Attachment 0

Ref.
Ares(2017)5354156 - 03/11/2017
Risk based approaches for Asset inteGrity

multimodal Transport Infrastructure
ManagEment
D1.3. Overview of the existing framework in the risk

analysis in transport infrastructure projects
Version number: 2.0
Dissemination Level: PU
Lead Partner: AON
Due date: 31/10/2017
Type of deliverable: R
STATUS: Delivered
Copyright © 2017 RAGTIME Project
Published in the framework of:
RAGTIME - Risk based approaches for Asset inteGrity multimodal Transport

Infrastructure ManagEment
This project has received funding from the European Union’s Horizon 2020
research and innovation programme under grant agreement No 690660
D1.3. Overview of the existing
framework in the risk analysis in transport infrastructure projects
Authors:
Romina Colciago, Claudia Pani, Andrea Zuanetti, Alberto Grimaldi– AON
Maria Antonia Pérez Hernando, Saul Torres Ortega- UC
Marcello Cademartori, Rossella Siano, Paolo Basso– DAPP
Montesclaros Gutierrez Gonzalez, Eneko Menchaca Ibarra, Antonio Herrera

Chapero- LB
Mathieu Salel, Antoine MONNET- LGI
Revision and history chart:
VERSION DATE EDITORS COMMENT
0.1 26/05/2017 Claudia Pani, Romina ToC

Colciago
0.2 15/06/2017 Claudia Pani, Romina 1st version
Colciago
0.3 27/06/2017 Claudia Pani, Romina 2nd version
Colciago, Andrea
Zuanetti, Paolo Basso,
Saul Torres Ortega
1.0 30/06/2017 Zalbide Saenz De Review and formatting issues
Buruaga María
2.0 31/10/2017 Paolo Basso, Claudia Final version after PO
Pani, Andrea Zuanetti, comments
Romina Colciago
Disclaimer:
This document reflects only the author’s views and the Commission is not
responsible for any use that may be made of the information contained therein
2
Table of content
1 Executive summary ................................................................................. 9

2 Introduction ......................................................................................... 11
2.1 Common definition of relevant project phases ..................................... 11
2.2 General objective and report structure ............................................... 12
3 Risk Management Framework ................................................................. 12
4 Best Practices in Risk Analysis of transport infrastructure projects ............... 15
4.1 Review of existing guidelines ............................................................ 15
4.1.1 “Risk analysis and management for projects” (RAMP) ........................ 15
4.1.2 “Infrastructure procurement route map” .......................................... 17
4.1.3 “Improving infrastructure delivery: Project initiation route map” ......... 18
4.1.4 “Managing risk and uncertainty in infrastructure projects” .................. 19
4.1.5 “Project Risk Management Guide - Guidance for WSDOT Projects” ...... 20
4.1.6 World Road Association (PIARC) risk management guidelines ............. 21
4.1.7 “PMBOK® Guide and Standards”..................................................... 22
4.2 Risk management case studies in transport infrastructure projects ........ 23
4.2.1 The Millau Viaduct (PIARC, 2010) .................................................... 24
4.2.2 The Stockholm South Link (PIARC, 2010) ........................................ 25
4.2.3 A risk-management approach to a successful infrastructure project.
McKinsey Working Papers on Risk. (Beckers et al., 2013) ........................... 25
4.3 Identification and definition of best practices and tools ........................ 28
4.3.1 Common and proper definition of risk .............................................. 28
4.3.2 Complexity assessment ................................................................. 29
4.3.3 Capabilities assessment ................................................................. 30
4.3.4 Define and create a complete project management tool ..................... 30
4.3.5 Ensure a proper communication and information system.................... 31
4.3.6 Assess cost and risk estimates side-by-side...................................... 32
4.3.7 Present risk exposure as a range, to promote more informed decisions
and communications .............................................................................. 32
4.3.8 Review main risk sources ............................................................... 32
4.3.9 Ensure proper risk mitigation.......................................................... 33
4.3.10 Use of reference-class forecasting and risk analysis ......................... 33
3
4.3.11 Employ well informed and rapid contingency processes .................... 33
4.4 Conclusions .................................................................................... 34
5 Regulation & Standards in Risk Analysis of Transport Infrastructure Projects 35
5.1 General framework at European level ................................................ 35
5.1.1 Rail ............................................................................................. 35
5.1.2 Road ........................................................................................... 37
5.1.3 Maritime ...................................................................................... 38
5.1.4 Air .............................................................................................. 39
5.1.5 Conclusion ................................................................................... 39
5.2 General framework at a National level ............................................... 40
5.2.1 France ......................................................................................... 40
5.2.2 Italy ............................................................................................ 44
5.2.3 Spain .......................................................................................... 47
5.3 Regulations & Standards in the main field of construction industry with
reference to the insurance market ............................................................. 51
6 Major studies and projects in risk assessment of transport infrastructure
projects .................................................................................................... 53
6.1 Research Projects ............................................................................ 54
6.1.1 SiNER-G: Systemic seismic vulnerability and risk analysis of buildings,
lifelines and infrastructures .................................................................... 54
6.1.2 HAZUS: FEMA's Methodology for Estimating Potential Losses from
DISASTERS .......................................................................................... 56
6.1.3 STRIT: Methods and Technologies for Managing the Risk of the
Transportation Infrastructures ................................................................ 58
6.1.4 RESIS: RESEARCH AND DEVELOPMENT IN THE FIELD OFEARTHQUAKE
ENGINEERIGN and ENGINEERIG SEISMOLOGY.......................................... 59
6.1.5 PEC: Post-Emergency, multi-hazard health risk assessment in Chemical
disasters .............................................................................................. 61
6.2 Construction and design projects....................................................... 64
6.2.1 A4 HIGHWAY: UPGRADE TO THE THIRD LANE BETWEEN SENIGALLIA
AND ANCONA ....................................................................................... 64
6.2.2 PISA AIRPORT: LIGHT PUBLIC TRANSPORT SYSTEM “people mover” ... 66
6.2.3 TEMPA ROSSA: OIL TANK AREA STABILITY ...................................... 69
6.2.4 HIGHWAY “RONDA DE LA BAHÍA DE SANTANDER. SECTION: PARBAYÓN
– CACICEDO”........................................................................................ 71
4
6.2.5 RAILWAY LEÓN – ASTURIAS ........................................................... 74
6.2.6 HIGHWAY CANTABRIA – MESETA. N-611 PALENCIA - SANTANDER. P.K.
161 -149. SECTION: MOLLEDO – PESQUERA ............................................ 77
6.2.7 PENDUELES-LLANES HIGHWAY ROAD. ASTURIAS (SPAIN) ................. 80
6.2.8 “LA REGENTA” BRIDGE DESIGN PROJECT ........................................ 84
6.3 Conclusion ......................................................................................... 86
7 Assessment of financial and economic aspects related to risk ...................... 90
7.1 Introduction ...................................................................................... 90
7.2 Methodology ...................................................................................... 90
7.2.1 Context analysis and project objectives ........................................... 91
7.2.2 Project identification ...................................................................... 91
7.2.3 Feasibility and option analysis ........................................................ 92
7.2.4 Financial analysis (private point of view) .......................................... 93
7.2.5 Economic analysis (Social point of view) .......................................... 95
7.3 Financial Risks ................................................................................. 100
8 References ......................................................................................... 106
9 Annexes: National Regulation and Standards for construction industry from an
insurance point of view ............................................................................. 110
9.1 Annex 1: Belgium ............................................................................. 110
9.2 Annex 2: France ............................................................................... 113
9.3 Annex 3: Germany ........................................................................... 116
9.4 Annex 4: Italy.................................................................................. 118
9.5 Annex 5: Slovenia ............................................................................ 123
9.6 Annex 6: Spain ................................................................................ 124
9.7 Annex 7: Switzerland ........................................................................ 128
9.8 Annex 8: UK .................................................................................... 129
5
List of tables
Table 1. Main EU regulation and standards related to risk assessment field in the
railway sector ............................................................................................ 37
road sector ................................................................................................ 38
maritime sector .......................................................................................... 39
Table 4. Main insurance solutions provided by each country............................. 53
Table 5. Summary of the main risks faced ..................................................... 86
Table 6. Summary of the elements examined ................................................ 86
Table 7. Summary of the main risks faced ..................................................... 87
Table 8. Summary of the main elements examined ......................................... 88
Table 9. Reference periods .......................................................................... 94
Table 10. Financial analysis at a glance ......................................................... 94
Table 11. Benefit-Cost Ratio under budget constraints .................................... 99
List of figures
Figure 1. Main phases within the transport infrastructure life-cycle ................... 11

