Prabesh Acharya (17)

Reflection Assignment
Risk Management in three Nepali Projects
Projects consume time and resources so as to convert the input into output; in the meanwhile, the
processes involved can come across various uncertainties that has capacity to overrun both cost and
period of the project. So, it is very much vital to imagine and calculate all the risks involved in a project,
devise a plan to manage those risks according to their impact assessment and the frequency of their
occurrence. Only then, the project can complete within stipulated budget and time period. So, looking at
the three projects (Melamchi Water Supply project, Upper Tamakoshi Hydropower project and Madya
Pahadi Lok Marga) gave us the following learning regarding the inherent risks and its mitigation
strategies:
 As per the report, Melamchi water project had the least of the risk management among these three
projects. Problem with contractors, socio-political reasons, privatization, conflict with locals, lack
of materials, lack of monitoring and evaluation and vested interest along with earthquake are
cited as the major causes of overruns. However, there seems to be major lacking in proactiveness
so as to dig out the possibility of these scenarios beforehand; no wonder, this lack of alertness and
ignorance of various project management techniques led to the delays and cost overruns in the
project.
 Comparatively, Madhya Pahadi Lok marga had few provisions for the risk management that can
occur in the projects.
 The financial risk is covered through the risk transfer strategy of shifting the portion of the
financial risk to the insurance company so that the company has the risk coverage on the behalf of
the project.
 Non performance risk of contractors is mitigated through the provision of Liquidated Damage
Liability of 10% on contractors for unfair delays in projects.
 Ownership risk is mitigated through risk avoidance while cutting the forests and acquiring land.
 Similarly, in the case of Upper Tamakoshi Project, various risks like climate change, natural
disasters, share ownership disputes, technical issues, foreign exchange risk, inflation changes,
resource constraints are posed as the risk for the project. However, the report lacks substantial
risk management strategies that can specifically tackle these issues; instead, it contains the vague,
theoretical strategies that might not have worked for the Upper Tamakoshi Project.
On the thorough review of the risk management dimension of the given three projects, I could see the
bleak scenario of the national projects. The projects either lack the proactiveness to dig out the risk
factors or even in the delineation of the risk factors, there has been lack of active involvement of the
management to devise effective risk management strategies so as to mitigate underlying risk factors.
Madhya Pahadi Lok Marga is satisfactory in terms of its risk management, compared to two; however,
Melamchi water project and Upper Tamakoshi reports have poor risk management strategies.
 Risk Management of Hydropower Development in China
Similarly, Risk Management in hydropower development article has two objectives in mind. With the
quantitative questionnaire and survey results, it tries to find out the possible risks factors in hydropower
development in China from the perspective of clients, contractors, supervisors and designers; then, the
Three Gorges Project is taken as a case study to find out where there are risk mitigation strategies used for
these risk factors. There were following learnings from the article;
 Depending upon the perspective, whether the party is client, supervisor, designer or contractors,
there can be different perceived risk factors in the project. So, for the integrated approach and the
multi-dimensional view for the risk management strategies, a project manager must view the
project from different perspective with empathising the existing stakeholders’ viewpoints. With
the definition of the problem, can there be any solution; so, this analysis can bring solutions in the
form of risk management strategies for existing risk factors.
 Any project manager must consult the existing researches in the literature, and in case there are
no any researches available, they must conduct surveys and researches through scientific research
methodologies to dig out the risk factors.
 These researches can shed light to the weightage of the particular risk factors and this can be very
essential while devising strategies as the factors with high weightage and high occurrence
frequency needs high prioritization and this scientific approach can mitigate risk factors
significantly.
 Although, different stakeholders view project differently, there can be few consensuses as well;
safety, quality of work and environmental impacts are the major risk factors that hold true for
every stakeholder.
 Combined incentive-based scheme can be very much be helpful as this can bring collaborative
approach to the project completion where with mitigation of risk factors, the particular
stakeholder gets the incentive for mitigating those factors.
 For instance, there can be reward mechanism for timely and correct exchange of information
through project management systems; this brings the culture of communication between parties
and as a result, the risk factors can be searched and managed in real time without the unnecessary
delays for mitigation.
 Similarly, with the enhancement of the skill of workers, the project can complete with the
operational risks with much more quality and safety as this can contain the project within budget
and time.
 Any projects must consider interactions between project delivery, environmental and social
processes, so that there can be sustainable and responsible impact assessment on the local
ecology, culture and social climate.
 With these mitigation strategies, Three Gorges Project completed within time, with 15% less
budgeted cost; so, we can use these models to the Nepali projects so that projects have no cost
overruns and delay issues.
