Risk Management of Air Freight Area for the Manston

Airport Reopening

Yudha A. Hendriadi 2053557

School of Civil Engineering, University of Birmingham

Msc. Advanced Engineering Management (Operations Management Pathway)

Engineering Production and Risk Management

Date Completed: 26/04/2020

 TABLE OF CONTENTS

Page
1. INTRODUCTION ................................................................................................ 2

2. RISK MANAGEMENT REQUIRMENT FOR THE PROJECT ...................... 2

3. RISK INFORMATION AND DATA COLLECTION ........................................ 3

3.1.Risk Information............................................................................................... 3
3.2.Data Collection ................................................................................................. 3

4. HAZARD IDENTIFICATION ............................................................................ 3

5. RISK ANALYSIS ................................................................................................. 5

5.1.Risk Assessment Method .................................................................................. 5
5.2.Classification Scheme for Risks ........................................................................ 5

6. OUTPUT ANALYSIS AND DISCUSSION......................................................... 8

6.1.Pre-management Risk Matrix............................................................................ 8
6.2. Risk Response ................................................................................................. 9

7. RECOMMENDATION FOR IMPROVEMENT.............................................. 11

8. FUTURE WORK ............................................................................................... 12

9. CONCLUSION ................................................................................................... 12

10. REFERENCES LIST ......................................................................................... 14

11. APPENDICES .................................................................................................... 16

Appendix A – Project Timeline and Phases .......................................................... 16
Appendix B – Project Masterplan ......................................................................... 17
 LIST OF TABLES

Page
1. Table 1. Hazard identification................................................................................. 4

2. Table 2. Classification metrics ................................................................................ 6

3. Table 3. Risk classification ..................................................................................... 6

4. Table 4. Risk response plan .................................................................................. 10

 LIST OF FIGURES

Page
1. Figure 1. Typical location of the hazard areas ......................................................... 5

2. Figure 2. Pre-management risk matrix .................................................................... 9

3. Figure 3. Post management risk matrix ................................................................. 11

 ABSTRACT

In this report the risk management of air freight area as part of Manston Airport reopening
is presented with qualitative risk analysis methods. In general, there are five types of risks
associated with this project, namely health and safety, environmental, technical, commercial,
and political. Based on the classification various kind of hazards are identified. Then, risk
assessment is carried out by classifying each hazard based on the likelihood of occurring and
how much impact it has, so that risk value can be obtained. The result of the risk matrix
analysis shows that there are risks that fall within the unacceptable area, where those risks
are the top priority for mitigation plan. While most risks fall under the review and acceptable
category, it should be noted that prevention must be prepared, with respect to capabilities
and resource availability of this project. All mitigated risks must still be monitored to prevent
the worst. Changes that occur must be communicated to stakeholders to establish a risk
management culture.
1. INTRODUCTION

Organizations of all types and sizes are faced with internal and external factors and pressures
which make it uncertain if and when they will achieve their goals (ISO, 2009). Those factors
should be managed before a company starts a project. Risk management aims to control the
outcome of possible risks by identifying the hazards that brought them, then create a strategy
in order to mitigate the consequences. Every project has their own type of risks where it is
difficult as well as time consuming to asses risk in terms of likelihood and impact (Murray,
Grantham and Damle, 2011). However, risk management is a must for every project in order
to meet the objectives in regards to time, cost, and quality.

It is very important to assess and manage all possible risks before a project becomes
operational because a company can save money and secure their futures by adopting a risk
management strategy and understanding the many possible threats or incidents before they
arise. A comprehensive risk management programme would help an organisation set up
plans to prevent future risks, mitigate their effect should they arise and cope with the
outcomes.

