Read the case study below and answer ALL the questions that follow.

Overview of the Project BAA has adopted a partnering technique to its Terminal 5 construction project not only taking full responsibility of all the risks to the success of the project but also securing a commitment towards uninterrupted improvement from its partners. The Challenges facing BAA 1. Cost over-runs could have a damaging effect on BAAs reputation, cash flow, balance sheet, and even future survival, given the scale of the project. Similarly, delays must be avoided, as there is a trend in the increase in the passenger numbers. This makes the undertaken project very significant for the BAA. 2. The site access is limited to one main route only. Hence, early planning work inferred that the project would cost over 1 billion more than was affordable and would be delivered two years late if an out-of-the-box approach is not followed. 3. A high degree of evolution is expected during the project by the BAA. BAAs response to the challenges: BAAs approach works on the principles of the Latham and Egan initiatives, but it surpasses any solution so far applied in the UK. 1. The risks are to be borne by the client. 2. The Partners are given more importance than the suppliers - BAA has developed an Integrated Project Team Approach, so that the talented people involved with the project stay motivated and organized enough to get the maximum output from them. Risk management BAA believes that project management is a tool of the risk management approach, not vice-versa. Risk control ratings are set in the overall programme. These ratings cascade through the projects management and transform into personal plans and objectives of all team members. The data in the system is supposed to be meaningful and purposeful. The root cause of each risk is identified by the risk process which enables the risk to be eradicated in the most effective way. BAA identifies four levels of risk control. The primary objective is to keep all risks between level 2 and 3 in the following scale: 1. The solution does not manage the risk at an acceptable level. 2. The risk is managed at an acceptable level with the possibility of improvement. 3. The solution reached is optimal and cannot be improved upon. 4. The solution excels the level of risk, and should be adjusted. 5. Early on, the most critical risks are identified and where suitable, the solutions are tested beforehand to determine effectiveness of the solution. An example of pre-emptive risk management To understand the challenge in erecting a huge roof (that spreads across more than 150 meters), the designers, suppliers, fabricators and the T5 roof team pre-erected the roof abutment structure off-site in Yorkshire. The pilot pinpointed 140 significant lessons. Each had a risk mitigation plan enables in smoother workflow and faster construction on site. Overall, this pre-emptive risk management technique was pivotal in saving at least three months as studied by the project team. In this particular case, the time saved enabled the project team to cover-up for the delays that had previously arisen during the wet winter of 2001-02, which helped to keep the project on schedule. Key Lessons 1. The risk is always borne by the client. 2. Project management is a tool for risk and opportunity management and not vice versa. 3. Those who are best able to manage the risk should be handed over the management activity, and take over forms of contract that supports a risk management approach. 4. All parties reap substantial benefits from collaborative, integrated working arrangement with suppliers. 2 DD 5. Board level leadership and sponsorship is utmost important. 6. Safer construction and fewer defects can be attained by off-site prefabrication and assembly of elements. 7. Major projects should be done under excellent and highly experienced people. This minimizes confrontation and establishes trust and openness in working relationships

Discuss how BAA minimised the effect of the risks associated with the project.

Risk analysis was a strong imperative adopted by BAA. Discuss the risk assessment process and the risk assessment form from a theoretical perspective. Then, identify the assessment process that BAA used as part of their risk management process.

Question2

Schwalbe (2015) indicates that risks can be assessed qualitatively and quantitatively. Discuss the theory of Schwalbe and by referring to a project you are familiar with, identify the qualitative and quantitative risks for the project.[20]

Question3

Using risk management comes with its benefits that surpasses the consequences of not identifying and managing project risks. Articulate what the benefits of project risk management are using examples from a project of your choice.[20]

Question4

Effective risk management involves a commitment to risk management by stakeholders, top management, the project steering committee, the project manager and project team members. By referring to a project you are familiar with, elaborate on the risk management principles as theorised by OGC (2009).[20]

Question5

Project teams often have to work around unplanned responses to risk events especially when they do not have contingency plans in place. Discuss the tools and techniques used for effective risk monitoring and control. By referring to a project that you are familiar with, discuss those tools that could have been effectively used by the project.