Risk Management Plan For Construction Of Sustainable Water Supply In Toom Village, Queensland

Project Information

Discuss about the Risk Management Plan For The Construction Of a Sustainable Water Supply For Toom Village In Queensland.

Project risk management plan is one of the most vital elements to consider for any project to achieve success. The identification and management of risks that arise require that plans be put fourth in advance to ensure they are handled with minimal consequences/ impacts on the project being undertaken. This is because, as organizations undertake projects, there are uncertainties that arise in the process of developing unique/ new products. This implies that chances are taken thus risks become integral part of the projects and have substantial effect on the success on the projects.

According to the demographic reports, over 30% 0f Australian people live in the rural areas of the country. However, it has been noted that the level of infrastructure development are substantially low and alarming more especially the roads network and the supply of sustainable clean water. This has been linked to the low standard of living in and around the rural areas of the country.

With the aim of improving the livelihood of the local/ rural people, an initiative has been taken by a nonprofit organization to fund the constructions of a modern well to supply clean water as well as constructing a modern reservoir tank to ensure water sustainability in supply to the people of  Toom village, Queensland, Australia. The well will be powered by solar energy, in which case is regarded to be more reliable and cheaper (James et al. 2014, p.1194). The construction of the project will be sub-divided into three phases, i.e. the construction of the well, installation of tank reservoir and pipelines to different parts of the village and finally installation of the solar enabled energy for pumping the water to different places of the village. The contract has been offered to a multi-national construction and plumbing company called McMillian Plumbing And Constructions Limited (MPCL).

For easy execution of the project, the works have been subdivided into three phases, implying that the activities/ phases will logically follow, one after the other. Each phases has a predetermined scope to be covered i.e.

Phase one; identification of convenient topological location, excavation and construction of the well.

Phase two; installation of tank reservoirs and pipelines to different points, and finally

Phase three; installation of solar enabled power for pumping of water from the well to the reservoir and pumping water to different destinations of the village (Santos, and Cabral 2008, p.347)

Project Plan Scope

It is typically right that wells cannot be built/ constructed anywhere, rather in specific locations of low altitude where there is sustainable and reliable  source of water. This therefore makes it important to conduct a preliminary study for the identification of a low altitude area convenient for a water source (Baranoff et al. 2009).

As highlighted earlier, there is low standards of living in the rural parts of Queensland, and one of the potential causes identified include the lack of supply of sustainable clean water to the locals. As a way of improving the livelihood of the local people, it was well thought that implementing a sustainable water supply to Toom village would be one of the strategies towards improving the livelihood of the locals. In other words, the project is intended to provide clean and sustainable source of water to the community of Toom village. The project will therefore help in reducing the hustle and cost of getting clean drinking water to the community (Leopkey and Parent 2009, p.187)

In regard to the AS/NZS 31000:2009 standards, it is typically substantial to identify the project contexts, that is to say the internal contexts, external contexts, the risk management contexts among others. This is as follows.

This mainly encompasses the internal linage of the project management partners and they include the project owners and partners. They play a sensitive role in the achievement of the project success, right from initiation of the project, provision of the financial needs and making of recommendations (Jayaratne 2008, p.550). Basically, it is the responsibility of the project owners to set the final deliverables of the project ie, they define the final output to be realized in a stipulated time period (Pritchard and PMP 2014).

The internal context also includes the monitory and supervisory team and are meant to foresee, evaluate, and analyze the operation and execution of the project being undertaken. In most insistences, the supervisory team are neutral bodies and play a role balance between the project owners and the contractors. Still in the internal context, the employees play one of the most vital role in project execution. they are meant to facilitate the running of the activities by playing their respective roles as allocated by te project manager (Di et al. 2009, p.479)

The external context basically imply the factors and variables that will affect the smooth running of the project activities. The external contexts are composed of both positive and negative variables and they include; the authorities to implement and approve the system forms before the project commences. The approvals seeks the project compatibility with the established rules and regulations. Relating the external context to the risk prevalence, standard terms of operation may hinder the intuition/ running of the project (Yeo and Ren, 2009, p.275).

Project Objectives

The risk management process concenters on the identification and management of the likely constraints and limitations that could lead to project failure or prolonging the project success. For a clear and effective management of the risks, there will be a definite process through which the risks will be estimated, tracked, managed, and controlled. In other words, it will be as indicated in the figure below (American Society for Healthcare Risk Management, 2009)

Recent studies have indicated that there is a continuous adaptation of risk management plans during implementation of project management programs. This is due to the fact of its relevance that it plays in the success of projects. Review of various literature indicated that some of the main causes of project management was due to poor risk planning and forecasting. Inefficiencies and insufficiencies in resource allocation accompanied by poor risk mitigation are the core causes of project failures (De et al. 2010, p.500).

