**Figure 4.**

#### **Figure 5.**

*Ishikawa diagram of the HPP project risks.*


#### **Figure 6.**

*Risk analysis in the MS project software (part).*

Based on the risk analysis of all project activities, the project team established that eight activities have a very high risk rate, which is why they decided to analyse these risks in more detail using the standard risk management model. For each of the eight high-risk activities, the project team determined the probability of a risk event *Pe* occurrence and a probability of consequences *Pi* and calculated the overall risk probability. The total loss *Lt* and the expected loss *Le* calculated using Eq. (2) were assessed.

The majority of risks in question result in a delay in the project and consequently in the launch of the HPP test operation. Our assessment of losses was based on data that indicated 1 day of interrupted operation of such an HPP means a loss of income of 17,600 EUR/day. Calculations for the expected losses are given in **Table 2**.

As evident from **Table 2**, some risk-related losses refer to monetary losses and others to time losses, which is why the risks related to monetary losses in terms of

**11**

in **Table 3**.

to delays (**Figure 8**).

were realised.

quences if a risk event were realised.

*Standard Risk Management Model for Infrastructure Projects*

**description**

Delay in adoption

Delay in adoption

Delay in execution

not met

Opposition of owners

Opposition of owners

Damage to existing roads

*Evaluation of losses in huge project risks relating to the erection of the HPP reservoir.*

**Designation** *P<sup>e</sup> P<sup>i</sup> Pe × P<sup>i</sup> Lt* **[103**

Extra costs T3 0.7 0.5 0.35 €50 €17.5

T1 0.9 1 0.9 €320 €288

T2 0.9 1 0.9 6 months 5.4 months

T4 0.8 0.8 0.64 6 months 3.8 months

T5 0.9 0.7 0.63 2 months 1.3 months

T6 0.7 0.8 0.56 €200 €112

T7 0.7 0.6 0.42 5 months 2.1 months

T8 0.8 0.9 0.72 €750 €540

 **€ or month]**

*Le* **[103 € or month]**

extra costs (**Figure 7**) are shown in the risk map separately from the time losses due

In the risk map, in which the risks related to extra costs (**Figure 7**) are shown, four risks are identified: of those, three (T1, T6, and T8) are critical, while the T3 risk belongs to the group of noncritical ones. The project team subsequently prepared adequate measures for the critical risks to prevent or mitigate the conse-

In the risk map, in which the risks related to delays (**Figure 8**) are shown, four risks are identified as well: of those, two (T2 and T4) are critical and two (T5 and T7) belong to the noncritical risks. Again, the project team prepared adequate measures for the critical risks to prevent or mitigate the consequences if a risk event

To illustrate preparation, analysis, and assessment of further measures to mitigate the risk consequences, the T1 risk was selected, i.e., the adoption of the DPN (state spatial plan). This is the first activity in the project having a high and critical risk (particularly due to the fact that it can delay the project's execution and due to the extra costs incurred). The state spatial plan is adopted by the Government of the Republic of Slovenia upon a proposal from the ministries and in conformity with other bodies issuing permits for the placement of infrastructure projects into the space. Local communities actively participate in this process. To mitigate the consequences of the T1 risk (delay in the adoption of the DPN), the project team prepared a plan of measures in three iterations, as shown

*DOI: http://dx.doi.org/10.5772/intechopen.83389*

**No. Activity Risk** 

1 Adoption of national spatial plan—DPN

2 Adoption of national spatial plan—DPN

3 Reservoir plan

4. Reservoir plan

6 Acquisition of buildings and land

7 Acquisition of buildings and land

8 Existing roads

**Table 2.**

5 Tender Conditions


*Standard Risk Management Model for Infrastructure Projects DOI: http://dx.doi.org/10.5772/intechopen.83389*

#### **Table 2.**

*Risk Management in Construction Projects*

Based on the risk analysis of all project activities, the project team established that eight activities have a very high risk rate, which is why they decided to analyse these risks in more detail using the standard risk management model. For each of the eight high-risk activities, the project team determined the probability of a risk event *Pe* occurrence and a probability of consequences *Pi* and calculated the overall risk probability. The total loss *Lt* and the expected loss *Le* calculated using

The majority of risks in question result in a delay in the project and consequently in the launch of the HPP test operation. Our assessment of losses was based on data that indicated 1 day of interrupted operation of such an HPP means a loss of income

As evident from **Table 2**, some risk-related losses refer to monetary losses and others to time losses, which is why the risks related to monetary losses in terms of

of 17,600 EUR/day. Calculations for the expected losses are given in **Table 2**.

