Assignment 2: Project Risk Management & Contingency Determination

Overview:

Sydney Metro project details as per Assignment 1. As part of the risk management team of XYZ Contractor, you are supporting the submission for a Design and Construct (D&C) Contract. You should undertake the required risk management and assessment activities for determination of the required cost and schedule contingency allowance for the defined scope of project below from a D&C contractor's perspective. You are required to research and find more details of this major project in order to successfully complete the assignment.

Option A: Victoria Cross Station

Details:

• 31m below groundlevel
• Construction at the station includes excavating two shafts, one will be used for future station entry and vertical access and the second shaft will become a future servicefacility.
  • Shaft 1: $10m (-20%, +50%), 2 month (-10%,+100%)
  • Shaft 2: $5m (-20%, +50%), 1 month (-10%,+100%)
  • Excavation of shaft 2 will commence after completion of shaft1.
• 3 properties around the station need to be acquired in 6months.
  • Property 1: $5m (-10%,+30%)
  • Property 2: $2m (-5%,+20%)
  • Property 3: $3m (-5%,+25%)
  • If one owner can negotiate a higher price, the other owners will likely raise the prices too and viceversa.
  • It's expected the acquisition of these properties will be completed prior toconstruction.
• Otherconcerns:
  • Underground services (2 months delay and $2m-$3m-$8mcost)
  • 2 months delay in completion ofacquisitions
  • Wet weather and increase in non-working days, more than 30mm/day rain will cause 3 days non-working day duringexcavationOption
  • B:Barangaroo Station

Details:

• 25m below groundlevel
• The construction site is usedfor:
  • Launching the TBM under Sydney Harbour to the BluesPoint
  • Retrieving the cutter heads and shields of the two tunnel boring machines that tunnel from the Marrickville divesite
  • Excavation and construction of the future BarangarooStation
  • Shaft 1: $20m (-20%, +50%), 6 month (-10%,+100%)
• 2 properties around the station need to be acquired in 8months.
  • Property 1: $10m (-10%,+30%)
  • Property 2: $5m (-5%,+20%)
  • If one owner can negotiate a higher price, the other owner will likely raise the prices too and vice versa. No relationship between these properties and other properties at the Victoria Cross Station wasidentified.
  • It's expected the acquisition of these properties will be completed prior toconstruction.
• Otherconcerns:
  • Underground services (2 months delay and $1m-$2m-$6mcost)
  • 3 months delay in completion ofacquisitions
  • 2 months delay in launching theTBM
  • Wet weather and increase in non-working days, more than 30mm/day rain will cause 3 days non-working day duringexcavation

Option C:Tunnels between two stations

Details:

• TBMs will be used to excavate 15.5 kilometers of new twin rail tunnels between Chatswood and Marrickville.
  • Estimated cost of TBM: $500k (-10%,+30%)
  • Tunneling cost: ($600k-$700k-$1b)/km, length3km
  • Expected tunneling duration: 6 month (-1mth,+3mths)

• Sydney Metro City & Southwest needs fiveTBMs.
• OtherConcerns:
  • Breakdown of TBM, very unlikely but if occurs, it may cause 1-2-4 months delay with the repair cost of$50k-$50k-$200k

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