Virginia Greiman BigDig

Lessons on Risk Management
from the Big Dig and other

Complex Megaprojects
Virginia A. Greiman
Professor of Megaprojects and Planning
Boston University
Copyright 2013 by Virginia A. Greiman
EuroTunnel | Manages the Channel Tunnel between Britain and

France
Founded in 1986 the Tunnel was Completed in 1994. The

cost was double the forecast and in 1995 Eurotunnel
stopped interest payment on its loans resulting in a decade
long process of restructuring. Debt service will not be fully
repaid for decades.
While I am glad that the toll payers are finally able to cross the new eastern span
of the Bay Bridge, it is important that we examine the problems that caused the
construction of the new span to be 10 years late and $5 billion over budget,
Senator DeSaulnier, California Housing and Transportation Committee Chair,
October 30, 2013
California $68 Billion High Speed Rail
California high-speed rail will connect the mega-regions of the

state, contribute to economic development and a cleaner
environment, create jobs and preserve agricultural and
protected lands. By 2029, the system will run from San
Francisco to the Los Angeles basin in under three hours at
speeds capable of over 200 miles per hour.
5 of 26 miles of tunnels now built
Canary Wharf Terminal
One of the five 10m tunneling machines

Bostons Big Dig
54 Designs
5 Major Interchanges
Landmark Cable-stay Bridge
Jacked Tunnels
Immersed Tubes
Soil Freezing
Deep Soil Mixing
8 miles of Slurry Wall
Jet Grouting
Excavation and Parks
132 Construction Packages

161 Lane Miles
Cost of Bostons Big Dig
EIS - Environmental Impact Statement
ICE - Interstate Cost Estimate
Copyright 2013 Megaproject Management by John A. Wiley, Hoboken, NJ
CSU Cost and Schedule Update
Bostons Big Dig
Bostons Big Dig
Megaprojects and Mega Risk

Understanding Program Risk
Management
Risk Program Structure

Project Company
Organizational
Structure
(Project)
Risk Management
Executive Team
Dedicated Staff
Contractual
Structure
(Risk)
Risk Allocation, Risk
Mitigation, Risk
Control
and Risk Incentives
Governance
Structure
(Finance/Authority)
Decision Making
Dedicated Budget
Direct Report
Core Management
Support
Key takeaway - Structure Matters

Seven Cost Centers
Construction
Program Management
Design
Force Accounts
Right of Way
Risk Management
Geotechnical
Is your PPP a Partnership or a Risk?

Private Entity
Management
Consultant
Preliminary
Designer
Contract
Administrator
Construction
Manager
Project Company
Integrated Project
Organization
May include both
public and private
sector employees
Public Entity
State and Federal

Government
Advocate for the
Public
Commitment of
Funding, Services or
Both
Role:
Role:
Role:
Technology
Design
Construction
Expert Advice
Plan Project
Execute Project
Control Project
Close Project
Financing
Governing Board
Project Management and
oversight
Interface with Stakeholders
Regulator
Central Artery/Tunnel Project Risk Management Organization

Core
Managers
Support
Project Director
Program
Manager
Risk Manager
Legal
Technical
Services
Risk Finance
OCIP Trust
Regulatory/
Utility
Insurance
Carriers
Insurance
Brokerage
/Consultants
Safety & Health

Integrated Team
Contractor
Safety Rep.
Audits
Environmental
Consultant
Non-Wrap-Up
Broker/Insurance
Critical
Infrastructure
Automobile
Liability
Risk Mgt
Consultant
Workers
Compensation
& General Liability
WC/GL Loss Control

Claims Adjusting
Airport Contractor
Liability
Airport Contracts
Claims Adjusting
Builders Risk
Builders Risk Claims

Adjusting
Railroad Surety
Claims Adjusting
Professional
Liability
Loss Prevention
Claims Adjusting
Safety Partner
Management
Claims
Services
DBE Broker
London
Broker
Claims Handling
Services
Employers Liability
London Airport
Contractors/Excess
Prof. Liability/
GL Excess
Professional Liability
Claims Adjusting
CA/T Project Insurance Wrap-up

Coverages ($609M) (2006 CA/T Project Finance Report)
60
Administrative Costs and

Safety Mitigation
Railroad Protective Liability
Airport Contractors Liability
Professional Liability
11
48
Builders Risk
215
General Liability/Excess
Liability
Worker's Compensation
262
0
100
200
300
What is Project Success?
Being on Time and Budget?
Meeting Goals?
Achieving Sustainability?
Key takeaway - Know what success means on your project
Traditional Iron Triangle
Scope
Cost
Time
Design, Risk, Safety and Quality Decisions

