Risk Management on Tunnelling Projects Warwick University MSc course London Bridge Associates John Keys Risk Management on Tunnelling Projects Warwick University MSc course

Introduction to Risk Management London Bridge Associates Introduction to Risk Management What is risk management? - Definitions How are risks are identified Why we need Risk Management? Guidance on risk management (ABI Code) How risk is managed on tunnelling projects

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard Risk Risk Analysis Risk assessment Risk Mitigation Risk Register

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk is the likelihood of a hazard occurring x consequence of a hazard

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk is the likelihood of a hazard occurring x consequence of a hazard Risk Analysis

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk is the likelihood of a hazard occurring x consequence of a hazard Risk Analysis is the process of identifying risk factors and the quantification of those factors (estimating likelihood and magnitude of impacts)

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk is the likelihood of a hazard occurring x consequence of a hazard Risk Analysis is the process of identifying risk factors and the quantification of those factors (estimating likelihood and magnitude of impacts) Risk assessment

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk is the likelihood of a hazard occurring x consequence of a hazard Risk Analysis is the process of identifying risk factors and the quantification of those factors (estimating likelihood and magnitude of impacts) Risk assessment is the tool whereby risks are evaluated in terms of their likelihood and consequence and mitigation measures identified

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk is the likelihood of a hazard occurring x consequence of a hazard Risk Analysis is the process of identifying risk factors and the quantification of those factors (estimating likelihood and magnitude of impacts) Risk assessment is the tool whereby risks are evaluated in terms of their likelihood and consequence and mitigation measures identified Risk Mitigation

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk is the likelihood of a hazard occurring x consequence of a hazard Risk Analysis is the process of identifying risk factors and the quantification of those factors (estimating likelihood and magnitude of impacts) Risk assessment is the tool whereby risks are evaluated in terms of their likelihood and consequence and mitigation measures identified Risk Mitigation is the process of developing a plan to respond or deal with risk on a project

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk is the likelihood of a hazard occurring x consequence of a hazard Risk Analysis is the process of identifying risk factors and the quantification of those factors (estimating likelihood and magnitude of impacts) Risk assessment is the tool whereby risks are evaluated in terms of their likelihood and consequence and mitigation measures identified Risk Mitigation is the process of developing a plan to respond or deal with risk on a project Risk Register

What is risk management? - Definitions London Bridge Associates What is risk management? - Definitions Hazard is something with the potential to cause harm or change the desired outcome Risk is the likelihood of a hazard occurring x consequence of a hazard Risk Analysis is the process of identifying risk factors and the quantification of those factors (estimating likelihood and magnitude of impacts) Risk assessment is the tool whereby risks are evaluated in terms of their likelihood and consequence and mitigation measures identified Risk Mitigation is the process of developing a plan to respond or deal with risk on a project Risk Register is a method for recording the project risks for subsequent management

London Bridge Associates Risk Management “I have made my greatest engineering contributions not by solving difficult problems but by avoiding them” (Conlon 1989)

Value dependent Magnitude dependent London Bridge Associates How is risk identified and evaluated? Cover in more detail in part 2 – Risk Assessments Value dependent Everyone sees risks differently and we all can have different tolerance level Magnitude dependent The greater the payoff, the more the risk is acceptable Time dependent Risk is a future event, time affects its perception. What is seen today as a risk may not be tomorrow.

Why do we need Risk Management? London Bridge Associates Why do we need Risk Management? Why do we need Risk Management?

History of significant Tunnel incidents London Bridge Associates History of significant Tunnel incidents 1. Green Park, London, UK, 1964 2. Victoria Line Underground, London, UK, 1965 3. Southend-on-sea Sewage Tunnel, UK, 1966 4. Orange-fish Tunnel, South Africa, 1970 5. Munich Underground, Germany, 1980 6. Gibei Railway Tunnel, Romania, 1985 7. Moda Collector Tunnel, Istanbul Sewerage Scheme, Turkey, 1989 8. Seoul Metro Line 5 - Phase 2, Korea, 17 Nov. 1991 9. Seoul Metro Line 5 - Phase 2, Korea, 27 Nov. 1991 10. Seoul Metro Line 5 - Phase 2, Korea, 11 Feb. 1992 11. Seoul Metro Line 5 - Phase 2, Korea, 7 Jan. 1993

