The people of Dublin are enjoying an increasingly extensive tram system and will soon see work start on a new commuter metro train network. RPA has embedded project risk management into its culture, aided by the use of Primavera Pertmaster for project risk analysis.

Since its establishment in 2001, the Railway Procurement Agency (RPA) in Eire has focused on delivering transport infrastructure to the highest standards, in partnership with the private sector and other public agencies. The 50 million passengers who have travelled on Luas, the Dublin tram system, since its launch in 2004, are a measure of the public response to the delivery of first-rate public transport infrastructure. The Luas system was delivered within the Government approved budget of 750 million Euros.

RPA is now building on this success as the development agency for all Light Rail and Metro projects through the Irish Government's ambitious Transport 21 programme, the capital investment framework through which the transport system in Ireland will be developed over the period 2006 to 2015. This framework will address the twin challenges of past investment backlogs and continuing growth in transport demand. The projects and programmes that make up Transport 21 aim to increase accessibility, ensure sustainability, expand capacity, increase use and enhance quality.

Multiple projects
Under Transport 21, RPA is managing a multi-billion Euro portfolio of infrastructure projects to 2015 with currently over 40 significant ongoing projects in various stages from feasibility planning to construction.

Ronan Murphy is risk manager at RPA. “Our biggest new challenge is the development and integration of Dublin Metro projects, that while at the same time managing a diverse programme of other projects each at a different phase in its own project lifecycle,” he said.

The Metro will be a modern, attractive and highly accessible commuter mass transit system which will connect the city to the north and the west suburbs and the airport. It presents two big challenges. Firstly, significant tunnelling works will be required beneath the heart of the city. Secondly, the cooperation of external stakeholders must be won. The scale of the Metro project requires RPA to achieve consensus from a wide range of local authorities, property owners and utility companies – all completely outside of its control.

“We also have ten major Luas tram projects such as new lines and extensions, an integrated city transport smartcard ticketing initiative, significant rolling stock additions and right now over 30 minor projects such as station enhancements and other improvements in our systems and services,” said Murphy.

Enterprise risk management
Risk and its impact on costs and schedules is considered from project feasibility right through to planning and delivery; and is also an important aspect of the operational management of the transport system.

“We see risk management as cyclical, entering the business with each new corporate initiative, passing down through to the goals of functional teams and into the projects themselves as programmes are undertaken,” said Murphy. “Project risk reporting and related decision making then reverts to the appropriate management level. For major issues a fully risk informed board decision is required.”

Bringing risk into project culture
In the past, RPA typically ran a number of different types of risk analysis due to the limitations of each - to arrive at a credible range for cost and time forecasts.

“We used Primavera's early Monte Carlo software to run regular risk simulations on contractor programmes and a Microsoft Excel-based scheduled risk model - although this was quite labour intensive to use due to the number of changes needed with each project update,” Murphy explained.

While Murphy worked closely with the commercial manager and main contracts manager to help ensure that risks were appropriately taken into account, project managers themselves did not get too deeply involved. At that stage the risk management process was viewed by many managers as something of a black art - they could not see where the risk was attached to the programme activities. This sense of frustration was summed up by one senior manager at the time who said: “Risk analysis is like trying to grab hold of water in a bucket!” He was referring to the fact that he could not see the correlation between the inputs and outputs for each risk scenario.

Towards a solution
RPA has particular responsibility under Transport 21 for managing ambitious programme and budget targets. This requires a much greater engagement of project managers than before – who need to account for uncertainly in their project budgets and schedules. The process now starts well in advance of traditional project management - at the project justification stage in support of funding decisions or decisions about a preferred design solution.

“It might be that many project managers prefer the excitement of proactive issue or crisis management rather than reflective or preventative risk management”, said Murphy. “The only way to achieve effective risk management at the project level was for project managers themselves to become responsible for accommodating it rather than treat risk as a separate silo. We needed each manager to take ownership of risk management so that it was not treated as separate from programme, cost or quality management.”

RPA looked for a means to win support from project managers in particular. It sought a tool that would help project managers visualise and manage risk more meaningfully in their budgets and schedules. For example when a project manager sees the critical path visibly change with each scenario; when they clearly see which risk is being applied to which activity; what the result is; and when they understand how their current cost and schedule data is being used to feed the risk analysis – the value of the risk analysis is difficult to dispute.

Under an enterprise risk management umbrella encompassing corporate risk, functional and project risk, Primavera Pertmaster is now RPA's standard risk analysis tool at the project level.

“We chose Primavera Pertmaster because it makes project risk analysis very accessible, very transparent and it is relatively easy to use compared to other risk analysis products,” said Murphy. “At RPA today, commercial and contract managers have regular review meetings using Primavera Pertmaster reports to help them assess progress on risk mitigation. One thing the reports highlight is which risks could have the greatest potential impact on their projects so that managers can selectively apply their time and effort on areas that will have the greatest pay-off in terms of mitigating the risks.”

Murphy continued: “We have widened the traditional view of upside risk or opportunity to include process improvements, commercial benefits and lessons learned.”

Project staff ‘buy-in'
Winning ‘buy-in' says Murphy, has been greatly assisted by project staff being able to see, graphically represented: the causes, correlations and consequences of good and bad management decisions before they decide to act. Risk analysis is now seen as a commercial imperative rather than something mystical.

“Project managers are closest to the coal-face,“ said Murphy. “They are in the best position to decide how to mitigate budget, schedule and contingency risks on their projects and accessible risk analysis helps them to make better decisions.”

Looking ahead
“We have brought risk management into our project culture without the overheads of a big risk management department,” said Murphy. “The role of risk and value management in RPA is now becoming increasingly enterprise wide.” The role now extends to establishing and guiding risk and value processes, supporting cultural buy-in and overseeing and embedding effective risk management practices that enable RPA to deliver value for money.

“We have proven the value of Primavera Pertmaster to our business – in particular to tough project and commercial managers, and we intend to scale use up significantly as major new projects come on stream,” concluded Murphy.

See also:
http://www.pertmaster.com
http://www.rpa.ie
http://www.transport21.ie

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