Figure 2. Flowchart of the overall RAMP process (ICE, 2015) ........................... 17
Figure 3. Methodology overview (HMT, 2013) ................................................ 18
Figure 4. Methodology main core (Infrastructure and Projects Authority, 2013) .. 19
Figure 5.Project Risk Management Planning (WSDT, 2014) .............................. 21
Figure 6. Risk management process (PIARC, 2010) ........................................ 22
Figure 7. Risk management overview (PMI, 2013) .......................................... 23
Figure 8. Uncertainties and complexities found along the project life cycle (Beckers
et al., 2013) .............................................................................................. 26
Figure 9. Day-to-day risk management improvement actions and tools (Beckers et
al., 2013) .................................................................................................. 27
Figure 10. Specific initiatives to improve risk culture (Beckers et al., 2013) ....... 28
Figure 11. Layout of SYNER-G Methodology & Software tools (from Syner-G
brochure) .................................................................................................. 55
Figure 12. Valguarnera viaduct used as demonstrator ..................................... 59
Figure 13. Fragility curves for horizontal vessels under seismic event ............... 61
Figure 14. Fragility curves for horizontal vessels under seismic event ............... 62
Figure 15. Upgrading of the Morignano Viaduct in the A14 Highway .................. 65
Figure 16. Seismic shear keys and pier jacketing for the Morignano viaduct ....... 65
Figure 17. Flooding area for the return period T=200 yrs (left) and map of the
interventions for the risk mitigation .............................................................. 67
Figure 18. R.c. viaduct for the new People Mover ........................................... 68
Figure 19. The steel footbridge for the new People Mover ................................ 68
6
Figure 20. Simulation of the slope stability (left) and proposed solution for the
mitigation of the landslides risk .................................................................... 70
Figure 21. Simulation of the hydraulic profile (left) and drainage basin (right) ... 70
Figure 22. Tunnels entry ............................................................................. 73
Figure 23. Wall in the right slope .................................................................. 74
Figure 24. Tunnel of Vega de Ciego .............................................................. 76
Figure 25. Tunnel of Pico de Siero and surroundings ....................................... 77
Figure 26. Longitudinal profile of the layout ................................................... 78
Figure 27. Montabliz bridge ......................................................................... 78
Figure 28. Montabliz bridge (2) .................................................................... 79
Figure 29. Archaeological site ...................................................................... 80
Figure 30. Orography of the site ................................................................... 81
Figure 31. Observed terrain ......................................................................... 82
Figure 32. Geological map ........................................................................... 83
Figure 33. Used sinkhole treatment .............................................................. 83
Figure 34. Upgrading of the bridge ............................................................... 85
Figure 35. Structure of financial analysis ....................................................... 93
7
Glossary
Acronym Full name

