Risk Analysis and Managements- Large EPC ProjectsPalla Narasimhudu

L&T HEAY CIVIL INFRA I/C, CMRL UG Project, Chennai-10, Contact No. +919677124913, pallanara@lntecc.com

The demand for scientific management in different types of projects is constantly increasing, especially for project base organizations, Engineering, Procurement and Construction (EPC) projects have become one of the more popular methods of project execution by both clients and contractors. Risk Management, one of the critical concepts of project management is interesting to focus on because of its advantages and capabilities.Utilization of Project Risk Management methodologies, especially in large EPC projects can lead to huge advantages on all aspects of projects’ development. It can also be implemented as the main reference and basis for bidding, tendering and execution (including cost, time, resource, and quality management).By risk identification, assessment and control, probable gaps between estimated and real cost, time, and quality of projects can be prevented or decreased. This approach also provides facilities to predict the final cost and end dates of projects with a greater level of confidence.

IntroductionFor a complex mega infrastructure project like construction of underground metro rail construction, risk assessment should be mandatory during the conceptual and feasibility phase of the project. For effective risk assessment, proper investigation and identification of the sources of risks need to be carried out by the risk management team. These risks can be assessed or measured in terms of likelihood, impact and consequences.The most appropriate way of dealing with the project risk is treating it as a function of likelihood and impact [Risk = f (likelihood, impact)]. Finally, as risk is a component which cannot be eliminated, suitable risk mitigation measures are to be suggested which will enable to reduce the identified project risks.The major activities of the underground metro construction consist of feasibility studies, design, traffic diversion, utility diversion, survey works, diaphragm wall works, soil and rock excavation, construction of decking, steel struts, waterproofing, permanent structure works, mechanical and electrical installations and backfilling and restoration works. The responses from the experts have been obtained through a questionnaire survey and the consistency of the responses has been ensured through Delphi technique.

Case StudyDetails of the project of underground metro rail taken as case study for Project Risk Analysis and Management is described as below:

Scope of work: Design and construction of Underground Stations at Nehru Park, KMC and Pachaiappas College and Associated Tunnels- UAA-04

Client: Chennai Metro Rail Limited (CMRL) Contractor: L&T SUCG JV Consultant: EMBYE Consortium Type of contract: Engineering Procurement and Construction (EPC) Contract Period : Feb-2011 to Nov 2015 Total project cost: Rs. 958 Crores

Figure 1. Elevation of UAA-04 Project

Identification and Classification of Risks Involved in Construction of Underground Metro Station

The risks identified at each phase of the project and its subsequent work packages and activities are classified as

follows:

Feasibility Project Risk Pre execution Project Risk – Design Risks Pre execution Project Risk – Technology Risks Execution Project Risk – Risks in traffic diversion works Risks in utility and traffic diversion works Risks in survey works Risks in diaphragm walling works. Risks in soil and rock excavation works Risks in construction of decking and steel struts installation Risks in tunnel mining and cross passage Construction Risks in instrumentation and monitoring of existing structures along the tunnel alignment Risks in permanent structure works Risks in mechanical and electrical installation works

Similarly for Feasibility, Design, Development and Execution Phase, tables have been formulated for identification of the risks involved in the respective work. Considering all the work packages, the major type of risks identified for the underground metro project can be grouped and listed as follows: Delay in Approval of Detailed Project Report Environment Related Risks Land Acquisition risks Geo-technical Risks Design Risks Major / Minor Accidents during Execution Technology Selection Risks Unforeseen Heavy Rains Approval and Permit Risks Force Majeure Risks like Flood, Fire, Earthquake Joint Venture Risks Labour Agitation and Strikes Financial and Investment Risks Inflation Risk Political Risks Currency/ Commodities fluctuation

Some of risks encountered and their analysis and mitigation and further planning for avoiding future occurrences are adopted which is illustrated in case study as below:-

1) Risks involved in Charted and Uncharted Utility Diversion at Nehru Park Station:

As per tender only four major wet utilities were to be divert to start the work, but during trail pit we found four more uncharted and essential utilities and all were crossing across the centre of the station box area and diverting it was a bigger challenge for both charted and uncharted, required approval on every occasion after identification and that too within the given timeframe. There was no extra time allotted for the uncharted utilities in the project detailed programme. That meant the utilities were to be diverted along with the main works parallel with no extra time

The risks involved in the diversion are as follows:-

Execution Risks- D-wall program and progress depending on the diversion ,all utilities were passing through one location and crossing across the station box and after diversion, the utilities were to be hang and protect in course of roof slab excavation.Because of the nature of the job, few contractors are available for doing this job, site conditions are dynamic and connected to progress of D-wall construction, availability of those contractors for that time was the risk, and if they are not available our program might be stretch

Adopted risk elimination/mitigation methods:

With the help of CMWSSB, BSNL, TNEB authorities, prior information to affected public and planned in non-peak hours.