History of significant Tunnel incidents London Bridge Associates History of significant Tunnel incidents 12. Seoul Metro Line 5 - Phase 2, Korea, 1 Feb. 1993 13. Motorway Tunnels, Austria, 1993-1995 14. Heathrow Express, UK, 21 Oct. 1994 15. Munich Underground, Germany, 27 Sept. 1994 16. Los Angeles Metro, USA, 22 June 1995 17. Docklands Light Rail, UK, 23 Feb. 1998 18. Athens Metro, Greece, 1991-1998 19. Sewage Tunnel, Hull, UK, 1999 20. Taegu Metro, South Korea, 1 Jan. 2000 21. Channel Tunnel Rail Link, UK, Feb. 2003 22. Météor Metro Tunnel, France, 14 Feb. 2003

History of significant Tunnel incidents London Bridge Associates History of significant Tunnel incidents 23. Shanghai Metro, China, 2003 24. Hsuehshan Tunnel, Taiwan, 1991-2004 25. Stormwater Management and Road Tunnel (SMART), Malaysia, 2003 - 2006 26. Guangzhou Metro Line 3, China, 1 April 2004 27. Singapore MRT, 20 April 2004 28. Kaoshiung Rapid Transit, Taiwan, 10 Aug. 2004 29. Barcelona Metro, Spain, 27 Jan. 2005 30. Lausanne M2 Metro, Switzerland, 22 Feb. 2005 31. Lane Cove Tunnel, Australia, 2 Nov. 2005

History of significant Tunnel incidents London Bridge Associates History of significant Tunnel incidents 32. Kaoshiung Rapid Transit, Taiwan, 4 Dec. 2005 33. Sao Paulo Metro Station, Brazil, 15 Jan. 2007 34. Guangzhou Metro Line 5, China, 17 Jan. 2008 35. Circle Line 4 Tunnel, Singapore, 23 May 2008 36. Hangzhou Metro Tunnel, China, 15 Nov. 2008 37. Cologne Metro 2009

Tunnel failures in Hong Kong London Bridge Associates Tunnel failures in Hong Kong 1. MTR Modified Initial System, Prince Edward Station, Nathan Road, 12 Sept. 1977 2. MTR Island Line, 22 Hennessy Road, 1 Jan. 1983 3. MTR Island Line, Shing On Street, Shau Kei Wan, 23 July 1983 4. MTR Island Line, 140-168 Shau Kei Wan Road, 16 Dec. 1983 5. Kowloon Southern Link Contract KDB 200, Canton Road, 21 Oct. 2006 6. Kowloon Southern Link Contract KDB 200, Salisbury Road, 3 June 2007

London Bridge Associates

London Bridge Associates Lausanne Tunnel (Switzerland) Feb 2005

London Bridge Associates

London Bridge Associates Munich Metro 1994

London Bridge Associates Los Angeles Metro June 1995

London Bridge Associates DLR February 1998

London Bridge Associates Sewerage Tunnel , Hull 1999

London Bridge Associates SOCATOP Tunnel A86 (France) - 2002

London Bridge Associates Heathrow tunnel collapse UK (1994)

London Bridge Associates Heathrow tunnel collapse UK (1994)

London Bridge Associates

London Bridge Associates

London Bridge Associates Channel Tunnel Rail link 2003

London Bridge Associates Sao Paulo tunnel collapse (Brazil 2007)

London Bridge Associates Cologne Tunnel - 2009

London Bridge Associates Gerrards Cross Tunnel collapse Aug 2005 (UK)

London Bridge Associates Subway tunnel in Hangzhou (China 2008)

London Bridge Associates Singapore MRT April 2004

London Bridge Associates Singapore MRT April 2004

Major Tunnel Losses since 1994 London Bridge Associates Major Tunnel Losses since 1994

Major Tunnel Losses since 1994 London Bridge Associates Major Tunnel Losses since 1994