2. RISK MANAGEMENT REQUIREMENTS FOR THE PROJECT

Manston airport is an air transportation asset of UK which currently is not being used.
Located in Thanet District, South East, this airport has the potential to support the air freight
business in the UK which is currently being overly saturated on Heathrow Airport in London.
Right now, it can be estimated around 2 billion is lost each year due to the limited capacity
of the London airport system that cannot accommodate all incoming traffic (RSP, 2017).
RiverOak Strategic Partners plans to reopen Manston airport as an international air freight
hub. Manston airport will be revitalized in a big scale, where primary facilities such as the
new terminal and cargo facilities will be built, as well as supporting facilities such as the
memorial museum and drainage infrastructure. The airport is expected to start its operation
in 2021 for both air freight and passenger services. This project will be carried out in four
stages, where air freight area is the first one to start. After that, the construction will focus
on the expansion of its airfield infrastructure (more information can be found in appendix).

2
The scope of this report is focused on assessing all risks at the airport’s air freight area. It is
one of the sub-projects from Manston airport that include new cargo facilities, aircraft stands,
landside access and parking area, and all supporting buildings that surround the area.

3. RISK INFORMATION AND DATA COLLECTION

3.1 Risk Information

Identifying causes of risk will prevent future problem which produce an effective risk
management practice (PMI, 2017). There are five main areas of risk that needs to be
considered for this project, which are health and safety, environmental, technical,
commercial, and political. Health and safety risk is related to worker’s wellbeing during
project lifecycles. Environmental risk is mainly about the project’s impact on surrounding
environment. Technical risk is associated with technology and quality issues that could
prevent the project to meet technical requirements. All problems related into financial
stability are considered in identifying commercial risk. Lastly, political risk is associated
with problem related with gaining construction approval with external parties such as
government and aviation association.

3.2 Data Collection

Data used in this report are gathered from official documents provided by the project owner’s
website. External sources are also taken into consideration to provide further evidence, such
as documents related to international standard from ISO and CAA. In addition, some
academic literatures are used as well to provide clearance on this project.

4. HAZARD IDENTIFICATION

Brainstorming method is a highly effective method for recognising all potential project risk
along with many of the unlikely ones (Flouris and Lock, 2009). Hazards are categorised
based upon its type and project lifecycles, as well as whether they are considered as threat
or opportunity. All potential hazards are represented in Table 2 along with their description.
In addition, pictorial representation of typical areas where the specified hazards may occur
also given in Figure 1.

3
 Table 1. Hazard identification.
No Hazards Type* Threat/ Description
(Stage**) Opportunity
1 Landscaping activities may cause
Ecosystem E
Threat disturbance on existing ecosystem in the
Disturbance (C/D/B)
area.
2 Waste material, air pollution from
E material transportation activities, and
Site Pollution Threat
(B/O) noise pollution caused by construction
and operation.
3 Insufficient exclusion zone, flying
Demolition HS
Threat projectiles, and explosion hazard poses
Accidents (B)
a threat to workers.
4 Some areas need to be site levelled,
Excavation HS
Threat where accidents might happen without
Accidents (B)
proper control measures.
5 Cargo Illegal activities and security breach are
facilities C going to be costly and danger
Threat
Security (O) company’s reputation.
breach
6 On-ground One aircraft collides with another or
HS
Aircraft Threat nearby building will cost a lot and may
(O)
Collision cause fatalities.
7 Failure in forecasting demand have a
negative impact on revenue.
Overcapacity Threat
C
in cargo &
(O) A level of facility vacancy may reduce
facilities Opportunity
rental rate and more flexibility in
controlling demands.
8 Issues related with Development
Government P
Threat Consent Order decision and local
disapproval (C)
district council to start the project.
9 The project may cause disturbance to
Issues with Threat
P nearby community and local business.
nearby &
(C/D/B/O)
communities Opportunity
Provide jobs to local area.
10 Airport Project cannot be started without
P
Procedures Threat approval from Civil Aviation Authority
(C)
Disapproval in regards to airport procedures.
*Type: Health and Safety (HS), Environmental (E), Technical (T), Commercial (C), and Political (P).
**Stage: Conceptual (C), Design (D), Build (B), and Operation (O).