AAIM Advanced Asset Integrity Management
8
1 Executive summary
The Deliverable 1.3 “Overview of the existing framework in the risk analysis in
transport infrastructure projects” has been produced by AON, together with UC,
DAPP, LB, LGI, ZAG and TECNALIA within the Work Package 1: “Development of
AAIM framework”.
The main objective of the work is to define the existing framework in the risk
analysis in transport infrastructure projects by investigating best practices,
regulations & standards, main studies and researchers in this field.
Transport infrastructure projects are exposed to a high number of technical,

operational and governance risks which can affect the various stages of the
infrastructure life-cycle and which may have severe impacts. Moreover, the
problem approach is complex considering the number of heterogeneous
stakeholders involved.
This report has been structured in five main sections:
 Section 3: Introduction and context;

 Section 4: General risk assessment framework;
 Section 5: Best practices in the risk assessment of transport infrastructure
projects;
 Section 6: Main Regulations and Standards at a European level in the risk
assessment of transport infrastructure sector;
 Section 7: Main studies and projects, developed by collaborative partners
of, in the main field of risk assessment in transport infrastructure projects.
The main results which can be drawn from this study are summarized below.
Firstly, from the state of the art emerged the lack of a unified risk-based approach
to enable decision supports during the whole life-cycle of a transport infrastructure
project (from design to operation&maintenance) able to assist Infrastructure
Managers and Infrastructure Operators to have the adequate knowledge and
resources to react to potential risks that might arise.
Moreover, in this report a number of best practices to be followed in transport

infrastructure projects are detailed, based on the analysis of recognised guidelines
and of some real case studies analysed in the specific field. In particular, the
suggested best practices consist in the following main steps recommended when
approaching a transport project:
 Common and proper definition of risk;

 Complexity assessment;
 Capabilities assessment;
 Define and create a complete project management tool;
9
 Ensure a proper communication and information system;
 Assess cost and risk estimates side-by-side;
 Provide quantitative risk estimation to promote more informed decisions
and communications;
 Review main risk sources;
 Ensure proper risk mitigation;
 Use of reference-class forecasting and risk analysis;
 Employment of well informed and rapid contingency processes.
Although it is a recognized problem, to date there isn’t a clear framework of

specific legislative provisions which regulates risk assessment in transport
infrastructure projects at a European level. From the research work emerges that
legislation in this area is rather fragmented and most of the regulations and
standards related to the risks assessment in transport projects are partial and
sector specific. At a National level, each country has its own internal legislation in
native language. In all the analysed countries emerged that the national
transpositions of the EU Directives are not exhaustive and no country seems to
have developed a fully complementary internal regulation, providing a perception
that the issue is fully disciplined.
Finally, a number of research and design/construction projects developed by

collaborative partners of the Task 1.4 have been analysed and summarised with
specific focus on the type of risks addressed, on the faced hurdles and on adopted
control and mitigation measures.
Moreover, this report highlights that the development of an economic and financial
analysis is nedeed to properly evaluate the economic convenience and financial
sustainability of large infrastructure projects. The methodological approach to the
Cost-Benefit Analysis (CBA) and the main financial risks which will be taken into
account within the RAGTIME risk assessment approach are provided.
Concluding, the state of the art performed in these months laid the foundation for
the next steps of the projects. In order to fill in the gap in the literature, one of
the main objective of RAGTIME is to implement a new risk-based approach on the
transport infrastructure field. The specific Risk Strategy approach will be able to
consider the “risk-related” aspects from planning and design, to the delivery,
deployment and management of a generic transport infrastructure. This strategy
will raise the awareness of the risks of the infrastructure by providing suitable
instruments for addressing and managing risks. Potential cost savings on the
operational losses through the implementation of a more effective analysis of the
risk processes and an identification of the best measures to mitigate risk will be
also studied through specific and dedicated solutions.
10
2 Introduction
Transport infrastructure projects are exposed to several risks which can occur
during the various stages of the infrastructure life-cycle from evaluation/planning,
to operation&maintenance. Such risks often manifest themselves in considerable
cost overruns (Miller and Szimba, 2013) increasing cost escalation in transport
infrastructure projects (Flyvbjerg et al., 2011). Moreover, considering the
participation of various stakeholders, risks associated with transport infrastructure
projects may have severe impacts on both public and private budgets.
The performed research study concerns all the transport modes, with particular
focus on road and railway sector, and all the stages of the transport infrastructure
life-cycle.
2.1 Common definition of relevant project phases
Figure 1 aims at providing a common definition and classification of relevant

project phases. Providing these definitions at this early stage is necessary to
maintain a consistent approach throughout the whole RAGTIME project.
Figure 1. Main phases within the transport infrastructure life-cycle
During risk identification phase it is relevant to determine in which phase every

risk can be originated and when it can affect the project. For this reason, the
project lifecycle has been split in five main phases:
 Evaluation/Planning, a necessary condition for a successful infrastructure

program is a planning strategy. This requires identifying which investment
should be carried out, determining the components, needs and
commitments, and how they should be prioritized.
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 Procurement/Decision, where needs of new/renewed infrastructures are
identified link with decision where objectives are fixed, based on process
and tools to take into account all variables and preferences from every
concerned part.
 Design/Project, where a technical solution is defined as well as procedures,
schedules, detailed costs and quality.
 Construction by using suitable systems according to the Project, capable to
overcome considered contingencies, with justified and agreed deviations
from the original concept.
 Operation & Maintenance, when the facility is put into service, this is the
longer part of the life-cycle. Monitoring and maintenance will be the most
important tasks at this time.
2.2 General objective and report structure
The main objective of the Deliverable 1.3 is to underline the state of the art in the
main field of risk assessment in transport infrastructure projects by investigating:
 Best practices;
 Regulations and Standards;
 Major studies and researches in the specific field.
The remainder of the document is structured as follows: Section 4 introduces a

