Risk Management KMc Mar 2013 RISK MANAGEMENT Practical Processes for Tunnelling and Underground Works Kevin McManus 21 March 2013

Risk ManagementRisk ManagementKMc Mar 2013KMc Mar 2013

RISK MANAGEMENTRISK MANAGEMENT

Practical Processes for Tunnelling and Underground Works

Kevin McManus

Kevin McManusKevin McManus21 March 201321 March 2013


Purpose of Risk Purpose of Risk ManagementManagement

Elimination of Risk

or

Reduction of risk

to

Acceptable level




KMc Mar 2013


Risk ManagementRisk Management

Risk ManagementRisk ManagementKMc Mar 2013
















“..expect to be

surprised

but never

astonished..”


Key DefinitionsKey DefinitionsDanger:

Danger arises when situations that could

result in harm are not properly controlled

Hazard:

A thing or situation with the potential to

cause harm to people or adverse impacts

on a project:

•Health; Safety; Environment; Quality

•Design; Construction; Cost; Programme

•Third parties and existing facilities

•Reputation; Viability of EnterpriseKevin McManusKevin McManus21 March 201321 March 2013


Hazard

Event

Risk

Probability Severity

Risk

Rating

n p s p x s

Key DefinitionsKey Definitions

Risk:• Probability of a hazard occurring•Severity or consequence hazard occurring



Acceptability of RiskAcceptability of Risk

Constraints and GuidanceConstraints and Guidance

•Subjectivity

•General Opinion; Third Party

Requirements

•Statute

•Regulatory Guidance

•Standards

•Industry Guidance

•Joint Code of Practice : Risk

Management Kevin McManusKevin McManus21 March 201321 March 2013





•Subjectivity


Requirements

•Statute


•Standards



Management


X

Acceptability

of Risk

Hazard

Event

Risk


Acceptable

Tolerable

Unacceptable

X V Likely V High




X Y


Acceptable

Tolerable

Hazard

Event

Risk Acceptability

of Risk

Unacceptable

Y Unlikely V High

X V Likely V High






•Subjectivity


Requirements

•Statute


•Standards







•Subjectivity


Requirements

•Statute


•Standards





StatuteStatute

Management of Health and Safety at Work Regulations 1999

Every employer shall make a suitable and sufficient assessment of:

• The risks to ……. his employees …....at work

•Risks to persons not in his employment arising out of or

in connection with the conduct by him of his

undertaking



StatuteStatuteConstruction (Design and Management) Regulations 2007

Clients should:

•Allow sufficient time and resources for all stages

•Appoint CDM Coordinator

Designers should:

• Eliminate hazards and reduce risks during design

• Provide information about remaining risk.

Contractors should:

•Plan manage and monitor construction phase

•Liaise with CDM coordinator with respect to ongoing design





•Subjectivity


Requirements

•Statute


•Standards







AcceptabilityAcceptabilityGuidance from Regulatory Bodies

As Low As Reasonably Practicable ALARP

•does NOT mean

•Standards have to be continually raised

•Exceptionally high standards set the ALARP level

•All possible control measures are required

•There will be no accidents or incidents





•Subjectivity


Requirements

•Statute


•Standards




StandardsStandards


BS EN 1997-1 : 2004Eurocode 7: Geotechnical Design

Elements of “observational method”

•Acceptable limits of behaviour established

•Range of possible behaviour assessed

•Acceptable probability that actual behaviour will be within acceptable limits

•Plan of monitoring devised

•Monitor early & at short intervals to see if behaviour stays within acceptable limits