Why do we need Risk Management? What happens if risks are ignored? London Bridge Associates Why do we need Risk Management? What happens if risks are ignored? Injury or fatalities Increased construction costs Loss or reduction in profit Damage to reputation Difficulties obtaining insurance

Insurance Market Concerns London Bridge Associates Insurance Market Concerns Trends in the Tunnelling Industry High risk type construction methods Trend towards design + build contracts One-sided contract conditions Fierce competition in construction industries Low financial budgets / Tight construction programmes Tunnelling industry has had an inconsistent approach to Risk Management Insurance seen as the “cheapest risk management tool” Insurance industry not a profitable business Insurers started to query the approach

Stop offering Insurance in tunnelling sector London Bridge Associates Options for Insurers Stop offering Insurance in tunnelling sector Still an option for some insurers Increase terms, excesses, restrict cover Potentially becoming price prohibitive Try to tackle issues and perceptions using a Code of Practice agreed by the tunnelling Success of “Joint Code of Practice for prevention of fire on building sites” - the “Fire Code” Work with Industry in UK to develop and then expand overseas

Acknowledge that the code will not prevent claims happening London Bridge Associates Insurer’s objectives Agree appropriate Risk Assessment and on-going Risk Management procedures for tunnelling sector with an aim to: Reduce the probability of a loss happening Reduce the size of a claim when it happens Give Insurers a better picture of the risks during underwriting process Increased certainty on financial exposure Acknowledge that the code will not prevent claims happening

London Bridge Associates Insurer’s objectives Create an ‘Auditable’ trail for Insurers to ensure compliance Enable Underwriters to have confidence that the tunnelling sector can be profitable for insurers Export “best practice” overseas London remains centre for insurance’s of major projects around the world

Presented the initiative to BTS Committee 18/10/2001 London Bridge Associates Insurer’s objectives The way forward Approach to BTS Presented the initiative to BTS Committee 18/10/2001 BTS formed sub-committee Code of Practice issued 2003. Code in force today

Association of British Insurers (ABI) and the BTS London Bridge Associates JOINT CODE OF PRACTICE FOR THE PROCUREMENT, DESIGN AND CONSTRUCTION OF TUNNELS AND ASSOCIATED UNDERGROUND STRUCTURES IN THE UNITED KINGDOM Association of British Insurers (ABI) and the BTS

Background to the Code Initiative Key points arising from the Code London Bridge Associates Joint Code of Practice for Risk Management on Tunnel Projects (Association of British Insurers) Background to the Code Initiative Key points arising from the Code Implementation of the Code Best Practice Guidance / Recommended reading

Association of British Insurers (ABI) JOINT CODE OF PRACTICE London Bridge Associates Association of British Insurers (ABI) JOINT CODE OF PRACTICE

Types of project insurance London Bridge Associates Types of project insurance Employers Liability (EI) Professional Indemnity (PI) Contractor’s All Risk (CAR) Client Insurable Risks Joint Code addresses risk management in the following key areas: Health and safety - fatalities Environmental impact Design Phase Construction Phase Damage (construction works or third parties / existing facilities) Joint Code

Identification of tunnelling risks? London Bridge Associates Identification of tunnelling risks? The Joint Code states: “Hazards shall be identified and evaluated on a project-specific basis and their consequent risks shall be identified and quantified by Risk Assessments through all stages of a project “ Project Development Stage (conceptual design) Detailed Design Stages Procurement Stage Construction Stage Operational stage for any stipulated maintenance period. 54

Contents of the Joint Code London Bridge Associates Contents of the Joint Code Objective of the Code Compliance with the Code Introduction Definitions and Terms used in the Code Risk Assessment and Management Client Role and Responsibilities Project Development Stage Construction Procurement Stage Design Construction stage

Joint Code of Practice for Tunnelling Section 1 - Objective of Code London Bridge Associates Joint Code of Practice for Tunnelling Section 1 - Objective of Code Promotes Best Practice Reinforces that the code applies to all stages of a project i.e. Development, Design and Construction Does not supersede, replace or override existing standards etc Contains a number of mandatory requirements

