Civil Engineering Reference
In-Depth Information
been specified, then a start is made to map out the measures which could
be taken against these risks. In addition, an estimate is also made of the
expected effect of these management measures. Based on this, a choice can
be made from the various alternatives. The effect of the risk management
measures is assessed regularly and the risks are identified again.
Actualization of risk analysis
After the risk management measures have been evaluated, the RISMAN
cycle has in fact been completed and the risk analysis is actualized. This
means that any new risks which might occur should be analyzed again. It is
then necessary that the specification of new risk management measures
is carried out again to be able to manage the new risks; the process is gone
through again. It is important to have a good picture of the risks in the new
project stage particularly when changing to a new stage in the project.
Risk sharing between contractor and client
In the negotiations prior to the effectuation of the contract, sharing the risks
associated with the mega project played an important role. In sharing the
risks, it is of primary importance that they are assigned to the party that is
also able to bear the risks. A client prefers not to run any risks at all, but if
everything is put on the shoulders of the contractor, this has the effect of
greatly increasing the costs.The question also arises here as to whether it is
at all desirable to dump all the risks at the contractor's door. Not only
because confining specific risks is not part of the contractor's core business
but also because the client often ends up having to deal with the conse-
quences of certain risks anyway. This is mainly because the environment
'forces' the client to fulfil its traditional client role, contrary to concluded con-
tracts; eventually the consequences of certain risks come back via legal pro-
cedures to the client. In the agreement with KMW, the customary risks for a
design and build contract are covered. Two important stipulations ('penalty
clause' and 'boring and building risk') are dealt with in outline below.
Maximizing the penalty
It is customary to include a penalty clause to compensate the loss which the
client suffers, in the case of late completion (including no income from toll
charges). The ideal situation for a client would be that the penalty would
have no maximum attached to it and the contractor is motivated to finish
and complete the work as quickly as possible. In the case of an exceptional
project such as the construction of the Westerschelde Tunnel there is a
chance that the boring process goes wrong completely: numerous disasters
can occur which can cause considerable delays. For contractors there is of
course a limit to the risk that they can bear, also where it concerns the abil-
ity of financing penalties. The motivation for tackling such a project in this
way will not be very great if at the same time it could mean that the con-
tinued existence of your own company is in danger. In addition, the com-
pulsory liquidation of a building consortium does not help a client because
another party has to be found to finish the work. It was therefore decided in
consultation with KMW to agree to a penalty of 136,000 euro for each day
that completion was delayed with a maximum of 13.6 million euro, a maxi-
mum that would be reached after a delay of 100 days.
Building and boring risk
It was agreed in the contract that a number of specific risks would be explic-
itly included in the implementation risk taken by the building consortium
KMW. Especially important here are the risks concerning the condition of
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