Question 5 Consider the case Study - Royal Opera House, Covent Garden, London, given in Appendix Q5. a) Identify and critically analyse the key issues in the case study which might encourage a Project Engineer in using the three main stages to risk management planning. (6 marks) b) As a Project Engineer you have been asked to advise the board of the company on the status of this project. From the case study, identify the data you need to be able to present a more complete picture of the project risks. In drawing issues from the case study briefly explain the purpose of the use and content of this data in managing risk. (8 marks) c) The following consideration of risk allowance was made for the Royal Opera House Project Impact (E) Likelihood (%) 40 Optimistic outcome 5,189,000.00 (saving) Most likely outcome 18, 160,000.00 (extra) Pessimistic outcome 7,303,000.00 (extra) 50 10 1) Provide an estimate for the risk budget. (4 marks) il) if the cost plan allowance for the project is estimated to be 150 million, calculate the total project cost. (2 marks) CASE STUDY - Royal Opera House, Convent Garden, London The 200 million refurbishment of the Royal Opera House was one of the largest and most complex projects funded by the National Lottery Board. The project was executed using the construction management approach as this was considered an ideal process for managing risk The aim was to identify risks at the earliest possible opportunity and proactively manage them through the risk register. Actions were taken to contain and risks and to transfer the risks remaining through the contract to consultants and trade contractors. Project risks were therefore only transferred to trade contractors after they had been identified, analysed, quantified and minimized. The risks were clearly described in the tender documents and specific actions agreed with the trade contractors. Cost risks on the project were minimized by the early award of those key trade packages, which have a large element of specialized detailed design, on a lump-sum design and construct basis. Around 70% of the total project value was procured prior to project construction; the remaining 30% was the subject of a detailed cost estimate. Rigorous cost-control procedures were established to identify and obtain client approval to all post-contract variations before implementation. Time risks on the project were minimized by detailed analysis of the programme, construction methods and sequences, resources and logistics. Methods included critical path analysis, resource analysis and resource levelling, 3D CAD modelling of construction phasing and construction programme. Detailed method statements were produced for each critical element and comprehensive RA undertaken of the programme linked to probability simulations. Source: Trotter, 1995 Question 5 Consider the case Study - Royal Opera House, Covent Garden, London, given in Appendix Q5. a) Identify and critically analyse the key issues in the case study which might encourage a Project Engineer in using the three main stages to risk management planning. (6 marks) b) As a Project Engineer you have been asked to advise the board of the company on the status of this project. From the case study, identify the data you need to be able to present a more complete picture of the project risks. In drawing issues from the case study briefly explain the purpose of the use and content of this data in managing risk. (8 marks) c) The following consideration of risk allowance was made for the Royal Opera House Project Impact (E) Likelihood (%) 40 Optimistic outcome 5,189,000.00 (saving) Most likely outcome 18, 160,000.00 (extra) Pessimistic outcome 7,303,000.00 (extra) 50 10 1) Provide an estimate for the risk budget. (4 marks) il) if the cost plan allowance for the project is estimated to be 150 million, calculate the total project cost. (2 marks) CASE STUDY - Royal Opera House, Convent Garden, London The 200 million refurbishment of the Royal Opera House was one of the largest and most complex projects funded by the National Lottery Board. The project was executed using the construction management approach as this was considered an ideal process for managing risk The aim was to identify risks at the earliest possible opportunity and proactively manage them through the risk register. Actions were taken to contain and risks and to transfer the risks remaining through the contract to consultants and trade contractors. Project risks were therefore only transferred to trade contractors after they had been identified, analysed, quantified and minimized. The risks were clearly described in the tender documents and specific actions agreed with the trade contractors. Cost risks on the project were minimized by the early award of those key trade packages, which have a large element of specialized detailed design, on a lump-sum design and construct basis. Around 70% of the total project value was procured prior to project construction; the remaining 30% was the subject of a detailed cost estimate. Rigorous cost-control procedures were established to identify and obtain client approval to all post-contract variations before implementation. Time risks on the project were minimized by detailed analysis of the programme, construction methods and sequences, resources and logistics. Methods included critical path analysis, resource analysis and resource levelling, 3D CAD modelling of construction phasing and construction programme. Detailed method statements were produced for each critical element and comprehensive RA undertaken of the programme linked to probability simulations. Source: Trotter, 1995