**10**

**Figure 5.**

**Figure 6.**

*Ishikawa diagram of the HPP project risks.*

Eq. (2) were assessed.

*Risk analysis in the MS project software (part).*

*Evaluation of losses in huge project risks relating to the erection of the HPP reservoir.*

extra costs (**Figure 7**) are shown in the risk map separately from the time losses due to delays (**Figure 8**).

In the risk map, in which the risks related to extra costs (**Figure 7**) are shown, four risks are identified: of those, three (T1, T6, and T8) are critical, while the T3 risk belongs to the group of noncritical ones. The project team subsequently prepared adequate measures for the critical risks to prevent or mitigate the consequences if a risk event were realised.

In the risk map, in which the risks related to delays (**Figure 8**) are shown, four risks are identified as well: of those, two (T2 and T4) are critical and two (T5 and T7) belong to the noncritical risks. Again, the project team prepared adequate measures for the critical risks to prevent or mitigate the consequences if a risk event were realised.

To illustrate preparation, analysis, and assessment of further measures to mitigate the risk consequences, the T1 risk was selected, i.e., the adoption of the DPN (state spatial plan). This is the first activity in the project having a high and critical risk (particularly due to the fact that it can delay the project's execution and due to the extra costs incurred). The state spatial plan is adopted by the Government of the Republic of Slovenia upon a proposal from the ministries and in conformity with other bodies issuing permits for the placement of infrastructure projects into the space. Local communities actively participate in this process. To mitigate the consequences of the T1 risk (delay in the adoption of the DPN), the project team prepared a plan of measures in three iterations, as shown in **Table 3**.

**Figure 7.** *Map of project risks expressed by costs.*

**Figure 8.** *Map of project risks expressed as delay in time.*

For the anticipated measures, the project team assessed the probabilities of a risk event occurrence, a probability of impact after the adoption of a measure and the total and expected loss. Ten percent of the anticipated loss of income was determined by the project team as the value of the total loss. The calculations and results for all three iterations of measures are shown in **Table 4**.

Based on the results from **Table 4**, a risk map for the T1 risk was drawn up (delay in adopting a DPN), which is shown in **Figure 9**.

In the risk map in **Figure 9**, the threshold line denotes a still acceptable value of loss of EUR 100,000, which the project team considers to be the maximum tolerable value. T1 represents the starting situation, and there are no extra measures except warnings to the Government of the RS to start preparing a DPN for the erection of the HPP reservoir. The expected delay here will be 6 months, and the expected loss incurred by the client due to a delay in the scheduled start-up of the HPP is EUR 288,000. Point T1.1 represents a point of risk T1 in the risk map after a measure is adopted, with which the ministry responsible for infrastructure would appoint a co-ordinator to co-ordinate the preparation of the DPN. Still, a delay of 5 months is expected, while the expected loss in this case would be reduced to EUR 180,000, which still means that the risk is a critical one. Additional suggested measures, with

**13**

**Figure 9.**

which the municipalities on the territory in which the HPP reservoir will be erected, would co-ordinate among themselves and could render risk T1 noncritical, because point T1.2 lies below the threshold line of expected losses. A delay of 4 months is

*Standard Risk Management Model for Infrastructure Projects*

**Risk Risk event driver Prevention plan Impact driver Contingency plan**

Minimum 6-month delay in preparation of documentation

Minimum 5-month delay in preparation of documentation due to discrepancies within ministries

