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

2. 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

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

4. 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

5. 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

6. 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

7. 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

8. 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)

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

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

16. 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.

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

18. 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

19. 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,
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,
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

20. History of significant Tunnel incidents
London Bridge Associates
History of significant Tunnel incidents
23. Shanghai Metro, China, 2003
24. Hsuehshan Tunnel, Taiwan,
25. Stormwater Management and Road Tunnel (SMART), Malaysia,
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

21. 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

22. 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, 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

23. London Bridge Associates

24. London Bridge Associates
Lausanne Tunnel (Switzerland) Feb 2005

25. London Bridge Associates

26. London Bridge Associates
Munich Metro 1994

27. London Bridge Associates
Los Angeles Metro June 1995

28. London Bridge Associates
DLR February 1998

29. London Bridge Associates
Sewerage Tunnel , Hull 1999

30. London Bridge Associates
SOCATOP Tunnel A86 (France)

31. London Bridge Associates
Heathrow tunnel collapse UK (1994)

32. London Bridge Associates
Heathrow tunnel collapse UK (1994)

33. London Bridge Associates

34. London Bridge Associates

35. London Bridge Associates
Channel Tunnel Rail link 2003

36. London Bridge Associates
Sao Paulo tunnel collapse (Brazil 2007)

37. London Bridge Associates
Cologne Tunnel

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

39. London Bridge Associates
Subway tunnel in Hangzhou (China 2008)

40. London Bridge Associates
Singapore MRT April 2004

41. London Bridge Associates
Singapore MRT April 2004

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

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

44. 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

45. 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

46. 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

47. 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

48. 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

49. 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

50. 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

51. 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

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

53. 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

54. 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

55. 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

56. 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

57. 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

58. 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

59. 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

60. 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 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

61. 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

62. 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

63. Joint Code of Practice for Tunnelling
London Bridge Associates
Joint Code of Practice for Tunnelling
Section 8 – Design
Clause 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”

64. Joint Code of Practice for Tunnelling
London Bridge Associates
Joint Code of Practice for Tunnelling
Section 8 – Design
Clause 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

65. London Bridge Associates
Joint Code of Practice for Tunnelling
Section 8 – Design
Clause 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”

66. 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

67. 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

68. 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

69. 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

70. 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

71. 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

72. 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

73. 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

74. 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

75. 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

76. 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

77. 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
Working Group 2 - ITA WG2 “Guidelines on Risk Management”
HSE's publication on the "Safety of the New Austrian Tunnelling Method" Heathrow collapse
HSE publication on ALARP principles - Reducing risk , saving people
Detailed guidance is available in British Standard 6164 “Code of practice for safety in tunnelling in the construction industry”
British Tunnelling Society
International Association of Engineering Insurers

78. “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?