Joint Code of Practice for Tunnelling Section 2 – Compliance London Bridge Associates Joint Code of Practice for Tunnelling Section 2 – Compliance Compliance with the Code is a pre-requisite for obtaining Insurance Sections 3, 4 & 5 - Risk Management Highlights the need for Risk Assessment and Risk Management and identifies the processes expected

Joint Code of Practice for Tunnelling London Bridge Associates Joint Code of Practice for Tunnelling Section 5 - Client Role & Responsibilities Client to carry out design studies Requirements identified during the procurement process Requirements identified on the information supplied to tenderers Client to ensure sufficient time and budget to investigate and prepare designs Client to ensure that suitably qualified and experienced personnel are employed Conduct Risk Assessment and Prepare a Risk Register Include effects on: Third Parties Environment Risk Register given to Contractor

Joint Code of Practice for Tunnelling London Bridge Associates Joint Code of Practice for Tunnelling Section 6 - Project Development stage Highlights the need for Best practice in Site Investigation SI to be planned, procured and executed by competent personnel Highlights the need for Risk assessments for the evaluation of Project Options Highlights the concept of Ground Reference Conditions

Joint Code of Practice for Tunnelling London Bridge Associates Joint Code of Practice for Tunnelling Section 7 - Construction Contract Procurement Stage Requirement for full disclosure of Hazards and associated risks to all Tenderers Clause 7.2.5 requires Tenderers to provide own assessment of Ground Reference Conditions baseline where not provided by Client Tenderers to provide Risk Assessments appropriate to their methods of working

Joint Code of Practice for Tunnelling London Bridge Associates Joint Code of Practice for Tunnelling Section 7 - Construction Contract Procurement Stage Places a requirement on the Client for: the allocation of sufficient time and resources for the preparation of contract documentation without the need for subsequent supplementary documentation to make provision for reasonable time for tendering to reflect the type of contract, the complexity of the project and the requirements of the contract documentation in terms of a tender submission

Joint Code of Practice for Tunnelling London Bridge Associates Joint Code of Practice for Tunnelling Section 8 – Design Section is not prescriptive in terms of Design Methods Requirement for Design to assess all items likely to impact on the Design both technical, commercial, safety and environmental. Carry out design checks appropriate to the level of risk

Joint Code of Practice for Tunnelling London Bridge Associates Joint Code of Practice for Tunnelling Section 8 – Design Clause 8.3.1. states “The fundamental objective of the design process is that of achieving a robust design, that is a design where the risk of failure or damage to the Tunnel Works or to a Third Party from all reasonably foreseeable causes, and including health and safety considerations, is extremely remote during the construction and the design life of the Tunnel Works. High consequence but low frequency events that could affect the works or a Third Party shall also be considered”

Joint Code of Practice for Tunnelling London Bridge Associates Joint Code of Practice for Tunnelling Section 8 – Design Clause 8.3.4 states “The design process shall include, where appropriate, sensitivity studies to assess the impact of: a) construction tolerances b) variation in geotechnical design values c) variation in materials characteristics d) variation in workmanship and geometry e) methods of construction and the implementation of mitigation/contingency measures f) natural perils exposure in the region of the project such as flood, storm, seismic or tidal effects

London Bridge Associates Joint Code of Practice for Tunnelling Section 8 – Design Clause 8.5.1. states “The Designer shall ensure that adequate construction expertise is available to undertake formal reviews of the design to assess and confirm the appropriateness of the design in terms of Constructability, including health and safety considerations in relation to BS6164”

Joint Code of Practice for Tunnelling London Bridge Associates Joint Code of Practice for Tunnelling Section 9 – Construction Stage Construction methods based on Best Practise Suitable time allowance for Pre-Construction activities such as preparation and submission of a) Project Risk Management Plan incorporating a Construction Stage Project Risk Register b) Health and Safety, Quality, and Environmental Plans c) Management Plan d) Procurement of items which involve long lead items e) Pre-construction Planning and Method Statements f) Obtaining all necessary statutory consents g) Constructability reviews. Requirement for Risk Management