Mismatched comments between municipalities represent a further 4 months of delay

> **Total loss** *Lt* **(thousand EUR)**

**Total probability**  *Pe × Pi*

T1 0.9 1 0.9 320 288 T1.1 0.6 1 0.6 300 180 T1.2 0.4 0.8 0.32 250 80

A loss of income totalling EUR 3.2 million is anticipated

A loss of income of €3 million is anticipated, despite the appointment of a co-ordinator for the preparation of a DPN

Comments of municipalities get matched, yet a further €2.5 million loss of income is still anticipated

> **Expected loss** *Le* **(thousand EUR)**

Client should warn the government of the consequences of delay in adopting the resolution on the preparation of a DPN

Suggest that the Ministry of Infrastructure assumes co-ordination

Mismatched comments between municipalities

*Plan of measures to reduce consequences of risk in the preparation of the DPN.*

*Results of calculated impacts of the suggested measures to mitigate risk T1.*

*Risk map after the introduction of anticipated measures to mitigate risk T1.*

**Probability of impact** *Pi*

*DOI: http://dx.doi.org/10.5772/intechopen.83389*

T1 Government of the RS is often late in adopting a resolution on preparing a DPN

T11 Discrepancy in the work of ministries in the preparation of a DPN

T12 Comments of

**Risk Probability of** 

**risk event** *Pe*

**Table 3.**

**Table 4.**

municipalities on the proposed DPN *Standard Risk Management Model for Infrastructure Projects DOI: http://dx.doi.org/10.5772/intechopen.83389*


#### **Table 3.**

*Risk Management in Construction Projects*

**Figure 7.**

**Figure 8.**

*Map of project risks expressed by costs.*

For the anticipated measures, the project team assessed the probabilities of a risk event occurrence, a probability of impact after the adoption of a measure and the total and expected loss. Ten percent of the anticipated loss of income was determined by the project team as the value of the total loss. The calculations and results

Based on the results from **Table 4**, a risk map for the T1 risk was drawn up (delay

In the risk map in **Figure 9**, the threshold line denotes a still acceptable value of loss of EUR 100,000, which the project team considers to be the maximum tolerable value. T1 represents the starting situation, and there are no extra measures except warnings to the Government of the RS to start preparing a DPN for the erection of the HPP reservoir. The expected delay here will be 6 months, and the expected loss incurred by the client due to a delay in the scheduled start-up of the HPP is EUR 288,000. Point T1.1 represents a point of risk T1 in the risk map after a measure is adopted, with which the ministry responsible for infrastructure would appoint a co-ordinator to co-ordinate the preparation of the DPN. Still, a delay of 5 months is expected, while the expected loss in this case would be reduced to EUR 180,000, which still means that the risk is a critical one. Additional suggested measures, with

for all three iterations of measures are shown in **Table 4**.

in adopting a DPN), which is shown in **Figure 9**.

*Map of project risks expressed as delay in time.*

**12**

*Plan of measures to reduce consequences of risk in the preparation of the DPN.*


#### **Table 4.**

*Results of calculated impacts of the suggested measures to mitigate risk T1.*

#### **Figure 9.**

*Risk map after the introduction of anticipated measures to mitigate risk T1.*

which the municipalities on the territory in which the HPP reservoir will be erected, would co-ordinate among themselves and could render risk T1 noncritical, because point T1.2 lies below the threshold line of expected losses. A delay of 4 months is

still expected, yet the expected loss is EUR 80,000, which is less than the maximum threshold value of EUR 100,000 the project team had determined for this risk.

In the project execution phase, the activities of the project must be closely monitored, and attention should be paid to the time of risk event occurrence. The project team can determine risk indicators [12] that remind them of points in time when a potential risk event might or could be expected to occur. It is not enough only to introduce measures, the situation should be constantly monitored and additional measures adopted to mitigate the impacts of risk events that occur. In the case of the erection of the HPP reservoir, the project team also constantly monitored the risk management activities and adopted adequate measures as required. The management of risks in the project in question was ultimately successful, since the HPP started operating on schedule and according to the timeline.

It is important to note that once the project was completed, the project team made a thorough analysis of their risk management strategy and identified those solutions that proved effective and successful and that would be worth using in similar projects in the future, as well as ineffective solutions that should be avoided in future projects.