4
 Figure 1. Typical location of the hazard areas.

5. RISK ANALYSIS

5.1. Risk Assessment Method

Risk analysis provides feedback for risk evaluation, as well as to provide insight on how to
handle risk with the most suitable approaches and procedures for risk treatment (ISO, 2009).
The chosen mechanism for risk assessment in this project is risk matrix. It is a very useful
tool for risk assessment because of its ability to prioritise risks based on their likelihood of
occurrence and severity, which can help decision-makers in deciding which risks and
opportunities need to be emphasised.

5.2. Classification Scheme for Risks

Classification scheme is the first step of risk analysis and made for identified hazards, which
are consisted of probability and consequence. The metric of both probabilities and
consequences used in this report are inspired by CAP 795 Safety Management System from
Civil Aviation Authority, which can be seen in Table 3 (CAA, 2014).

The justification behind the percentage of each probabilities came from both personal view
on the matter and previous experience from another cases. For severity, there are three main
factors that would most likely affect the outcome of the project; Cost, time delay, and
casualty. Cost are related to financial stability of the project. Considering time delay is
5
necessary because as one of the main sub-projects in Manston Airport megaproject, the air
freight area needs to be completed in under 2 years in order to fit the scheduled timeframe
(RSP, 2018). Casualty needs to be taken in consideration because a project of this scale must
have involved a large number of workers, especially in construction related work area. The
result of risks classification with their corresponding values are presented in Table 4.

Table 2. Classification metrics

Value Likelihood of Occurrence Severity
(%chance of happening/year) (Cost in million £, time delay, casualty)
Frequent (>50%) Catastrophic:
Costing more than 30% of project cost.
5
>12 months of delay. Multiple fatalities
and destruction of facilities/equipment.
Occasional (20-49%) Hazardous:
Costing around 20-29% of project cost. 6
4 to 12 months of delay. Death to number of
people or serious injury. Damage to
equipment.
Remote (6%-19%) Major:
3 Costing around 10-19% of project cost. 3
to 6 months of delay. Injury to persons.
Improbable (0.6-5%) Minor:
2 Costing around 2-9% of project cost 1 to
3 months of delay. Minor Incidents.
Extremely improbable (<0.5%) Negligible:
1 Costing less than 2% of project cost. Little
consequence.

Table 3. Risk classification.

Risk Items Consequence C Likelihood L Risk
No. Description Description Value
(C x L)
Cause damage to Likely, because there are
existing habitat where six nationally designated
Ecosystem there is a possibility conservation sites which
1 2 4 8
Disturbance of legally protected surrounds the project site
species in the area in 10 km radius
(RSP,2017). (RSP,2017).
Dust affecting air Most Likely would happen
2 Site Pollution quality and noise from 2 especially with a project 4 8
material transport. with this calibre.
There are 11 different
existing site buildings with
Fatality caused by
Demolition different layout, with
3 improper demolition 5 3 15
Accidents many factors that need to
planning (HSE, 2002)
be considered (RSP,
2018).

6
 Collapsing trench in
Many construction
groundwork activities
Excavation activities such as site
4 may cause injury or 4 3 12
Accidents levelling and building new
death of workers
drainages need to be done.
(HSE, 2019)
Loss or damage to
goods need to be
compensated which
Very unlikely to happen
will cost the company
Cargo because of the
and lower company’s
facilities comprehensive regulation
5 credibility. Illegal 3 1 3
Security related to air cargo security
goods that contains
breach in international level
hazardous or
(CAA, 2019).
explosive substances
will endanger air
freight carriers.
With proper procedure it is
unlikely to happen,
especially in apron area
On-ground Destroyed facilities
but still needs to be taken
6 Aircraft and aircraft, multiple 5 2 10
into consideration because
Collision fatalities.
similar accidents already
happened before (BAAA,
2016).
Loss in revenue
because of
insufficient demand
cannot cover Several air freight
operating cost. forecasts have been made
Overcapacity although unprecedented
7 in cargo Opportunity: 3 events may cause change 4 12
facilities Airport will have in demand.
flexibility in
controlling rental
rates based on
demand (ACI-
NA,2013).
Fail to obtain DCO is already on
permission for decision phase but may
Government
8 development would 5 need time extension for 3 15
disapproval
delay progress of the responses due to COVID-
project. 19 pandemic (NIP,2020).
9 Limited accessibility Project site is surrounded
due to disruption of by vast majority of local
Issues with the local road network communities. Thanet
nearby caused by 2 district has high 4 8
communities construction activities unemployment rate if
compared to national level
Opportunity: (RSP,2017).