•Contingency plan devised and used if monitoring shows behaviour outside limits





•Subjectivity


Requirements

•Statute


•Standards









•Subjectivity


Requirements

•Statute


•Standards


•Code of Practice for Risk Management




Munich Underground 27 September 1994


DLR February 1998



CTRL

Lavender St 2003


















Hull 1999

Original Contract Value £60M

Length of tunnel10km

~~ cost per metre £6k

Collapse damage length150m

Damaged length “value”£900k

Insurance cost £42M


InsuranceInsurance

Contract for the transfer of liability for the outcome of risk

Insurer sells insurance for agreed risks in exchange for a premium

Insured expects compensation for loss or damage suffered

Conditions apply

Loss or damage has to be accidental / fortuitous

If loss or damage can be foreseen and is expected:-

•it should be avoided by intentional planning

• not wishful thinking and reliance on the insurer



Structure of insurance market

Broker

•Experts – normally act for

Insured

•Not a party to insurance

contract

•Does not accept the risks

insured.

•Expected to:

Assess of risks and needs

Recommend insurer and

policy

Advise on sums to be

insured Advise on level of

premium

Assist with claims

settlement


Insurer

Sells insurance (indemnity for risk events) in exchange for a

premium.

Reinsurer

Second tier insurers who sell insurance for part o the main risk.

Used to spread risk and free up reserves of lead insurer


Types of Insurer

Mutual

Companies owned by insurance policy holders

Unlimited liability

e.g. Lloyds of London

Limited Liability

Guaranteed Capital forms limit of liability

Beyond this the Insurer becomes insolvent



Types of insurance required for construction

Property

Material, equipment & machinery

Contractor’s All Risk

Excludes stated risks

Liability

Covers Specific Legal Liabilities

Employer's LiabilityPublic LiabilityProfessional Indemnity

Generally hinges on negligence

Non Negligence

Cover for liabilities under circumstances where Client may face liabilities even though the Contractor has not been negligent




Insurable

Needs to be a degree of uncertainty

Risk should be quantifiable

Should be acceptable to insurance market

Damage should be capable of being assessed

Uninsurable

Foreseeable events

Consequential losses or risks

Political risks or international turmoil e.g. war

Absence of cause and event connection

Limitations of Insurance



Terms of Insurance

Indemnity

Place the insured in same position as before the risk event

Compensation for actual loss or damage

Loss of profit not considered

Utmost Good Faith

Proposer (Insured) expect to divulge all available knowledge about risks - not conceal

Insurer relies on information to assess risk and set premium



Code of Practice for Risk Management of Tunnel Code of Practice for Risk Management of Tunnel WorksWorks

Development Purpose and structure

2nd Edition May 2012 International Tunnelling Insurance Group (ITIG)

Based on Joint CoP for Risk Management of Tunnel Works in UK (BTS/ABI 2003)

Promote and secure best practice for minimisation and management of risks

Operate in parallel and not derogate from national statute standards etc

Use of Risk assessment and Risk Registers at all project stages•Project Development•Procurement for Construction•Design•Construction


Principles of Code

•Hazard identification and management to ensure reduction to ALARP

•Responsibility for risk management explicitly allocated to relevant contract parties

•Risks addressed adequately and appropriately in planning and management

•Appropriate financial allowances made

•Formalised Risk Management system to be used as means of

documenting risk:

•Identification

•Evaluation

•Allocation




Client Roles and Responsibilities

Client shall have demonstrable technical and contract management competence

Absence of appropriate experience; Client shall appoint a Client’s

Representative

•Named competent key Personnel

•Capability in design management and related Risk Assessments &

Registers

•Capability to indentify risks that will impact on Third Parties

Ensure competence and adequacy of site and ground investigations

Indentify arrangements for design checks, construction supervision &

monitoring

Develop and Maintain Overall Management Organization Chart




Assessment and evaluation of Project OptionsAssessment and evaluation of Project Options

•Geology, hydro geology and hydrology

•Appropriate tunnelling methodologies

•Temporary and permanent ground support measures

•Ground movements and settlements and impact on third parties

•Hazardous materials and utilities

•All other particular local factors

•Associated safety, health and programme implications

•Associated costs

•Appropriate forms of contract

•Risk RegisterRisk Register



Contract; procurement; prequalification & Contract; procurement; prequalification & tendertender

