Student: Siva Kumar
Year: 2015
Affiliation: University of South Australia
Level: Postgraduate
Thesis written in English
Infrastructure projects often operate in complex, divergent and dynamic conditions and are constantly exposed to numerous risks and uncertainties. In addition, the project delivery process requires engagement with numerous internal and external stakeholders which, if not properly managed, further exposes the project delivery to risk. Water and wastewater projects are no exception to this as they too operate in the same environment. Furthermore, with the recent market conditions and stringent economic regulations coupled with increased customer expectations in delivering reliable water and wastewater services, water utility organisations are forced to look for better ways to improve the efficiencies in the capital delivery. In order to achieve an effective and efficient project delivery, it is crucial to understand the project delivery risks at the early stages of the project so that these risks can be effectively managed. The purpose of this research study, therefore, is to investigate the risks in the delivery of water and wastewater projects in the context of the Australian environment.
A combination of qualitative and quantitative research methods were employed for undertaking the research study. Specifically, the research methods employed here were the literature review, a focus group discussion, an anonymous questionnaire survey and a case study review.
Sixty four project delivery risks associated with infrastructure projects were identified through the literature review. These risks were presented to the focus group to identify the risks relevant to water and wastewater projects and classify these risks according to their nature, possible time of occurrence during the project lifecycle, and stakeholder retainable risk categories. The focus group finally filtered the sixty-four risks down to forty-one and each risk was classified. From these risks an anonymous questionnaire survey was developed and distributed to the project delivery groups who have experience in the project delivery environment. The respondents were requested to provide their perceived importance of each risk in the delivery of water and wastewater capital infrastructure projects. Using the "Relative Importance Index (RII)" technique, each risk was ranked based on RII values. A case study review was undertaken to validate the study findings through two real projects.
The focus group discussion outcomes indicate that approximately 60% of the total identified risks were classified as time and construction related risks. The focus group also discovered that 50% of the total identified risks were contractor retainable risks, 40% were client retainable risks and the balance 10% risks were consultant retainable risks.
The questionnaire survey results were used to calculate RII Index for each of the identified risks. Further statistical analysis on the relative importance of the risks among the client, contractor and consultant group indicated that there is a strong correlation between these groups and general agreement on the perceived importance of the risks in the delivery of water and wastewater capital projects. The following 10 risks were perceived to be the key risks based on RII Index value rankings:
1. tight project schedules to complete the project
2. incomplete or inaccurate cost estimates resulting in project budget
3. inadequate safety systems and processes or unsafe operations in construction
4. design risks (expertise, calculations, technical competency)
5. inefficient project communication management amongst stakeholders (design, operations, etc.)
6. existing infrastructure interface risks (tie-ins to existing pipelines, switchboards, controls)
7. performance related risks such as projects not meeting the specified outcomes
8. constructability risks (e.g. Brownfield site)
9. poor planning and scheduling of construction works
10. poor stakeholder management (both internal and external).
These top ten ranked risks were then aligned to their possible time of occurrence in the lifecycle of the project, and the results indicate that most of these key risks could occur at Planning and Execution phases of the project. The case study revealed that the results are relevant and consistent to the projects examined.
The results obtained from this study fill a gap in knowledge of understanding the key risks in the delivery of water and wastewater infrastructure projects, which can be used to provide industry practitioners and project delivery groups with guidance for focusing and developing effective risk mitigation controls to improve the capital delivery efficiencies.
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