Quantitative Risk Assessment and Risk Management of a Large Transportation Project

Government agencies, including those responsible for transportation, are beginning to adopt the use of modern project management techniques which incorporate risk management. In particular, for large transportation construction projects, quantitative risk management is being utilized as an optimal process. Quantitative risk management involves quantitative (i.e. probabilistic) risk assessment in addition to risk response. Probabilistic risk assessment of a project takes into account all significant uncertainties that affect project performance. It replaces point estimates of overall cost and schedule with probability distributions. Moreover, probabilistic risk assessment provides diagnostic information regarding which risk events have the most potential impact on cost and schedule. This information can be used to improve project management by exerting project controls on certain key activities. In this paper we describe the results of a fully probabilistic risk assessment of a large highway construction project currently being undertaken by Saskatchewan Highways and Transportation (DHT): Highway 11 Twinning. One of the major findings of this risk assessment was that property purchase along the right-of-way was a major issue on the first construction phase of the project. Delays produced by purchasing properties in both towns and rural land for Highway 11 resulted in DHT paying contractual penalties for grading and paving due to a delay in commencement in construction of an entire year. For the second and subsequent phases of construction, risk mitigation is being applied by initiating ROW negotiations up to two years in advance of grading and paving tendering.