Space constraint, forced to plan introspect ourselves and comes with the solution of inter displacement and interchange, accordingly D-wall construction was adopted. We identified and trained one team to take off the diversion works internally reduce the contractor dependency risk

Risk Likely Consequences ActionTrial Pits Damage of utilities

Harm to WorkmenProblems to Public

Used Utility Identification InstrumentsProper PPEInvolved Local Authorities

Uncharted Utilities other than tender drawings

Delay in overall program

Re-programmingRevising the different activities involving utilities

Space Constraint Affect main activitiesDifficulty in managing the diversion planning

Inter displacement/ Inter change of utility linesRe-planning the sequence of D-Wall activities

Approval and Permit Activity may delay Submission of drawings and proposal for both charted and uncharted utilities just after identification and following up on regular basis with clients for its prompt approval

Shortage of Specialized agencies

Delayed start of work Developed utility team so that we need not approach external contractors’ every time when there is a need

Availability of materials

Increased CostSudden RequirementsGreater Expense

Pre-planning of exquisite materials well in advance

Change in Alignment due to erroneous layout

Delay in executionRework

Checking the layout in beginning before start of workImparting training for a better understanding of drawings and layouts

Utility Damage Affect other activitiesNeed to repair/ bring new pipesAdditional Cost

For heavy/ bulk material handling, imparting training for workmen and site personnel’sA method statement/ SOP to be followed for the procedures involved to avoid any damage

2) Risks involved in Traffic Diversion at Nehru Park Station

Approval and Permit Risks- Delay in Approval from the Clients/ Traffic police led to the start of the work a month later than the actual planned. Had there the approval been granted on time, the site works and traffic diversion works be started on time. Land Acquisition Risks- The permission for land acquisition was granted in the very beginning of the project during DPR submission but at later stage the traffic diversion plan changed due to site constraints like Change in D-Wall Construction sequence and hence for speeding up the site overall progress, the two stages traffic diversion was merged into one which carried away the risk of completing the other works in time. The proposal of land acquisition for the revised plan was submitted and the delay in taking over the land by the local authorities delayed the construction of road and thereby traffic diversion. The time which was saved in merging the two stages into one got recompensed with the delay made in land handing over by the clients.

3) Design Change for Diaphragm Walls at Pachaiappas College Station

There was a change in the alignment of the entire station due to the agitation from the Pachaiappas College, where most of the station parts lies inside the college land with green vegetation and so many well grown trees. Later, Client- CMRL decided to shift the alignment adjacent to the college land carrying no environmental distractionThe entire decision making on the revised alignment of land took six months and eventually, the station construction started after six months

Figure 2. Layout for Utility Diversion- Nehru Park

At beginning stage we designed and planned the programme with two TBMs, where sufficient buffer was there to complete 7.0 km tunnel work. Tunnelling work started from Nehru Park to Egmore, but due to unforeseeable circumstances encountered due to hard soil strata led to double the time than planned. To catch up with the delay made due to hard strata, clients asked us to bring an additional TBM.Before starting construction activities, Land acquisition, provide service roads and Traffic diversion, utility identification and diversion are related to stakeholder wishes and needs also dragged us a little bit.All these concerns made us to re-evaluate the progress for speeding up the activities

Risk Likely Consequences ActionChange in Alignment of entire Station

Delayed start of activitiesIncreased Scope of work

Revised layout submissionElimination of struts at Base level by modified design for D-Walls

Design change of D-Walls Change in Construction sequencesAdditional CostAdditional time and Resources

Revision in the Excavation sequencesExcavation without Strut- region in side station box carried out with special care by excavating to a maximum stretch of 12 m

Excavation without Strut Overall change in programFailure to achieve milestonesResource idlenessAdditional Cost

Provision of a new opening at Roof Slab to expedite the progress by proper planning of resources

4) Collapse of Diaphragm Wall Panel No 147 at KMC Station

In underground structures deep foundation, there is chance of soil collapse, it is known and it can be controlled by maintain the properties of bentonite/ poly-mud ,but unfortunately we maintained all properties in control but external factors made unforeseen collapse of soil while grabbing of panel 147

The collapse of D-Wall Panel No 147 was happened due to the following reasons:- Grabbing in the soil was completed up to 24.8 m and since rock layer was encountered below 24.8m,

chiselling started to get the required level of 25.5m. Poly-mud level was 1.5mt below the Ground Level Due to the heavy rain there was contamination of seepage

water and polymer properties may reduce which may be insufficient to withstand the top loose strata

Due to continuous rain ,rise in ground water level immediatelybelow the guide wall due to the heavy rain, higher than the poly-mud level

Vibration due to chiselling Soil profile as per bore log data shown was silty sand up to

a depth of 8.5m but same strata continued from 16m to 22m Quick sand formed surrounding panel area

Action taken due to the unforeseen risk:- Soon after the collapse, the incident was reported to clients Lean concrete was filled up inside the trench

The likelihood of occurring collapse of panel is 0.25 and a potential impact of 1 week delay in work and cost increased by Rs 14 LacsRisk cost= 14 Lacs x 0.25= 3.5 LacsRisk Time= 1 week x 0.25= 0.25 Week Remedial measures taken to avoid the risk in further panels grabbing:-

By making bund over the guide wall, kept the poly-mud level always higher than the ground water level, and also it was encountered with rain water inflow.