•Form of contract (sub contract) & detailed terms - allocation of risks

and liabilities

•Sufficient and adequate time for preparation and assessment of tenders

•Full Disclosure of hazards identified in project development risk register

•Ground reference Conditions either by Client or Tenderer

•Key Method Statements

•Tenderer’s Risk Register

•Tenderer’s experience; key staff; focused technical submission


RiskTransfer

ProjectDevelopment

FeasibilitySI & GI

Identify man made and natural hazardsProvide information for assessment of methods and viability

OptionsHSEQ Geology Methodology Time & Cost

Risk

Asse

ssments

Risk

Registe

r

Ref Design

ContractProcurement

DocumentPreparation

Disclose Hazards GBR Sufficient time for tender

PreselectionExperience Key Staff

StatusSubletting

GBR

DetailedDesign

Information Transfer

Permanent &Temporary

Works

Transfer of Information

Sensitivity Studies

Design Checks

Emergencies

Tolerances Methods

Constructability Geotechnical Mitigation

Validation Materials Natural Perils

Monitoring Data Review Confirm/ Amend Contingencies

Construction

Pre-construction Implementation and Risk Plans Consents Constructability

Tender Assessment

Method Statements

Detailed Methodology

Plant Selection Criteria

Quality Records Independent Supervision

Management Plans Key Staff Design Self certification




Client Tenderers Designer Contractor

SI Factual ReportRisk AssessmentContract FormsGround Reference Ground Reference OorganisationChart

Key Method Statements

Risk AssessmentTender Risk Register

Design Brief Design BriefThird party AssetsConstructability Reviews

Risk Management Plan Construction Risk RegisterRisk AssessmentsMethod Statements & ITPsManagement & Audit PlansSite Organisation ChartIndependent Supervision PlanPlan Selection CriteriaValue Engineering Proposals

Options

Pre

-sel

ection

Des

ign

Con

stru

ctio

n


Code of Practice DeliverablesCode of Practice Deliverables




Identify and Describe

Ref

No.

Activityor

HazardHazard Event

Persons and

Assets at Risk

Outcome

Identification of HazardsIdentification of Hazards



Identification of HazardsIdentification of Hazards

• involve a combination of knowledge, skills and experience

•previously assessed hazards that didn’t occur should not be discounted

•include mechanisms by which hazards can occur

•complex and high risk cases may need specialist expertise and techniques






P S R

Evaluate and Assess

Ref

No.

HazardEvent

Persons Assetsat Risk

OutcomeRisk


Evaluate and AssesEvaluate and Asses


Evaluation of ProbabilityEvaluation of Probability

Score1 Improbable2 Remote3 Occasional4 Probable5 Frequent

Score1 Improbable2 Remote3 Occasional4 Probable5 Frequent

Probability EvaluationGeneral Tunnelling

Unlikely Less than one every 100,000 metresRare 10,000 to 100,000 metresIrregular 1,000 to 10,000 metresLikely 100 to 1,000 metresRegular 0 to 100 metres

Construction Operations RailwaysLess than 1 in every 10,000 cycles Less than 100 years1,000 to 10,000 cycles 10 to 100 years100 to 1,000 cycles 1 to 10 years10 to 100 cycles Monthly to annually1 to 10 cycles Daily to monthly



Score

1 Insignificant

2 Minor

3 Serious

4 Critical/Severe

5 Catastrophic

Severity EvaluationFirst aid injury, slight property damage with minimal cost that is unlikely to impact upon works, insignificant environmental impact contained within site.Short term illness, lost time accident, minor damage to property involving minimal down time, minor environmental impact with no lasting effect.Instance of occupational ill health, over 3 day injury, localised damage to property, environmental impact with possible public or media exposureMajor injury or acute ill health, significant damage to property, major environmental impact involving potential prosecutionFatality, environmental disaster, collapse or destruction of property