general risk assessment framework; Section 5 identifies best practices on the
basis of reviewed guidelines and some real case studies; Section 6 investigates
legislative provisions relevant to risk assessment in transport sector. In this
section a specific in-depth analysis has been provided with reference to the
construction sector and supplementary country-to-country worksheet are provided
in order to point out the compulsory insurance solutions as measures for
mitigating risks in this field. Section 7 analyses a number of projects and research
studies in the specific sector and underlines, for each project the main risks faced,
the main elements examined and the adopted control and mitigation measures.
3 Risk Management Framework
Risk is an abstract concept, complicated to define and in some cases, almost

impossible to measure (Raftery, 2003). Risk can be defined as the contingency,
probability, proximity of a hazard or damage. From an economic perspective, risk
can be understood as the financial loss an investor must assess when investing in
a project. This loss must be shared between stakeholders, owners, governments,
constructors and, obviously, financial partners.
Risk is the possibility that events, their resulting impacts and dynamic interactions
may turn out differently than anticipated. (Miller & Lessard, 2001). With reference
to the transport infrastructure area, we considered that the most appropriate
definition for our purposes is the one suggested in 1979 by the British
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Construction Standards, which defines risk as “The combined effect of the
probability of occurrence of an undesired event and the magnitude of the event”.
In the RAGTIME project, risks have been divided into 3 clusters, that reflects the
different expertise of RAGTIME partners: Operational, Technical and Governance.
These risk will be mapped separately, but following the common definitions and
standards set out in this section.
The number of engaged stakeholders and agents, the complexity of the processes
involved, the high frequency of environmental or administrative issues are the
main reasons why infrastructure projects is to be considered a risky activity.
(Flanagan & Norman, 1993). Due to this high risk exposure, the analysis and
assessment of risks are critical factors when seeking the achievement of the
objectives of a large infrastructure project. While reading the following sections, it
should be kept in mind that the final aim of any Risk management activity,
consists in trying to minimize probability and impact of negative risks.
Risk management is a decision-making process which involves considerations of

political, social, economic and engineering factors with relevant risk assessments
relating to a potential hazard.
In the last decade, a number of risk management tools/methodologies have been

introduced and employed to manage and minimize the uncertainty and threats
realization to the organizations. However, the focuses of these methodologies are
different; for this reason, companies need to adopt various risk management
principles to visualize a full picture of the organizational risk level. For example,
Hierarchical Holographic Modeling (HHM) is one of the well-known approaches in
risk identification (Haimes et al., 1995) whereas Enterprise Risk Management
(ERM) is a systematic approach to managing risk (Meier, 2000).
Although a unique or prevalent approach and framework does not exists, all
existing project risk management methodologies includes the following main steps
(summarized from Miller, M. and Szimba, E., 2013; PMI PMBOK, 2013; WSDT,
2014):
 Risk Management Planning: It constitutes the preliminary activity required

to determine the methodology and the focus of the Risk Management
activities to be conducted. Just like every other project activity, Risk
Management should have budget and resources allocated consistently with
its scope of work. Level of details of the work to be conducted should
reflect project complexity and general risk exposure. This process should
be initiated as soon as the project is conceived and should be completed in
the early stages of project planning.
13
 Identification of Risks: In this phase, any risk that may affect the project
during the various stages of the life-cycle is identified and described. This
is an iterative process that should be conducted continuously during the
whole project life-cycle, as new risks may emerge or evolve as the project
progresses. The specific cause of each risk and the phases of the project
affected by each risk shall be identified. During this process triggers, which
are symptoms or warning signs that a hazard has occurred or is about to
occur, will also be identified.
 Qualitative & Quantitative Analysis of Risks.
The priority of identified risks is assessed by providing a qualitative
estimate of the relative probability of occurrence and the corresponding
impact on project objectives. From this data, various techniques can be
used to prioritize risks determining which are the most urgent to deal with.
Moreover, the quantitative analysis provides quantification of risk severity,
both in terms of likelihood and potential impact. This analysis provides
more accurate results than the Qualitative counterpart, but it also require
a greater effort to be conducted. For these reasons, quantitative analysis
is typically limited to most relevant risks, determined through a
preliminary Qualitative Analysis. In general, during the Planning phase it
should be defined whether to conduct Quantitative Analysis and if yes, to
which extent.
 Risk Response Planning: develops options and actions to improve
opportunities and reduce threats to project objectives. It includes the
identification of necessary actions to be performed to mitigate the risks.
These actions are assigned to a specific responsible (the "risk response
owner"). Responses to planned risks should be tailored to the importance
of the risk, profitable in relation to the target to be met, realistic within the
context of the project, agreed upon by all parties involved and should also
be timely. Typically, more the one response exists for every risks and a
choice among different options has to be made.
 Monitoring and Control of Risks: This activity, that should be carried out
throughout the whole infrastructure life-cicle, consists in monitoring of
identified risks, monitoring of residual risks, identifying new risks,
executing risk response plans and evaluating their effectiveness.
Responses to planned risks included in the project management plan are
executed during the project life cycle, but the whole project must be
continuously monitored for new risks, risks changes (including those
becoming obsolete). The monitoring and control makes use of techniques,
such as analysis of variation and trends, which require the use of
performance information gathered during project execution.
These are the main phases for a general Risk Management approach (ISO 31000).
It is useful to remember that several methodologies for conducting any of these
phases exists.
14
The scientific literature showed that in the transport infrastructure sector there is
not a standard Risk approach able to consider the “risk-related” aspects from
planning and design, to the operation&maintenance of a generic transport project.
The most of the studies and researches are sector specific and referred to single
stages of the transport infrastructure life-cycle. Several approaches have been
proposed from different authors in order to better manage risks during the single
stages of evaluation (e.g. Ye and Tiong 2000; Salling 2008; Salling and Banister
2009), appraisal (e.g. Miller 2013) construction (e.g. Ashley et al. 2006), and
operation&maintenace (e.g. Alfen et al. 2011).
Furthermore, the state of the art showed that differences among methodologies
may be relevant. The most variegated aspect regards the risk evaluation, where a
multitude of both Qualitative and Quantitative methodologies have been proposed
and co-exists, without any relevant prevalence of one over the others.
4 Best Practices in Risk Analysis of transport infrastructure projects
In this section a review of different existing guidelines is developed. These

