Megaprojects and Megarisk
There are risks and costs to a program of action, but they are far less than the long-range risks and costs of comfortable inaction.
—John F. Kennedy
The Role of Risk Management on Megaprojects
Natural and man-made disasters around the globe, including earthquakes, cyclones, oil spills, tsunamis, devastating floods, and political unrest, remind us that catastrophic risk is all around us and, as project managers, we must be vigilant and constantly prepare for the unexpected. However, it is not just the catastrophic risk that is of concern on megaprojects, but the everyday routine performance of tasks potentially resulting in serious harm and damage claims that can exceed potential catastrophic loss. For instance, U.S. Department of Labor statistics indicate that on an annual basis slip and fall cases constitute the biggest single cause of loss on construction projects.
The Big Dig was one of the largest and most complex inner-city engineering projects ever designed, entailing many technological challenges that required a world-class risk management program (Tobin 2001). With more than 5000 workers, thousands of businesses, and more than 600,000 residents, it was critical that a framework be developed that could manage the unique and complex risk issues the project would face during its long life. Figure 9.1 depicts the risk framework that was deployed to seek mutual cooperation and agreement among multifunctional project stakeholders. The serious ...