Evaluation of SeverityEvaluation of Severity



Risk Rating MatrixRisk Rating Matrix

1 2 3 4 51 1 2 3 4 52 2 4 6 8 103 3 6 9 12 154 4 8 12 16 205 5 10 15 20 25

Risk Scoring Matrix Probability of Occurrence

Severity of Hazard





Risk Ranking

1 to 3 LOW4 to 9 MEDIUM10 to 25 HIGH

Mitigation RequirementsSuitable attention to working proceduresCorrective actions, improvement and control measuresElimination or reduction strategies


Risk Reduction RequirementsRisk Reduction Requirements



SeverityLow

High

High




Principles of Prevention

a) Avoiding risks

b) Evaluating risks which cannot be avoided

c) Combating risks at source

d) Adapting work to the individual

e) Adapting to technical progress

f) Replace potential danger by non or less dangerous

g) Developing a consistent overall prevention policy

h) Priority of collective protection over individual protection

i) Giving appropriate instructions to employees

Avoid

Substitute

Engineer Out

Administer controls

Provide Protective Equipment

Emergency and Recovery Measures



Hierarchy of MitigationHierarchy of Mitigation



Emergency and Recovery Measures

Provide Protective Equipment

Administer Controls

Engineer Out

Substitute

Avoid

Hierarchy of MitigationHierarchy of Mitigation

P S R P S R

Eliminate or Reduce

Residual RiskRef

No.

Mitigated Outcome

Initial Risk Mitigation Measures


Eliminate or ReduceEliminate or Reduce






Expecting UncertaintyExpecting Uncertainty



Reducing UncertaintyReducing Uncertainty

P S R

Risk Owner

ActionsReview Date

Residual RiskRef

No.

Mitigated Outcome

Mitigation Measures

Monitor and Manage


Monitor and ManageMonitor and Manage




Monitor and ManageMonitor and Manage


Zones & Triggers Trigger Description Action Required

Standard Conditions

Black

Red Emergency Preparedness Plan

Amber

Additional Measures

Contingency Action

ClearReview

GreenReview

RED Predicted x 2.0

AMBER Predicted x 1.5

GREEN Predicted x 0.9


Trigger ValuesTrigger Values







Face Loss Back AnalysisFace Loss Back Analysis



Low Probability High Consequence Low Probability High Consequence EventsEvents

..where a high severity risk has been

mitigated by construction methods to an

acceptable level…

..the contractor shall provide an outline

Emergency and Contingency Plan for dealing

with the risk in the event that it is realised…




Risk and Insurance NEC 3Risk and Insurance NEC 3

Employer’s Risks

Unavoidable result of works

Negligence by employer ‘s

staff

Fault in Employer’s design

War, riot , general strikes etc

Prior damage to free issues

Any others in Contract Data

Contractor’s Risks

Anything not the Employer’s Risk

Contractor’s Insurance Obligations

Contractor insures for contracted

risks to the minimum amount of

cover stated in the contract……

Except where the Employer

provides the insurance and charges

the Contractor



Prob. Minimum Most Likely MaximumMean Output

Triangular 0.7 1,000 3,000 5,000 £ 2,100 Delay to design w ith potential further delays to construction

Triangular 0.5 1,000 3,000 5,000 £ 1,500 Delay to design w ith potential further delays to construction

Triangular 0.3 1,000 3,000 5,000 £ 900 Delay to design w ith potential further delays to construction



Current Quantitative Cost Impact (£k)Impact DescriptionDistribution

Cost EvaluationCost Evaluation



Quantitative EvaluationQuantitative Evaluation




Any Any Questions?Questions?


Documents

Risk Management KMc Mar 2013 RISK MANAGEMENT Practical Processes for Tunnelling and Underground Works Kevin McManus 21 March 2013