According to Burnaby and Hass (2009), risk management contingence plays a major role in reducing the level of losses, which in most cases include administrative costs, management costs, and operation costs among others. The monetary analysis and evaluation in risk management is mainly composed of two variables ie the chances of a loss occurring and the losses to be incurred if the loss occurs. From the summary of various reports, risk management is an important and necessary practice that should be undertaken to enhance the probability of project success (Eickhoff-Shemek et al. 2009, p.37)

It is important to have an effective and well-defined communication plan for the running of the project. McMillian plumbing and construction limited will therefore formulate a communication strategy in which all the stakeholders will be engaged and contacted with minimal hustle/ difficulty. It is through effective communication plan that MPCL will be able to identify the different natures of risks and their level of impact on the project thence pointing out the most effective treatment of the respective risks (Burnaby and Hass 2009, p.539).

MPCL intends to have a unified communication linage in which information will be shared among the stakeholders. The involvement of different parties from different contexts to achieve a streamlined project goals and this will help in;

• Ensuring an effective transfer of information from one stakeholder to another in the rightful time thence reducing/ minimizing delay
• Understanding the interests of different stakeholders and identifying ways of how to achieve them accordingly (Marcelino 2o10, p.327).
• Sharing points of divergences among the stakeholders and working on how to generalize into one common goal that better satisfies the goals and aims of the project
• Raising of awareness and creating reminders in reference to the responsibilities allocated to different stakeholders of the project. this will help in limiting circumstances of tasks lagging behind due to inadequate information (Purdy 2010, p.881).
• Making inquiries and clarification regarding the knowledge of different parties during risk handling
• Providing of up to date information regarding the project status and the expected risks at all levels (Leoni et al. 2015, p.2344)

As briefed earlier, there are basically internal and external stakeholders who influence the smooth running of the project. The below table indicates the classification of the stakeholders

internal stakeholders	external stakeholders
the project owners/ the organization	the government authorities
the contractors	external funders
the employees
the management

The performance of stakeholders are dependent on their level of interest and power that they possess in the project. It is therefore typically important for MPCL to clearly understand the interests and powers possessed by is stakeholders (Olson et al. 2010, p.700). In other words, the level of impact each stakeholder has will be defined and the interests evaluated to determine the likely risks that may arise due to conflicts in interests and power. The below table indicates the different stakeholders and their influence/ interests (Hartmann and Driessen, 2013)

stakeholders	Interests and powers
The project owners/ the nonprofit organization	Managing of daily operations within the project Coverage of the financial costs of the project Managing and forecasting future growth opportunities Ensuring the sustainability of the project Appreciation of the final project
The project manager	Responsible for the allocation of tasks to the various stakeholders Supervision of the various activities executed by the team members Reporting to the project owners Communication of relevant information to the team members Managing of project resources and motivating of the members
employees	Remuneration and wages Running of the project activities Determining the quality of output Managing of time schedules
The government authorities	Overseeing the project in accordance to the established laws and standards Approval of the project Influencing the location of the project Offering of incentive to induce development
System implementers	Responsible for the credibility of the quality of the project Recommendation of contractors
The community members/ the villagers	Enjoy the final project outcome Welcoming the project in the area Source of work to the locals

 

The Definition of Contexts

The process of risk identification was conducted with the help of checklist, brainstorming, and review of the previous related projects to trace the likely risks that may come up during the project execution. This was conducted by the project general manager, financial manager and  human resource manager accompanied by the project team members (Zuñiga and Calvo 2010, p.662) An analysis and evaluation of the outcomes were done and the finally, the possible risks were put forth. These included the following;

Risk type	Likely lie to happen
Technological risks	Inefficiency in the implementation of modern tools and appliances by the project members
Financial risks	Inadequate financial resources for the purchase of modern tools and equipment Insufficiency in funds needed for training of employees on the new skills need in the installation of complicated tools and machinery Embezzlement and misappropriation of funds by the concerned authorities or stakeholders of the project Under estimation of project costs Inflationary tendencies which may lead to fall in value of money
Community resistance due to ignorance	Possibilities of resistance of the project due to ignorance and limited information The fear for environmental degradation as a result of excavation and concrete construction
Security threats	The loss of some equipment due to theft and burglary Unfaithful team members who may steal some of the project materials meant for construction
Managerial risks	Failure in the integration of employees thus possibilities of strike Inadequate knowledge regarding the implementation and installation of modern equipment Inconsistencies in the quality output of the workforce

This section takes an initiative of evaluating the risks involved and determining the possible impact that it is likely to create on the project. it helps in analyzing the level of impact the respective risks may cause. Classification of the risks are undertaken basing on the level of impact it has (Iaffaldano et al. 2009, p.159)

The risk analysis used a comprehensive matrix assessment method for the classification of the risks and there levels of impact. Possibilities of the risks happening were rated from a scale of 1 to 5. Furthermore, the scale also rates the level of impact that the risk may have in the project. This was intended to evaluate the most important and critical risks (Rezakhani 2012, p.27) In regard to this, a register of risks was formed thus identifying the most critical risks that need attention and the those that have less impact on the project. this was done as below.