guidelines have been developed mainly in the United Kingdom, a country in which
the study and development of risk assessment methodologies present a high
presence. Worldwide recognised guidelines like the PMBOK have been also
reviewed.
Furthermore, the section presents some real case studies. It has to be noticed
that, since competition in this sector is particularly hardened, companies are
discouraged to publish and share past experiences and lessons learnt.
Lastly, some best practices to be followed during a transport infrastructure

projects are identified and defined basing on the previous reviews on guidelines
and case studies, allowing to draw some general conclusions.
4.1 Review of existing guidelines
In this section, for illustrative purpose, we summarize the most widely adopted
methodologies and frameworks, even tough, as already mentioned in Section 4,
there is no clear predominance of one over the others.
4.1.1 “Risk analysis and management for projects” (RAMP)
RAMP (Risk Analysis and Management for Projects) is a working methodology

developed by the Institution of Civil Engineers (ICE) and the Institute and Faculty
of Actuaries. Its latest version (Third Edition) was published in June 2014.
RAMP serves as a framework for analyzing and managing the risks involved in
projects, both large and small. This methodology aims at ensuring the effective
identification of risks, its analysis and control. Among its intended purposes, the
15
most emphasized is that of allowing an early detection of risks in order to allow for
preventive mitigation and a prompt response if they occur.
RAMP focuses on the strategic and financial aspects of civil projects, resulting an
effective tools for planners, engineers, accountants, actuaries, lawyers, project
managers, public administrators and anyone else who concurr to a project's
success.
Some of the benefits associated to the implementation of RAMP include:
 Avoidance of wasted work, because of the iterative nature of the process;

 Consideration of opportunities as well as threats;
 Improvement of the credibility of the business case for the project;
 Consistency with approaches to Enterprise Risk Management (ERM) in the
project sponsor's organisation;
 Greater confidence for those who decide on whether projects should
proceed;
 Tracking of "lessons learned".
In this framework, risk is defined as the potential impact of all the threats (and
opportunities) which can affect the achievement of the objectives for an
investment. This concept of risk is associated to six concepts used for the
evaluation of risk:
 Overall risk: the combined effect of all individual risks or sources of

uncertainty in a situation.
 Risk event: a possible occurrence which could affect (positively or
negatively) the achievement of the objectives for the investment.
 Likelihood: the chance (or probability) of the risk event occurring within a
defined time period.
 Impact: the value of the effect of the risk event on one or more objectives
if it occurs.
 Expected value: a best estimate of the average outcome, i.e. all possible
outcomes weighted by their probabilities.
 Risk efficiency: a state achieved when the downside risks have been
sufficiently mitigated and the upside risks have been optimised.
The RAMP methodology (Figure 2) is divided into thirteen steps grouped into four
activities: process launch, risk review, risk management and process close-down.
16
Figure 2. Flowchart of the overall RAMP process (ICE, 2015)
4.1.2 “Infrastructure procurement route map”
UK Government, jointly with Infrastructure UK, the University of Leeds, the

Institution of Civil Engineers (ICE) and the Infrastructure Client Working Group,
developed this route map in 2013. This publication aims at improving the
capability of sponsors and clients to plan, execute and operate major
infrastructures.
The route map developed is not a prescriptive process. It describes some

questions to be asked and the correct time to ask them to effectively and timely
17
identify risks. Some of the benefits foreseen in the application of this route map
consists in: improving value, avoiding unnecessary costs, increasing the projects
potential in terms of revenue and developing a tailored best practice toolkit.
Figure 3. Methodology overview (HMT, 2013)
The main four components of the route map are:
 Complexity assessment of the organisation and the project or program

delivery environment and associated pipeline;
 Capability assessment of the procuring authority and project or program
delivery partner and the supporting supply chain;
 Delivery route/procurement option selection and implementation; and
 Innovation and best practice resources (building on existing guidance and
tools where appropriate).
The route map has been applied with success to some relevant projects such as
London’s Crossrail, the Environment Agency’s Thames estuary, High Speed 2
railway and London Underground’s station stabilisation program.
4.1.3 “Improving infrastructure delivery: Project initiation route map”
The Project Initiation Route map is a product of government working

collaboratively with industry and the University of Leeds, through the
Infrastructure Client Group. This route map aims at offering support on strategic
decision making during project initiation based on the latest thinking and
knowledge acquired from delivery of Major Projects applied in a series of
structured exercises. It enables sponsors and those responsible for project
18
delivery to properly align complexity with the necessary capabilities and other
enhancements to ensure a more successful outcome.
The route map is an aid to strategic decision-making. It supports the alignment of

the sponsor and client organizations’ capability to meet the degree of challenge
during initiation and delivery of a project.
The route map contains detailed checklists to use during the initial assessment
steps, advices on how to conduct the gap analysis, and advices about what to
include in plans for an enhanced project environment. It provides an objective and
systemic approach to project initiation founded on a set of assessment tools that
help determine:
 Complexity and context of the delivery environment;