Emerging: Sustainability of economic

social and institutional benefits
Open space, parks and islands
Re-knitting neighbourhoods and entry points
Expansion of shellfish population
Ventilation/air quality
Smart highway system
Economic opportunity/trained workforce/minority/women

business development
Utility corridor
Increased property values
Intermodal
The Importance of Context

Context awareness and sensitivity to context on the part of
project decision makers is vital for both the successful
planning, appraisal and delivery of MTPs and suitable
treatment of contextual risks, uncertainties and
complexities.
Omega Centre, Mega Projects, 2012
Key takeaway Environmental factors, values, mega events and

political influence/support remains as critical contextual factors over the
entire life cycle
The Big Digs Risk Management

Mission Zero Accident Philosophy
To protect the Commonwealth of Massachusetts, Big Dig contractors,
consultants, workers and the general public against catastrophic loss
by:
Operating an integrated world-class Risk Management Program for:

Engineering and Construction
Loss Control
Safety and Health
Big Dig Safety and Health

Programs and Practices
Zero Accident
Tolerance
Training and
Best
Practices
Safety Incentive
Program (SHARE)
1,344
Environmental
Commitments
Emergency
Response
Continuous
Improvement
Practices
Owner Controlled Insurance
Program
Shared
Responsibility
Public
Image
Substance Abuse
and Prevention
Program
Community
Involvement
Program
Mitigation
Program
Threat
Assessment Abutter
Program
And many more
Classification of Catastrophic Loss
Cave-in, Collapse,
Landslide
Earthquake, Water, Wind
Fire, Flood, Tidal Waves
Human Error
Terrorism
Pollution
Chemical Leakage
Utility Disruption
Funding
Revenue Risk
Depression,
Recession,
Inflation
Political/Regulator
Risk
Human Perils
Natural Perils
Economic
Perils
Technological
Perils
Mining Operations
Ground Freezing
Deep Water
Tunneling
The Role of Improvization and

Intuition in Risk Management
U.S. Airways Flight 1549, Hudson River, January 15, 2009

How do you know when your

project is in trouble?
Costs Rising and Schedule Delays?
Safety Violations and Lost Time Increases?
Near Misses and Substantial Rework?
Exposures Increasing and Claims growing?
Ethical Problems?
Critical long-term safety failure?
Key takeaway - All of the above are warning signs your program is at risk
Key Checkpoints for Risk

Management
Assumptions Do you review assumptions regularly?
Perceptions Are they correct?
Constraints Are they realistic?
Root Causes Have you identified the root cause of every event or just the
symptoms?
Cultural Adaptation Has change occurred?
Key takeaway - Risk assessments should incorporate the above checkpoints
Managing Risk and Change through

Integration and Collaboration
We cant solve problems by using

the same kind of thinking we used
when we created them.
- Albert Einstein
Integration on large and complex

projects: Managing the four Ps
T
The People
The
Programs
The
Processes
The
Project
Methodologies
Partnering
Technology
Advancement
Risk
Management
Stakeholder
Participation
The Programs
Central Artery/Tunnel
Project Integrated
Programs
Quality
Assurance
Claims & Changes
Audit and
Oversight (OCC)
Safety and
Health
Dispute
Resolution
Utility
Protection
Knowledge
Transfer and
Innovation
Questions
Are you successfully integrating
Your People?
Your Processes?
Your Programs?
Your Project Methodologies?
Where can you improve?
Risk Reality and Impact of Unknowns

Realized
Known risk
Tunnel or
building collapse
Fire in tunnel
traffic
Congestion
Snowstorm
Worker injuries
Expectancy:
(Quantitative)
Experts
Experience
Unknown
Floods
Tunnel Leaks
Utility
Disruptions
Realized:
Actual Losses
Incurred
Known and
Unknown Risk
Lessons Learned
Best Practices
Flood Gates
Broken?
Archive
R
locations?
Subsurface
Conditions?
Uncertainty:
Intuitive
Processes and
Procedures
Controls
Recordable Rate
Rate
People
Peak Manpower/Year
Actuals per year
5000
18
4500
16
4000
14
12
National Average
3500
3000
10
8
2500
2000
1500
500
Big Digs Worst Disaster
2006 Ted Williams Tunnel Roof Collapse

Source: NTSB Report
NTSB Findings
1. Lack of understanding and knowledge in the construction community about
creep in adhesive anchoring systems.
2. Prior Incident - Failure of Powers Fasteners, Inc., to determine that the
anchor displacement that was found in the high-occupancy vehicle tunnel in
1999 was a result of anchor creep.
3. Failure of the owner to implement a timely tunnel inspection program that
would likely have revealed the ongoing anchor creep.
Key takeaway - Are we assuming our

contractors have the requisite knowledge or do we verify experience?
Collapse of I-5 Bridge