Equal quantity of crusher dust was stoked for immediate risk mitigation.

5) Unforeseen Risks due to formation of Cavity in Diaphragm Wall panels at Pachaiappas College Station

Bund

Figure 3. Bund for D-Wall P147

The cavity formed in the D-Wall panels, reason being, bad quality of concrete, honey comb formation, under cut, over cut, soil collapse while concreting, improper fixing of Water bars at joints. The panels observed with cavity were P101, P102, P112, and P113

Problems occurred due to the unforeseen risk were the following:- Sink hole development at the surface of the road due to the volume losses on running traffic adjacent to

the station box. Ingress of water inside the station box caused the excavation works to stop.

Action taken due to the unforeseen risk:- After reporting the issue to the traffic authorities, the

traffic was diverted. Backfilling was done nearby affected areas to avoid the

ingress of water from the cavity into the station area Mass concreting was done wherever the sink hole

occurred Steel plates were placed over the sink hole as an

immediate action to restore the traffic within 24 hours of occurrence of the sink hole

Contiguous pile was adopted outside the D-Wall face at the affected location

Provision of grouting column around the Contiguous pile

Restoration of traffic to its original condition

The likelihood for cavity occurrence n D-wall panel is 0.25 and a potential impact of delaying work by 4 weeks and adding the cost to the project by Rs. 44 Lacs.Risk Cost= 44 Lacs x 0.25 = 11 LacsRisk Time= 4 Weeks x 0.25 = 1 WeekRemedial measures taken to avoid the risk due to cavity formation:-In an underground structure it’s totally unpredictable that on which panel the defects are likely to occur. The defects are identified once the excavation inside the station box is taken up. The processes involved for minimizing the future risks are highlighted below:

Installation of bore-well adjacent to the affected D-Walls Lowering the water table with the help of installed bore wells Excavating inside the station box near the affected panel up to a depth of 1m Steel plate fixing at the affected location Micro-concrete grout in the affected panels. Following this sequence of excavation, steel plate fixing and grouting until the desired level is reached

and cavity is fully rectified.6) Procurement Risks Analysis and Management

Risk Likely Consequences ActionUnderstatement of the need

Purchase of unsuitable product or service

Analysis of need accurately

Insufficient Funding Delay in making the purchase

Obtain appropriate approvals before undertaking the process

No response from known quality of suppliers

Reduced competitionIncreased cost of products

Need for improving our market knowledge

Figure 4. From left- Layout of D-Wall, Cavity for P101 and 102, Road Sink Hole

Figure 5. Contiguous pile at P101 and 102

Offers fail to meet needs Need to call tenderers againAdditional CostDelay in delivery

Conduct market researchDevelop functional and performance specifications

Selecting Inappropriate Supplier and Product

Failure to fulfil the contract and Client need resp.

Provide staff with appropriate tender evaluation, financial and technical skills training and commercial expertise

Risk due to Procurement of materialsDuring the procurement process, a recent case we came across, at the beginning of every year, the procurement team asks requirement from every individual sites for the bulk materials like steel, cement, structural steel, aggregates etc. Based on the available data from all sites, a final requirement is sent for approval to HQ for the years’ work.It was noticed in the go that the steel which was actually required for the years’ work was procured less than the steel which was procured, reason being, and change in the program at the sites due to the change in the scope of work by the clients. The cost for procuring the material was not properly utilised and again we had procure the steel that was required. Thus an extra cost is incurred in purchasing the material for that period which we had minimized by utilising the materials in later months by simply asking the requirements from the sites and using the same inventory which we had procured at the very beginning of the year.

Risk Assessment Matrix- Examples cited above for UAA-04 Project

Probability

Very High          

High   1, 6      

Moderate        

Low   3 2 4, 5   

Very Low          

SeverityVery Low Low Moderate High Very High

  Critical   High   Medium   Low

Innovations in method of construction:- Inter displacement and interchange of Utility diversion Methodology to expedite Diaphragm wall

Construction for streamlining with the planned programme. Training of one team to take off the diversion works internally to reduce the contractor dependency risk Elimination of struts at Base level by modified design for D-Walls Provision of a new opening at Roof for carrying excavation without struts. By making bund over the guide wall, kept the poly-mud level always higher than the ground water level Installation of bore-well adjacent to the affected D-Walls and lowering water table to reduce the ingress

of water as a control measure to avoid the risk of sink hole.Conclusion and Learnings:-Based on the analysis done on several types of risks, we concluded that risks can be managed to avoid its recurrence in future, although, there are risks which are sizeable and takes lots of experience until it is managed.

We get to know about the varieties of risks and their assessment for various site conditions. Assessment is mandatory for each and every site activity, no matter, what is its significance. Contingency plan to be followed for high risk activities. Close and continuous monitoring is required for its mitigation. Timely action and decision taking is also needed. Incorporation of previous projects experience help to mitigate the new risks.

All risks happened at site and its mitigation plans definitely help for great extent in future risk assessments.