 Capability of current and required sponsor, client, asset manager and
market;
 Key considerations to enhance capability where complexity-capability gaps
are identified.
Figure 4. Methodology main core (Infrastructure and Projects Authority, 2013)
4.1.4 “Managing risk and uncertainty in infrastructure projects”
This report arises from a research undertook by the Infrastructure Risk Group
(IRG) on behalf of Infrastructure UK, a unit within the UK Treasury. Major
infrastructure owner operators and the Institute of Risk Management also
participated on it.
19
The report was published on 2013, aiming at influencing, sharing and improving
leading practice on infrastructure projects, looking for a more economic and public
resources efficiency. The report is addressed to anyone who can exert influence on
sharing and improving leading practice on major infrastructure projects.
The report is divided into three sections: Part A, focusing on a preliminary review
and some recommendations; Part B, detailing guidance and improvement tools
and methods; and Part C, with supporting material.
The research looked at the risks associated with cost management and uncertainty
throughout the project life cycle. The report gives 9 key recommendations,
guidance for improvement and case studies.
 Cost and risk estimation:

1. Present risk exposure as a range, to promote more informed
decisions and communications (particularly at strategic-level)
2. Leading organisations to underpin early-stage risk allowances with
both reference-class forecasting, and risk analysis, rather than
Optimism Bias-based uplifts
3. Consider cost and risk estimates side-by-side, for completeness and
to combat double counting
 Active risk mitigation and management:
4. Incentivise risk mitigation to ensure risk actually gets managed in the
face of other behavioural influences (c.f. London 2012 Olympics
delivery programme and London Underground’s Ring-Fenced risk
model)
5. Adopt informed and rapid contingency draw-down processes (e.g. as
for the Olympics)
6. Different organisations to cooperate on risk and contingency
management of interfacing programmes, to enhance mitigation and
avoid duplicating contingencies
 Enabling and supporting activity:
7. Use a common vocabulary and develop a generic risk profile
8. Set up a UK-wide body to collect and share data
9. Establish a UK forum to share good practice
4.1.5 “Project Risk Management Guide - Guidance for WSDOT Projects”
The “Project Risk Management Guide - Guidance for WSDOT Projects” is a

document published by the Development Division of the Washington State
Department of Transportation (WSDOT).
This document offers guidance to managers, teams, and all other staff involved
with project risk management. It provides:
 Uniformity in project risk management activities.
20
 Techniques and tools for project risk management.
 Data requirements for risk analysis input and output.
 The project risk management role in overall project management.
 Guidance on how to proactively respond to risks.
The project risk management process is divided into six different steps, as shown
on Figure 5.
 Risk management planning: deciding how to approach, plan, and execute

risk management activities throughout the life of a project.
 Identify risk events: determining which risks might affect the project and
documenting their characteristics.
 Qualitative risk analysis: assessing the impact and likelihood of the
identified risks, and developing prioritized lists of these risks for further
analysis or direct mitigation.
 Quantitative risk analysis: estimating numerically the probability that a
project will meet its cost and time objectives.
 Risk response: developing options and determining actions to enhance
opportunities and reduce threats to the project’s objectives.
 Risk monitoring & control: tracking identified risks, monitors residual risks,
and identifies new risks—ensuring the execution of risk plans and
evaluating their effectiveness in reducing risk.
Figure 5.Project Risk Management Planning (WSDT, 2014)
4.1.6 World Road Association (PIARC) risk management guidelines
The World Road Association (PIARC) has published two documents that analyse
the management of risk in road projects. These publications are “Towards
Development of a Risk Management Approach” (2010) and “Managing Operational
Risks in Road Organization” (2012).
Both guidelines provide a review of different existing methodologies at national

level, state of art about risk management, a general risk framework applied to
21
road projects, examples of implementations and case studies, and finally some
recommendations.
The risk framework proposed by this organization is detailed in Figure 6 and it is

divided into seven steps:
 Define the context.

 Identify risks.
 Analyse risks.
 Evaluate risks.
 Treat risks.
 Monitor and review.
 Communicate and consult.
Figure 6. Risk management process (PIARC, 2010)
4.1.7 “PMBOK® Guide and Standards”
The “Project Management Body of Knowledge” is a set of standard terminology

and guidelines for project management developed by the Project Management
Institute (PMI). This knowledge have been in constant evolution over time, and in
2013 the fifth edition of the book “A Guide to the Project Management Body of
Knowledge” was presented.
The core of this book is dedicated to project management, project life cycle,
integration, control, quality, human resources or time and cost management.
There is also an entire chapter (#11) specifically focused on risk management.
22
Project Risk Management includes the processes of conducting risk management
planning, identification, analysis, response planning, and controlling risk on a
project. The objectives of project risk management are to increase the likelihood
and impact of positive events, and decrease the likelihood and impact of negative
events in the project.
Project Risk Management activities (Figure 7):
 Plan Risk Management: The process of defining how to conduct risk

management activities for a project.
 Identify Risks: The process of determining which risks may affect the
project and documenting their characteristics.
 Perform Qualitative Risk Analysis: The process of prioritizing risks for
further analysis or action by assessing and combining their probability of
occurrence and impact.
 Perform Quantitative Risk Analysis: The process of numerically analysing
the effect of identified risks on overall project objectives.
 Plan Risk Responses: The process of developing options and actions to
enhance opportunities and to reduce threats to project objectives.
 Control Risks: The process of implementing risk response plans, tracking
identified risks, monitoring residual risks, identifying new risks, and
evaluating risk process effectiveness throughout the project.
Figure 7. Risk management overview (PMI, 2013)
4.2 Risk management case studies in transport infrastructure projects
In this sub-section different summaries of real and successful risk management

case studies are presented. The availability of these case studies is very limited in
23
the literature, but some of the guidelines previously described includes some
examples. Additional details about each case study can be obtained in the
references provided.
4.2.1 The Millau Viaduct (PIARC, 2010)
The Millau Viaduct was built to create a new link between Paris and South of
France, and more generally Northern Europe and Spain. Its construction
ended on December 2004 after a very short construction period of 38 months.
This structure of exceptional dimensions is easily identifiable thanks to its
2460 meters total length and above all by its world record height (245 meters
for P2 pier).
Risks related to technical aspects, especially stability under strong wind

conditions and difficulties resulting from building a road infrastructure at such
a height, played a key role in the design choices of this exceptional mega-
project.
Indeed, after a certain number of preliminary studies made by the French