Washington State
The collapse of the I-5 Bridge is a wakeup call
for the entire Nation. This is a really significant
event and we need to learn from it, not just in
Washington but around the country."
Chairman, Debbie Hersman, National Transportation Safety Board
Key Questions in Quality Management
Are cost and schedule pressures detracting from safety critical design
and/or design verification?
Is there an effective pathway to express your concerns?
Are safety critical maintenance activities being identified and conveyed to

others by the proper authorities?
Are inspections implemented in a timely manner?
Have all stakeholders worked to understand root causes associated with

any unexpected results or off-nominal behaviors in development, testing or
integration?
Are you assuming engineering accountability or are you delegating?
Challenges for Risk Management

in Megaprojects
Weak governance
Low bid contracts
Schedule driven projects
Subjectivity in risk analysis/optimism bias
Lack of knowledge and technical competence
Strategic misrepresentations
Wrong perceptions
Immature risk culture

More challenges
Sub-Optimal risk mitigation
Indecision and ambiguous procedures
Incomplete root cause analysis
Inadequate change control and contingency management
Absence of conflict management
Weak stakeholder management
Failure to focus on long term critical safety
Risk Reduction Recommendations
Establish the highest level of commitment and create a strong risk

management culture!
Develop a zero accident strategy and empower safety managers and teams!
Integrate risk across projects and share best practices!
Incentivize risk management from the bottom up!
Watch out for secondary risks!
What have we learned?
Competency in decision making requires:
adequate assessment of risk, uncertainty and complexity
Sensitivity to context
More lessons..
Megaprojects require Open Systems due to their complex, interrelationships

with the communities and the citizens it serves.
Projects should focus on Sustainability and not just the iron triangle!
Sustainability is multidimensional and extends to economic, social, institutional

and environmental benefits!
Thank You!
Questions???
Virginia A. Greiman
Professor of Megaprojects and Planning
Boston University
617-353-6860
ggreiman@bu.edu

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Lessons on Risk Management

from the Big Dig and other

Copyright 2013 by Virginia A. Greiman

EuroTunnel | Manages the Channel Tunnel between Britain and

Founded in 1986 the Tunnel was Completed in 1994. The

California $68 Billion High Speed Rail

California high-speed rail will connect the mega-regions of the

5 of 26 miles of tunnels now built

Canary Wharf Terminal

One of the five 10m tunneling machines

Bostons Big Dig

Landmark Cable-stay Bridge

Deep Soil Mixing

8 miles of Slurry Wall

Excavation and Parks

132 Construction Packages

Copyright 2013 by Virginia A. Greiman

Cost of Bostons Big Dig

EIS - Environmental Impact Statement

ICE - Interstate Cost Estimate

Copyright 2013 Megaproject Management by John A. Wiley, Hoboken, NJ

CSU Cost and Schedule Update

Copyright 2013 by Virginia A. Greiman

Bostons Big Dig

Copyright 2013 Megaproject Management by John A. Wiley, Hoboken, NJ

Copyright 2013 by Virginia A. Greiman

Bostons Big Dig

Copyright 2013 by Virginia A. Greiman

Copyright 2013 by Virginia A. Greiman

Megaprojects and Mega Risk

Copyright 2013 by Virginia A. Greiman

Risk Program Structure

Key takeaway - Structure Matters

Seven Cost Centers

Copyright 2013 by Virginia A. Greiman

Is your PPP a Partnership or a Risk?

State and Federal

Copyright 2013 Megaproject Management by John A. Wiley, Hoboken, NJ

Central Artery/Tunnel Project Risk Management Organization

Safety & Health

WC/GL Loss Control

Builders Risk Claims

Copyright 2013 Megaproject Management by John A. Wiley, Hoboken, NJ

CA/T Project Insurance Wrap-up

Administrative Costs and

Airport Contractors Liability

Copyright 2013 Megaproject Management by John A. Wiley, Hoboken, NJ

Copyright 2013 by Virginia A. Greiman

What is Project Success?

Being on Time and Budget?

Key takeaway - Know what success means on your project

Copyright 2013 by Virginia A. Greiman

Traditional Iron Triangle

Design, Risk, Safety and Quality Decisions

Emerging: Sustainability of economic

Open space, parks and islands

Re-knitting neighbourhoods and entry points

Expansion of shellfish population

Smart highway system

Economic opportunity/trained workforce/minority/women

Increased property values

Copyright 2013 by Virginia A. Greiman

The Importance of Context

Key takeaway Environmental factors, values, mega events and