7
 Provide jobs and
training opportunities
to local area
(RSP, 2017)

10 Manston airport need to

Fail to secure pass five stages of
approval from Civil Airspace Change
Airport
Aviation Authority regulatory process which
Procedures 5 2 5
(CAA) would delay can take 110 weeks (CAA,
Disapproval
progress of the 2020). Even a slight
project. revision to pass each stage
would cause delay.

6. OUTPUT ANALYSIS AND DISCUSSION

6.1. Pre-Management Risk Matrix

All Analysed risks with their respective risk number from Table 4 are presented as a risk
matrix in Figure 2. It is important to note that risks placement is based on their calculated
risk value from Table 4. There are three different areas in risk matrix based on their tolerance
level; which are unacceptable, review, and acceptable. All risks that falls within
unacceptable area needs to be prioritised first for mitigation plan because of their intolerable
magnitude of the outcome which can severely damage the project (CAA, 2014). All risks in
review area are still concerning in terms of effect and probability, but not as much as
unacceptable risks thus should be prioritised second. Lastly, acceptable risks are whether
very unlikely or have minimal damage. However, if the company still has the resources after
managing the other risks then they can proceed to reduce the remaining risks as low as
realistically possible.

8
 Figure 2. Pre-management Risk Matrix.

6.2. Risk Response

Choosing the most suitable risk treatment means weighting the cost and implementation
efforts against the benefit attained (ISO, 2009). In that case, risk response should be
realistically possible by looking into important aspects such as cost, time, and capabilities of
taking measures. There are potential benefits that might be exploited from identifying risk
but restrained by implementation difficulties (Cioaca, 2011). Realistically, some projects
might not have full capability to mitigate all possible risks due to limited resources.

Potts (2008) states that there are four basic strategies in formulating risk response, which are
avoidance, reduction, transfer, and retention. Based on that strategy, mitigation plan for risks
that falls within unacceptable category in Figure 2 are presented in Table 5. In addition,
several risks with very high likelihood or severity are also planned for mitigation, although
they are not categorised as unacceptable. All opportunities also need to be taken into
consideration in order to be realised or enhanced in terms of benefit. All mitigated risks and
opportunities with their respective new risk value are then represented in Figure 3.

9
 Table 4. Risk response plan.
Risk Item Response Mitigation/opportunity Options C L
Number
Provide training for workers in regard of
how to dismantle a building, strict
Demolition supervision in demolition activity, follow
3 Reduce 5 1
accidents construction regulation from government as
stated in The Construction (Design and
Management) Regulations 2015.
On-ground Make sure all pilots are in their prime
6 aircraft Reduce condition to prevent human error, maintain 5 1
collision quality of the air traffic controller.
Forecast the next wave of demand, match
cargo facilities design with other supporting
facilities such as truck parking area to fully
Overcapacity utilise cargo facilities.
7 in cargo Exploit 4 4
facilities Air cargo forecast has been taken into
consideration into designing cargo air
freight area (BOEING, 2017).

Provide what needs to be done by the

government in order to gain approval.
Search for support from councillors and
parliament members.
Government
8 Reduce 5 2
disapproval
Manston airport already provided
Construction Environment Management
Plan (CEMP) as requested by the
government (RSP, 2017).
Implement traffic management to
minimalize road disruption during
construction and operation. Promote local
business to increase tourism. Include local
Issues with business in supply chain activities.
9 nearby exploit 4 4
communities RiverOak Strategic Partners (RSP) has
made a £100,000 donation to AGE UK in
Thanet, to help them to set up and staff a
community hub (RSP, 2020).