State technical services, it was finally decided to set a very unusual design
process consisting in an international architectural/engineering competition,
and to pass a 75 years concession contract with a private company for the
construction and operation of the new infrastructure. The chosen architectural
solution corresponds to the vote of a 20 persons committee made of the
French director of roads, technical experts, public finance specialists and local
and regional representatives. During the planning and construction phases a
great attention was paid to environmental aspects, and significant
communication campaigns enabled to explain project issues, design choices,
to describe mitigation measures and make road users and local inhabitants
accept this new infrastructure. The overall great Millau Viaduct mega-project
from preliminary studies to construction was deeply influenced by
considerations related to risk analysis. During the operation phase, most of
those risks, particularly foundation technical risks, bad-ageing risk and risks
related to users’ security, were subjected to specific control and monitoring:
deformation measurement, cable-stayed vibration control, corrosion control,
ice detectors installed in the pavement structure, anemometers, video
surveillance. Even more than the technical risks, financial risks and
social/political aspects seemed to be very critical for the completion of this
mega-project and was therefore kept under control.
24
4.2.2 The Stockholm South Link (PIARC, 2010)
Southern Link in Stockholm is another relevant case study for project risk
management. Based on this example, the interfaces of risk management with
the project sponsor, the project management, the product, and external
stakeholders will be illustrated.
A checklist for project risk management has been provided:
- Decide on a plan for the project’s risk management;

- For larger projects appoint a coordinator for risk management;
- Best qualified to deal with the risk should undertake it;
- Project’s top 10 ranking risks delivered to the next phase with suggestions
for measures;
- Requirements in the contract for the contractor’s own risk management;
- Perform risk analysis based on the 2 perspectives:
- Contractor phase;
- Road using phase;
- During construction always prioritize safety, working environment, and
environment along time-cost-function;
- Keep the analysis up to date.
4.2.3 A risk-management approach to a successful infrastructure project.

McKinsey Working Papers on Risk. (Beckers et al., 2013)
In 2011, a major transportation-asset operator and developer embraced a

life-cycle approach to manage its large project pipeline (Figure 8). Top
management committed to reduce its risk-related provisions by one-third;
better risk management was identified as a core driver of profit and loss,
value creation, and competitiveness.
At the outset, there was a lack of a single risk definition or risk taxonomy
across projects, project stages, and departments. In addition, there was no
systematic formulation of how risk management added value to the company,
for example, in deriving risk-management objectives from a corporate value
framework, or demonstrating how risk management could lead to better
decisions. The organization’s focus was on the mitigation of project-schedule
and cost overruns, but not on risk optimization.
25
Figure 8. Uncertainties and complexities found along the project life cycle (Beckers et
al., 2013)
Senior management decided to embrace a systematic step change to enhance

institutional risk-management capabilities, from daily employee practices and
behaviours to mind-sets and corporate culture. An integrated life-cycle
approach was put in place to address many of the problems outlined above.
Management needed to formulate a clear business case for the value of risk-
management activities and to devise a risk strategy that was tightly linked to
the business. The appropriate transparency on risk cost and the key drivers
and sources of risk then had to be established, along with a much clearer
understanding of what risk-management levers and instruments were
available. Having established this at the top of the organization, it was then
vital that effective risk-management governance, organization, and processes
were put in place and that a strong risk culture and awareness was driven
throughout the organization (Figure 8).
Reliable and transparent communication is vital to the success of any project,

so it was crucial that an improved system of communication was put in place
between top departmental teams involved in any infrastructure project. This
enabled cross-divisional cooperation and ensured alignment of goals and
processes. Proper interaction with, and performance tracking of, contractors
was established to help monitor and evaluate risk on a timely basis, and there
26
were clear directions from the top of the organization to operating levels that
cascaded risk-management awareness downward. This approach also required
on-site “shop floor” risk transparency to be further advanced, as well as a
move from ad hoc reactive risk mitigation to proactive risk anticipation.
Figure 9 shows how far reaching this effort was across the organization; it
involved people processes, management practices, governance, approval
processes, and day-to-day behavioural norms at every level.
Figure 9. Day-to-day risk management improvement actions and tools (Beckers et al.,
2013)
27
Figure 10. Specific initiatives to improve risk culture (Beckers et al., 2013)
Professional risk management can not only significantly improve results in

public procurement processes; it can also attract and mobilize additional
private financing. Given the scale and scope of emerging infrastructure
projects, there is a strong case for embracing risk management throughout
the life cycle of individual projects and also at the portfolio level.
4.3 Identification and definition of best practices and tools
Based on the review of the different guidelines presented on previous sections,

some best practices and tools have been identified. These practices are considered
as good approaches to transport infrastructure projects.
4.3.1 Common and proper definition of risk
From the review of different sources, a preliminary and relevant conclusion arises:
there is a lack of a unique and shared definition of risk. On multidisciplinary
working groups, it is quite common that all members have a different notion of
risk. Even the ISO regulations do not present a unique definition of risk, but more
than 40 different definitions can be found in the different publications (OxeBridge,
2014). This must be the first and main problem to solve when dealing with risk
management.
28
Therefore, prior to start analysing any project or reviewing stages or financial
issues, members of the technical staff must meet together and propose a
definition of risk. This definition can be adapted to the project specifications and to
what staff members mean for risk from their actual perspective.
A good starting point could be reviewing definitions of risk proposed by the

publications previously described.
 The effect of uncertainty on objectives (ISO 31000).