Joint Code of Practice for Tunnelling London Bridge Associates Joint Code of Practice for Tunnelling Section 9 – Construction Stage Requirement for Training Plan for key personnel and operatives Requirements for Management Systems including a Risk Management Plan Management of “Change” and to notify the Insurer where a “change” affects the level of risk

Joint Code - Commercial Points London Bridge Associates Joint Code - Commercial Points Client must undertake to comply with the code Client to give the Insurer a right of access to site and documents Following a breach of the code, Insurers may inform Client / Contractor of the nature of the breach, remedial measures expected and timeframe to correct Insurers may suspend or cancel insurance until breaches are remedied Client must demonstrate that the project has the best chance of succeeding Insurers may impose limitation on the cover being offered

Joint Code - Key requirements London Bridge Associates Joint Code - Key requirements Procurement Stage Underwriter will expect Client and Designers to demonstrate compliance with code or insurance cover will not be offered Underwriter will want a Risk Register with the largest identified risks quantified in order to agree a policy sub-limit Demonstrate that everyone has thought about the problems and the potential problems which may arise Demonstrate that something will be done once problems have been identified. Construction Stage On-going compliance with Code will be monitored through surveys

London Bridge Associates Compliance surveys Qualified personnel will be used to carry out surveys Underwriters will make final decision Expect dialogue during visits Very few suspensions or cancellations of building policies - feedback from “Fire Code” “Fire Code” is now built into contract conditions

Types of risks on tunnelling projects London Bridge Associates Types of risks on tunnelling projects Ground Conditions Obstructions within the ground Settlement – impact on structures above ground Ground movement below ground Third Party risks – interfaces with other parties Health and Safety risks Quality risks Environmental risks

How risk is managed on tunnelling projects London Bridge Associates How risk is managed on tunnelling projects Design Stage Designer’s Hazard identification process Construction Stage Project Risk Management Plan Project Management Plans Health and Safety Plan Environmental Plan Quality Plan Site Procedures Training Plan

How risk is managed on tunnelling projects London Bridge Associates How risk is managed on tunnelling projects Safe Systems of work This is a legal obligation on all employers Planning Method Statements Procedures Training

How risk is managed on tunnelling projects London Bridge Associates How risk is managed on tunnelling projects Risk Ownership Risk is usually shared and owned by the party who is best placed to manage that risk Contract – Risk allocation and sharing On site – Risk Register

How risk is managed on tunnelling projects London Bridge Associates How risk is managed on tunnelling projects How does poor risk management manifest itself Time Money Physical Injury or Damage Reputation

Summary Risk on tunnel projects can be extremely high London Bridge Associates Summary Risk on tunnel projects can be extremely high Tunnelling projects have become very expensive to insure “Joint Code of Practice for Risk Management of Tunnelling Works” was developed as a professional risk management tool Objective of the Code is to improve risk management standards Compliance with the Code now compulsory for all UK tunnelling projects International version of the Code now in force worldwide If the Code does not improve results there is a real danger that it will be very difficult to obtain any insurance for projects involving tunnelling

Risk Management for Tunnels Recommended reading London Bridge Associates Risk Management for Tunnels Recommended reading HSE's publication on "The Risk to Third Parties from Bored Tunnelling in Soft Ground" Research report 359 June 2005. http://www.hse.gov.uk/research/rrpdf/rr453.pdf Working Group 2 - ITA WG2 “Guidelines on Risk Management” http://www.ita-aites.org/cms/ita-aites-home/publications/wg-publications/working-groups/datum/2008/05/28/guidelines-for-tunnelling-risk-management.html HSE's publication on the "Safety of the New Austrian Tunnelling Method" Heathrow collapse HSE publication on ALARP principles - Reducing risk , saving people http://www.hse.gov.uk/risk/theory/alarp1.htm Detailed guidance is available in British Standard 6164 “Code of practice for safety in tunnelling in the construction industry” British Tunnelling Society http://www.britishtunnelling.org.uk/publications.php International Association of Engineering Insurers http://www.imia.com/downloads/external_papers/EP24_2006.pdf

“No construction project is risk free. Risk can be managed, minimised, London Bridge Associates “No construction project is risk free. Risk can be managed, minimised, shared, transferred or accepted. It cannot be ignored.” Questions?