Hold full public consultation events and

consult widely with local residents,
businesses, communities, the public and
Airport
other stakeholders to seek their views and
10 procedure Reduce 5 1
feedback.
disapproval
Manston Airport has passed stage 1 of CAA
Airspace Change CAP1616 (RSP, 2020).

10
 Figure 3. Post Management Risk Matrix.

7. RECOMMENDATION OF THE IMPROVEMENT

Assuming that mitigation has been successfully carried out, then the amount of risk that must
be faced in the project will be reduced, especially risks with high consequence and
probability of occurrence. however, there is still the possibility of such risk occurring even
though prevention has been attempted. Thus, an emergency response plan is needed for the
worst possibility. For risk related to construction activities such as demolition and
excavation, if an accident occurs, the time needed between the accident to obtain medical
support must be shortened, which can be done by preparing emergency procedures. It should
be noted that there are various construction activities that are running parallel in this project,
which can cause high traffic from the movement of building materials. In construction phase,
it is estimated that about 120 heavy vehicles movement will occur every day (RSP, 2017).
Therefore, route to the nearest medical support must be prepared in advance. It must be
assured that access to medical support must be vacated by notifying other sub-projects when
an accident occurs.

Based on result of risk management, decisions should be taken in regard on how to improve
the current framework and strategy (ISO, 2009). In order to achieve that, clear
communication must be established to all stakeholders. There might by additional hazard

11
and risk that have not been identified at the time operation, where safety investigation is an
option. It can be done by reviewing past documentation, as well as analysing operational
data (CAA, 2015). It is also important for all stakeholders to have deep understanding in the
project, which can be done by providing them training and safety induction.

8. FUTURE WORK

In this report, there are several limitations related to the method of analysis and data
collection. This project is still in the planning stage, so there is no exact data related to the
field conditions, especially in the construction phase. In addition, this project is part of the
Manston Airport reopening megaproject, where there are possible risks that occur in other
sub-projects that can affect the risks in this project or vice versa.

The use of qualitative risk analysis in this report is susceptible to subjective thinking. The
value of probability of occurrence and consequence cannot be formally confirmed.
Consequently, there is the possibility of misclassified risks in the risk matrix. Therefore,
further analysis is needed, especially with a quantitative approach to get optimal results.

9. CONCLUSION

By using qualitative methods, risks that can occur in the project can be analysed. All risks
can be found by identifying hazards using the brainstorming method. Overall, there are 11
hazards with different likelihood and consequences. All of which then classified using risk
matrix method. The results of using the risk matrix show that there are certain risks that need
to be prioritised in mitigation plan. In addition, an emergency plan must also be prepared in
advance to strengthen the results of the mitigation plan, especially for risks related to
construction activities. Changes that occur must be communicated to all stakeholders to
increase the success of risk management in this project.

The development of the air freight area in Manston Airport megaproject is crucial, where the
success of this sub-project determines when the airport will become operational. However,
risks that may occur in other sub-projects must also be considered because there are certain

12
project activities which are interrelated with each other, as well as risks that they brought in
the project.

