An editorial published in the Project Management World Today Web Magazine. Updated here May 2001.


Musings Index

A Case for Risk Management

Early in the morning of October 24, 1994, a gaping hole suddenly appeared in the middle of a construction site in the vicinity of Heathrow airport, London, England. According to reports, the hole continued to enlarge for several days bringing disarray and confusion to the airport. Surprisingly, and fortunately, no one was killed or even injured by the collapse, but it was arguably the worst civil engineering disaster in the UK in the last quarter century.

The hole resulted from the collapse of a tunnel roof on a contract employing the method of sprayed concrete. To recover, it reportedly took almost two years and some US $90 million, nearly three times the original contract value. Other contracts using the same approach were also halted during investigations and large fines were levied on the faulted contractors.

After years of study by a specialist team, the report of the United Kingdom's Health & Safety Executive concluded that a chain of events involving a lengthy list of design, workmanship, quality control and management shortcomings were at the root of the problem. This report was only published following, and partly as a result of, the inevitable legal proceedings. Some of the report's findings are most instructive. For example:

The report says the event showed "all the hallmarks of an organisational accident." And "The collapse could have been prevented but a cultural mindset focused attention on the apparent economies and the need for production rather than the particular risks."

"Warnings of the approaching collapse were present from an early stage in construction but these were not recognized." Evidently errors were made "leading to poor design and planning, a lack of quality during construction, a lack of engineering control and most importantly a lack of safety management."

"Such accidents must be prevented through effective risk management. The industry cannot simply rely on good fortune", and "Risk assessment should be a fundamental step in the procedures adopted by all parties: It is inappropriate wholly to leave the control of risk to contractors." The report particularly singles out new forms of contract or new technologies in which the parties have a poor understanding of their respective roles.

This case will remind older readers of the Station Square Development roof collapse in 1988, in greater Vancouver, Canada. This case was investigated by a Commissioner Inquiry and was widely reported in the project management press in North America. The failure was attributed to a specific flaw in the structural roof design. However, any project manager reading the Commissioner's report will recognize the chain of events, the adverse decisions, and the structural warnings prior to the failure as the same failure of "project management attitude" so evident in the London case.

Meantime, over in Hong Kong a government-appointed committee has released a report "Construct for Excellence" containing over 100 recommendations. These call for public works officials to end inter-departmental disputes, establish better cooperation and put greater emphasis on quality when awarding design and construction contracts. The report follows the disclosure of a number of scandals involving corruption, shoddy foundation work and poor quality construction.

Does all this mean that we are learning? Hardly. Much lip service is given to risk management, and the limited number of projects that do include a formal risk management component typically do so as part of the project's planning phase. Thereafter, this planning exercise is carefully filed, rarely again to see the light of day. Unlike safety, we suspect that very few projects of any kind have risk management as a standard agenda item at their regular progress meetings. Just as quality control focuses on the detail, quality assurance takes a much broader view involving attitude. Similarly, so it is with safety and risk management but clearly, risk management has not yet come of age.

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