**3. Risk management training and education**

Caltrans's Project Risk Management Handbook (California Department of Transportation [Caltrans], 2007) is the reference for performing training to the project risk management team. It covers the basics of risk management applied to transportation projects. Nevertheless, additional knowledge is provided to the team members for assessing properly the risks and opportunities during the qualitative and quantitative analysis. Although there are considerable resources for learning about risk management, Caltrans has adopted this process into its project development process (Figure 2). This approach has assisted for providing on the job training for the Project Development Team (PDT).

412 Risk Management – Current Issues and Challenges

**2. Risk management planning** 

**Figure 1.** Planning the risk management plan

As any other process in project management, risk management has to be planned in order to forecast the total effort required by the project team for developing the full scope of risk management. The California Department of Transportation (Caltrans), developed a Project Risk Management Handbook which is being used as a reference for planning the steps for applying risk management into specific projects. The purpose of the study, roles and responsibilities, the scope of the Risk Register, risk identification, analysis methods, implementation period, schedule and budget allocation need to be defined with the plan. Special attention should be placed into the human resource (method selection) aspect and in identifying the right phase of the project to initiate with the study. The roles of the Project Manager (PM) and the Risk Manager (RM) are critical for developing a realistic implementation plan (Figure 1). In addition, before starting working wit the RMT, the PM and RM should ensure that important project data

It is ideal to have the project charter for developing the risk management plan, since in the charter it is possible to identify critical information about the project like scope, conceptual

Caltrans's Project Risk Management Handbook (California Department of Transportation [Caltrans], 2007) is the reference for performing training to the project risk management

cost estimate, delivery milestones, conceptual risks, stakeholders, etc.

**3. Risk management training and education**

is available. For example the project report, cost estimate, project plan, etc.

**Figure 2.** Risk management process flow diagram (Caltrans, 2007)

It is important to notice, that the risk assessment is responsibility of the PM and the project team. Nevertheless, it is recommended to use whenever is possible a RM. The RM is a neutral element of the project team and can reduce the bias, which can seriously affect the outcome of the risk management study.

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**Figure 3.** Risk management key responsibilities (Caltrans, 2007)

Due to the nature of the transportation projects, several stakeholders are usually involved. In particular, there is a closed communication between other local, regional and federal agencies which need to be involved and provide assessments and feedback. Caltrans as a state agency, deal internally as well with several stakeholders coming from the different

For the above reasons, it is extremely important to develop project communication plans, so the right stakeholders can be identified, together with investigating the best ways of communication with them critical project information for decision making. Figure 4 shows a typical stakeholder analysis used at Caltrans, which is part of the project communication plan. As can be seen, the stakeholder analysis aid in selecting those stakeholders that could play a relevant role in the project. For the PM, is important to know which is the prefer way for communicating with each stakeholder, since he needs to keep them informed at all times. The frequency is another factor which needs to be addressed carefully, some people like to be informed about every change or movement in the project and others, only want to receive

The Subject Matter Experts (SMEs) have two objectives along the risk management study; firstly they provide specialized knowledge about specific project risks and uncertainties and

updates related to considerable changes in scope, time or cost for example.

**5. Project stakeholders** 

functional units or divisions.

**6. Subject matter experts** 