13
REFERENCES LIST

1. NIP (National Infrastructure Planning) (2020) Manston Airport Development Consent

Order Available at: https://infrastructure.planninginspectorate.gov.uk/projects/south-
east/manston-airport/ (Accessed: 16 April 2020).
2. ACI-NA (Airports Council International – North America) (2013) Air Cargo Guide 2013.
Available at: https://airportscouncil.org/wp-content/uploads/2018/08/Air-Cargo-Guide.pdf
(Accessed: 21 April 2020).
3. BAAA (Bureau of Aircraft Accidents Archives) (2016) Accident Archives. Available at:
https://www.baaa-acro.com/search results?combine=ground%20collision&page=0
(Accessed: 25 April 2020).
4. CAA (Civil Aviation Authority) (2015) Safety Management System (SMS) CAP795.
Available at:
https://publicapps.caa.co.uk/docs/33/CAP795_SMS_guidance_to_organisations.pdf
(Accessed: 17 April 2020).
5. CAA (Civil Aviation Authority) (2019) UK-ACC3 Scheme Available at:
https://info.caa.co.uk/media/1039/190322-uk-acc3-website-guidance-document-final.pdf
(Accessed: 19 April 2020).
6. CAA (Civil Aviation Authority) (2020) Airspace Change CAP1616. Available at:
https://publicapps.caa.co.uk/docs/33/CAP1616_Airspace%20Change_Ed_3_Jan2020.pdf
(Accessed: 19 April 2020).
7. Flouris, TG, & Lock, D (2009) Managing Aviation Projects from Concept to Completion.
Farnham: Taylor & Francis Group.
8. HSE (Health and Safety Executive) (2002) Establishing Exclusion Zones When Using
Explosives in Demolition. Available at: https://www.hse.gov.uk/pubns/cis45.pdf
(Accessed: 22 April 2020).
9. HSE (Health and Safety Executive) (2019) Excavation: What You Need to Know as a Busy
Builder. Available at: https://www.hse.gov.uk/pubns/cis64.pdf (Accessed: 22 April 2020).
10. ISO (International Standard Organisation) (2009) Risk Management – Principles and
Guidelines ISO 31000:2009. Available at: http://ehss.moe.gov.ir/getattachment/56171e8f-
2942-4cc6-8957-359f14963d7b/ISO-31000 (Accessed: 15 April 2020).
11. Lester, A. (2013). Project management, Planning and Control: Managing Engineering,
Construction and Manufacturing Projects to PMI, APM and BSI Standards. 7th edn.
Oxford: Butterworth-Heinemann.
12. PMI (Project Management Institute, Inc.) (2017) Guide to the Project Management Body of
Knowledge (PMBOK® Guide). 6th edn. Newton Square, PA: Project Management Institute.

14
13. Potts, K. (2008) Construction cost management, learning from Case Studies. Abingdon:
Taylor Francis.
14. RSP (RiverOak Strategic Partners) (2017) Overview Report. Available at:
https://rsp.co.uk/documents/rsp-documents/03-overview-report/ (Accessed: 16 April 2020).
15. RSP (RiverOak Strategic Partners) (2018) BOEING World Air Cargo Forecast 2016-17.
Available at: https://rsp.co.uk/documents/external-documents/boeing-world-air-cargo-
forecast-2016-17/ (Accessed: 24 April 2020).
16. RSP (RiverOak Strategic Partners) (2018) Manston Airport passes Stage 1 of CAA
Airspace Change CAP1616 Process. Available at: https://rsp.co.uk/documents/rsp-
documents/04-masterplan-2018/ (Accessed: 23 April 2020).
17. RSP (RiverOak Strategic Partners) (2018) Masterplan. Available at:
https://rsp.co.uk/documents/rsp-documents/04-masterplan-2018/ (Accessed: 16 April
2020).
18. RSP (RiverOak Strategic Partners) (2018) PEIR Volume I 2018. Available at:
https://rsp.co.uk/documents/rsp-documents/02-peir-volume-i-2018/ (Accessed: 16 April
2020).
19. RSP (RiverOak Strategic Partners) (2018) PEIR Volume II 2018. Available at:
https://rsp.co.uk/documents/rsp-documents/02-peir-volume-ii-2018/ (Accessed: 16 April
2020).

20. RSP (RiverOak Strategic Partners) (2018) RSP donates £100,000 help AGE UK set up a
community hub in Thanet. Available at: https://rsp.co.uk/news/rsp-donates-100000-help-
age-uk-set-up-a-community-hub-in-thanet (Accessed: 26 April 2020).
21. The construction (Design and Management) Regulations 2015 (SI 2015/51). Available at:
http://www.legislation.gov.uk/uksi/2015/51/pdfs/uksi_20150051_en.pdf (Accessed: 25
April 2020).

15
APPENDIX A – Project Timeline and Phases

16
APPENDIX B – Project Masterplan

1. Project Current Layout

2. Project Proposed Layout

17