risk is
the financial risk as it is a very big project and needs to have a good cost to be used ( Greenberg,
et al., 2012). So it can be stated that this is the most likely factor which affects the organization.
While determining the risk, this is also necessary to understand the criteria of a specific
department.
Step 3: Assess the risks
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To determine and maintain the structure of risk this is necessary to understand the arrangement
of the risk. To analyse and accomplish the risk this is necessary to estimate the risk criteria. To
assumption the actual criteria of risk the thing which is needed is to use the risk analysis methods
which gives the estimated value about the risk factor.
Step 4: Prioritize the risks
An increased and sustainable organization can face a different type of risk, and all the risk are
not necessary to have the equal and same effect on the organizational structure while maintaining
the risk matrix to make a perfect balance this is must identify the risk priority as the specific
priority helps to determine and understand the risk. In the context of Sydney metro northwest,
the least risk company have to deal with is strategic as the organization had built some good
strategies to compete with the real world (Farnocchia, et al., 2013).
A B C D E
Negligible Minor Moderate Significant Severe
E Very likely Low medium Medium Medium
high High High
D Likely Low Low medium Medium Medium high High
C Possible Low Low medium Medium Medium high Medium high
B Unlikely Low Low medium Low
medium Medium Medium high
A Very
unlikely Low Low Low
medium Medium Medium
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Part C: Risk Mitigation Plan
The risk mitigation plan is a plan developed by the project team for the purpose of
reducing the impact of the risks which have been identified and evaluated by the use
of various techniques.
The project management team focuses on eliminating the risks in the following way:
Risk avoidance involves the development of an alternative strategy which is having a higher
probability of success but includes a higher cost. The major risk avoidance techniques are to use
existing and proven technologies instead of adopting new techniques.
Risk sharing involves getting in partnership with others for the purpose of sharing risky
activities. While working on an international project the project management team can reduce the
political, legal, labour and other types of risks associated with the plan by getting into a joint
venture with the organization which is located in that country.
Risk reduction is the process in which the project management team invests funds to reduce the
risks associated with the project. The project manager can hire an expert in order to get a review
of the technical plans and cost estimation of the project. Assigning highly efficient project
management teams for high risks activities also helps in the reduction of risk. A high-level
efficient project management team can easily predict future problems and can take steps to
prevent uncertain situations arising in the future (Kjølle, et al., 2012).
Risk transfer is a method that can be considered as a part of risk reduction. In this method, risks
are reduced by transferring the risk from one party to another. One of the significant ways of
transferring risk is taking insurance. This transfers the risk to insurance companies for incurring
of loss due to any kind of activities covered under the insurance contract
The project risks that need to be addressed are a financial risk, social risk, management risk and
operational risk. Financial risk is the lack of cost efficiency in the organization. This can be
mitigated by proper evaluation of the project. This will help the organization to get an estimation
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of required financial resources for the successful completion of the project and can assign
required funds for the project.
Social risk is the risk which is related to lack of popularity. Social risk affects the project as with
lack of popularity the project management team will face issues in arranging required resources
which includes raw materials, manpower etc. This can be removed by making people aware of
the organization and the project which is going on (Cross-Disorder, 2013). Management risk
causes issues as without proper management a project cannot be completed successfully.
Unbalanced management of the organization can be removed by assigning a proper project
manager having proper managerial skills. Operational risk is the risks related to the
unavailability of operational structure. It can be mitigated by developing a proper operational
structure for the project which can be followed by the project management team (Bhandari, et al.,
2015). Strategic risk is the risk which is related to strategy development. There is no requirement
for the mitigation of strategic risk because strategies are prepared after proper evaluation and
there are very fewer chances of strategy getting failed, and if a strategy fails, then it will lead to
the development of the new strategy.
Risk Evaluation
Risk mitigation strategy refers to the steps which are followed by an organization in order to
reduce the adverse effects on the organization. These strategies are formulated so that the
organization would be able to protect itself from any adverse risk or effects. Part A states briefly
about the Sydney Metro Northwest project and data and information of the project (Ripke, et al.,
2013). Part A includes overall budget, benefits, drawbacks, scope, estimate time required, key
construction elements, funding mechanism and stakeholders of the projects. All these elements
help the organization to create risk mitigation strategies. Part B states the risk analysis of the
project. The risk analysis of the project is carried through qualitative or quantitative risk analysis.
These analysis helps to predict future risks and protect themselves from that risk with appropriate
measures. The risk mitigation strategies are formulated by analysing the overall projects and risk
analysis. The risk mitigation analyse the overall budget so that there would be no risk related to
the budget of the Sydney Metro Northwest project. The risk mitigation strategies are formulated
to overcome the risk of the Sydney Metro Northwest project by analysing financial risk, social
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