Occurrence	Impact
Negligible 1	Very small 2	Moderate 3	High 4	Severe 5
Definite  5	M (Medium)	H	H (high)	E	E (Extreme)
Frequent  4	M	M	H	H	E
Common 3	L(Low)	M	M	H	E
Unlikely 2	L	M	M	M	H
Rare 1	L	L	M	ttM	M

Below indicates the occurrence scale

Definite           (5)	The probability of it happening can be defined to be o.93, highly possible
Frequent           (4)	There are always high chances of it happening
Common          (3)	The level of occurrence is usual
Uncommon      (2)	Only happens on rare occasions
Rare                  (1)	this can hardly occur

Impact	Risk description
Severe	Very serious influence and capable of failing the whole project
High	Requires the attention of the top management
Moderate	It has a substantial effect on the project
Small	Impact is minimal, it can easily be solved
negligible	the effect can be ignore

 

With the help of the risk identification, analysis and evaluation, the top management took the initiative to lay down a well strategized guidelines on how the respective risks will be handled/ treated basing on their likelihood or possibility of occurrence. The treatment strategies determine the adequate amount or resources needed to effectively treat the risks (Frau et al. 2010, p.786). For instance, the risks whose impact is severe require a bigger amount of resources to be allocated while the one with minimal amount of resources. Likewise, more attention should be paid to the risks that are definite while minimal attention may be paid to risks that have low chances of happening. Putting in considerations of human effectiveness, error and omission, the involved stakeholders i.e. the project team members, project manager, and other stakeholders should under go a training session Giezen et al. 2009, p.1175). Otherwise, the risk evaluation and control will be rendered irrelevant. This therefore implies that staff training and skill impacting is one of the vital parts of risk management and control. The training session should be carried out in a definite time interval with the emphasis of risk control measures. It is also important to note that new employees into the project must be taken through a training session after testing the competency through interview (Perea et al. 2011, p.e805).

The Risk Management Context

Furthermore, the publishing of a handbook to the project team will be secured. This is intended to serve as a guide as it clearly points out the logical steps to be undertaken in circumstances of risk occurrence. For effective grasping of the handbook, a step will be taken towards conducting a simple assessment test to ensure all the stakeholders are conversant with the risk management handbook. By so doing, it is highly probable that the risks will highly be managed thus guarantying a high possibility of project success.

However, it was noted that the process of risk control will need undertaking some analysis and identify some of the requirements. The requirements to be of use include;

• Acceptability of the risk control strategies
• Cost control
• A well specified timeline to help in the implementation of the controls
• Following the formulated rules and regulation
• Weighing and Comparing of the available alternative solutions and choosing the best basing on the project goals and objectives

In the process of defining the possible treatment strategies, ALARP (As Low As Reasonably Practical) principle will be used. The method focuses on risk reduction to the minimal extend on the project. Urgency in risk response is one of the strategies employed by the method  as it helps in reducing the extent to which the risk affects the project. this is implied in the preceding figure (Broekx et al. 2011, p.266).

In reference to the AS/ NZS ISO 31000:2009 standards, the following treatment strategies will be undertaken in order to treat the respective risks of the project. This is indicated as below;

Risk avoidance; this involves the process of foregoing the activities that may lead to the likely risks.

Risk reduction; basically involves taking of mitigation actions that helps in the possibility of the risk happening for example putting on reflection jackets, life jackets among other.

Risk transfer; the process of transferring the risks to a third party. In other words, the third part bares the risks. Two modes of transfer can be used, that is to say insurance and outsourcing. For example, the company/ the contractors may decide to insure the project. alternatively, project risks may be transferred to an external bearer through outsourcing (Berg, 2010, p.17) 

 Risk retention or acceptance. This involves accepting to face the risks and its influence in the project.

Risk transfer. Taking a critical evaluation of business principles; it is seldom hard to enjoy the business profits and remuneration without being able to stand the risks.

Risk sharing; this encompasses the sharing of risks among different organizations. His is usually undertaken in instances of high and expensive risks (Chang et al. 2010, p.866).

The project management team will therefore take a critical analysis and evaluation to identify the best and most applicable form to be chosen for the project.

Literature Review

After taking all the necessary processes of risk management, it is typically important to review the risks. The process will therefore be done to help in the identification of the weak and applicable strategies that were initially implemented. Furthermore, the review of risk management helps in making adjustments according to the changing context of the project (Berg, 2010, p.17. The following provide valid reasons for the review of risk management;

• Checking on the financial aspect of the project if it matches the estimated budgets for risk control
• Making of regular updates and determining the direction of the project success
• Reporting and making of adjustments as the project trends change
• Conducting of regular external audits to track the project progress and the financial stand.

Once all is done, the responsible risk manager will take the initiative of closing the risk venture

References

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