 OSRN Webinar 9
This is a webinar series conducted by Operational Research Society of Nepal which is research and
development-based society focusing on the sustainable development approaches with its overarching
fields like business, management, industry, engineering and service sector for optimizing the available
resources. Here, in this series OSRN invites Dr. Bijay Kumar Singh, a forester by profession who
specializes on the watershed management techniques, strategies and its application for sustainable
development; With his expertise on downstream/upstream linkage technique, he has been an
indispensable asset as a executive board member for President Chure Terai Madesh Conservation area
program and has numerous experiences working as consultants for various projects and organizations like
UNDP,FAO,DFID, JAICA and so on. Based on the webinar, here are some of my learning and relfection:
 Watershed is an area of land that drains or sheds water into a specific waterbody; it drains rainfall
and snowmelts into rivers and streams.
 Four categories of watersheds in Nepal – Basin (Koshi, Karnali, Gandaki and Mahakali); Sub-
Basin (7 main rivers in Koshi, 9 Main rivers in Narayani); Sub-Watershed (8 in Kulekhani);
Micro watershed (about 500 hectares).
 Gives example of Phewa Watershed; increment in built up area and forest from 1995-2010; some
of the key issues in Phewa watershed are high siltation and encroachments that questions the long
run existence of Phewa lake, high eutrophication that degrades the water development,
insufficient infrastructure for tourism development and poor governance on the part of local
government to conserve, preserve and protect the Phewa lake.
 Landslides in upstream and downstream of Phewa lake watershed area due to unmanaged and
unsustainable road construction projects in the name of development; this unmanaged soil gets
drained through river streams to Phewa lake, thus fostering the siltation; similar with the case of
house construction. Major sources of siltation of Phewa Lake are from Harpan Khola, Andheri
Khola and Phirke Khola.
 Similarly, no drainage system around Phewa lake, chemical fertilizers use in agriculture and rich
soil of landslides is creating eutrophication.
 Check dams, trap dams in both upstream and downstream can check and control the siltation
through landslide control; construction of large number of conservation ponds to hold rainwater
in upstream to immediately reduce flooding during rainfall which also collects silts; promotion of
planation of perennial crops.
 After Phewa Watershed, Dr. Singh presents the case of mismanagement of watershed in mudflow
in Melamchi watershed; Melamchi and Indravati river creates Melamchi watershed which also
contains the Melamchi water project; Melamchi and Helambu landslide might have created
Melamchi disaster and which might be consequence of 2072 earthquake induced geological
failure.
 However, the case still remains mysterious and there needs to be detailed research and review of
whole Sindupalchowk district in terms of geology, rivers and their watersheds so that integrated
watershed management plan and its implementation based on upstream-downstream linkage can
prevent such disasters in future.
 Then he moves on to watersheds of seasonal rivers originated from Chure region where he talks
about the thousand heaters of land’s flood due to chure mismanagement.
  Some of the causes are deforestation, unstainable urbanization around Madan Bhandari Highway
in Chure region which have longer horizon effects like lack of water supply in Terai region and
massive siltation, rampant exploitation and excavation of silts from Chure based water sources,
wildfire causing heavy carbon emission with destruction of plantation and animals creating
further landslide;
 If chure area is not conserved properly, there can be massive disasters like flooding of Terai-
Madesh during rainy season, lack of clean drinking water and desertification of land during dry
seasons.
 Bioengineering through check dam construction in upstream, midstream and downstream check
dam construction controls torrent.
 Development without any proper planning and sustainable perspective towards the developmental
projects with proper environmental impact analysis is catalyzing the Chure disaster.
 Government has formulated the policy of mining Chure for siltation collection through its fiscal
policy for trade balance management and this can hamper the overall chure ecosystem, thus we
need to cooperate and pressurize the government to backtrack its provision through coordination
and collaboration between experts, technocrats and local representatives on local governmental
bodies.
Connecting this with project management issue, watershed management strategies can be a risk
management technique for hydroelectric and water supply projects as shown by the mudflow disaster in
Melamchi; Similarly, watershed ecosystem destruction is one perspective that needs to be taken care of if
any developmental projects are to be carried out in sustainable manner in longer time horizon. This
emphasizes on the need for the micro environmental impact assessment with transparent research as
mismanagement of the watershed management can have wider impacts to the local communities in the
project affected areas. Without proper attention to the project deliverables and its impact on ecological
issues, the project itself can be the victim in the firsthand, but it will also have larger implication to the
primary aim of development, that such projects aim towards. Therefore, this webinar was an eye opener
for a project management scholar like us as it enlightened us towards the integrative approach towards the
conservation of watershed and its application for larger projects like water supply, hydropower and road
construction projects; this also paved a path towards the comprehensive of need for wider view analysis
of projects and its implications for local communities and ecologies.