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Application
The proposed framework has been
applied to a newly conceived cross-country
oil pipeline transportation project in the
Western part of India. A typical oil pipeline
project consists of laying oil pipelines,
constructing pumping and delivery
stations, constructing tank farms,
constructing communication and a
cathodic protection infrastructure. A risk
management group consisting of nine
executives with more than 15 years of
project experience was formed. They
performed the following steps to analyze
risk of the project under study.
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operations
risk
(throughput, Step 7: Developing risk responses in
inspection,
maintenance, activity level
The risk management group through
environmental and social impact and
brainstorming developed the following
communication framework).
responses (see table 1) for each stretch.
Subsequently, they derived the
riskiness of each factor and subfactor and
onstruction projects often fail
calculated the likelihood of failure of each
because of wrong technology
pipeline stretch using the AHP framework
selection, poor environmental
(as demonstrated in step 2 and 4). Figure 4 management plan, political red tape, poor
shows the risk structure for activity level design
specification,
wrong
risk analysis. The analysis revealed that implementation
methods,
poor
implementation risk was most likely performance of contractors, and lack of
followed by procurement risk and pipeline maintaining materials delivery schedule by
stretch 3 is the most vulnerable.
the suppliers along with many other
As pipeline stretch 3 was routed reasons.
through the most difficult terrain, it was
The causes of failure could be
likely to experience risks in relation to classified into business risks (external) and
procurement method selection and operational risks (internal). Unless they are
possible poor performance of consultants, addressed in the early project-planning
contractors and suppliers. Additionally, this phase and adequate responses are planned
stretch was vulnerable from poor and implemented, projects inevitably fail
implementation method specification and to achieve their objectives.
organizational issues for implementation.
In the conventional approaches to
Pipeline stretch 1 was vulnerable from project appraisal and planning, quite often
environmental and social impact as it only business risks are addressed in order to
mostly traversed through normal terrain. justify the investment. Therefore, as the
The pipeline stretch 4 was exposed to projects progress with added learning,
mainly operational risk as it was connected there is need for additional resources and
to an offshore terminal.
knowledge in order to accomplish project
outcomes as planned, which become
impossible in many cases.
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REFERENCES
1. Akintoye, A.S. and M.J. MacLeod,
Risk Analysis and Management in
Construction, International Journal
of Project Management, Vol. 15, No.
1, (1997): 31 - 38.
2. Dey, P.K., Decision Support System for
Risk Management: a Case Study,
Management Decision, Vol. 39 No. 8.
(2001): 634 - 648.
3. Ndumbe, J.A., The Chad-Cameroon
Oil PipelineHope for Poverty
Reduction?.
Mediterranean
Quarterly, 13 (4), (2002): pp. 74-87.
4. Ogunlana, SO, H. Promkuntong, V.
Jearkjirn, Construction Delays in a
Fast Growing Economy: Comparing
Thailand With Other Economies,
International Journal of Project
Management, 1996.
5. PMBOK, A Guide to Project
Management Body of Knowledge,
Project Management Institute, US,
2004.
6. Saaty, T.L., The Analytic Hierarchy
Process, McGraw-Hill, US, 1980.
7.
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