 The potential impact of all the threats (and opportunities) which can affect
the achievement of the objectives for an investment (ICE, 2015).
 The description of a specific event which may or may not occur, together
with its causes and consequences (IRM, 2013).
 Project risk is an uncertain event or condition that, if it occurs, has a
positive or negative effect on one or more project objectives such as
scope, schedule, cost, and quality (PMI, 2013).
The lack of unique and common definitions can extend beyond the risk concept. A
common vocabulary of technical terms should also be agreed across all
organisations. The lack of a common vocabulary hindered all aspects of the
research. It was very difficult to achieve clear and consistent communication
about risk and the way it should be dealt with a various stages of project
development.
4.3.2 Complexity assessment
Lack of understanding of the context in which a project is being created and

delivered is a significant contributory way to increase project risks. Understanding
the wider project environment is especially important where the proposed project
may in itself be more complex or on a larger scale than normal, or is being
delivered in a novel way.
This project assessment process involves carrying out an evaluation of the

organisation and project delivery environment and complexity. This takes into
account that people, organisational culture, goals and practices, together with
technology and procedures, are all part of an interconnected system in which
recognition of the combined effects is vital for success.
Following this, the sponsor and/or client should consider the complexity of the
delivery environment and the issues that will ultimately determine the success or
failure of the project or program.
The output from the delivery environment and project complexity assessment can
be a qualitative assessment of complexity that provides a greater understanding
of risks, their consequences and potential opportunities.
29
4.3.3 Capabilities assessment
Capability describes the ability of the sponsor, client, asset manager and market
to organise for effective and efficient delivery of a project. It refers to a part of the
business involved with the project and not the human factor, as most barriers to
effective practice are rooted in systemic issues and not individual action.
In addition to understanding the complexity of the delivery environment of a

project, it is important to understand the capability of the various parties involved,
in order to check alignment (or misalignment) with the capabilities needed to
deliver a project of the level of complexity being proposed. This includes taking a
broader view of the market capability that might be needed to address identified
capability gaps and the degree to which the respective views of capability are
consistent and aligned across the various parties.
It is important to assess sponsor own capability to support the delivery of the

project or programme and assess their level of Asset management capability.
An assessment of client and supply chain capability must also be conducted. This
is focused on a range of socio-technical evaluation criteria that categorises the
organisations into different risk levels.
The client should be capable of specifying the requirements to external

participants and managing the delivery outcomes by selecting the appropriate
private sector participants to deliver their needs. Fundamental for this purpose is
the ability to maximise value from the supply chain through the management of
relationships.
Based on the outcome of this capability assessment and their understanding of the
delivery environment, the client can develop an enhancement programme to
bridge any capability gaps.
Alignment of: the critical success factors; organisation and delivery complexity;
and the capability of the client and supply chain, enables key risks and
opportunities to be identified. This information can then be used to inform the
procurement strategy and address the key capability gaps that represent a risk to
successful delivery.
4.3.4 Define and create a complete project management tool
Project management tools have the capacity to help in the day-by-day of a

project. No matter the size of the project, these tools improve and help in
estimation and planning, scheduling, cost control and budget management,
resource allocation, collaboration, communication, decision-making, quality
management and documentation or administration systems.
30
To ensure the best results, the implementation of this type of tool must be done in
the earliest stages of the project. This means establishing roles, responsibilities
and timeframes before a project gets underway and enforcing these agreements
across the entire project team.
A positive feature of these tools is the possibility of creating automatic audit trails.
These audit trails captures every project action and can be enormously effective in
heading off disputes and demonstrating compliance with contractual agreements
and regulatory requirements.
These tools usually also have a file management system. Instead of compiling
handover information at a project’s completion, relevant documents are tagged as
they are created. This ensures handover materials are always up to date, and it
also allows for changes that optimize a building’s design for efficient operation and
maintenance over its lifecycle.
A good solution is the implementation of a BIM (Building Information Modelling)

tool. BIM, is a process for creating and managing all the information on a project
before, during and after construction. By allowing members of the project team to
first collaborate in a virtual space, BIM can lead to striking improvements in
design collaboration and clash detection.
4.3.5 Ensure a proper communication and information system
Information is a relevant source of risk. The definition and creation of a correct

information system to deal with all the documents related to the different
activities and problems found during the project is crucial.
In big projects, information flows constantly between the involved agents: owners,
financing entities, designers, contractors, subcontractors and other members of
the project team. A single platform that allows authorized members of the project
team to find the information they need using keywords or metadata-based
searches virtually eliminates the bottlenecks that are created when information is
stored in separate systems and requires dedicated team members for
management and retrieval.
The nature of infrastructure projects means work is completed on-site, in real

time, and often in remote areas. In these environments, access to project
information on a mobile device can have a dramatic effect on a project team’s
productivity.
But project information can lead to friction and intensify disputes when it is stored
in a proprietary system controlled by a single member of the project team. By
requiring teams to collaborate on a single, neutral, third-party platform, owners
make it possible for each member of the team to retain control of their
31
information. This builds trust, drives adoption, produces a more complete project
record and dramatically increases collaboration.
One of the most common causes of project confusion and inefficiency is the use of
separate systems for communication and document control. A single system
eliminates duplication, simplifies searches and makes it easy for new team
members to get on board.
Traditional methods of distributing information and tracking responses via email,

spreadsheet and FTP sites do not scale effectively for large infrastructure projects.
Instead, project teams are turning to cloud and mobile technologies to handle
processes ranging from bidding to field inspections and commissioning.
4.3.6 Assess cost and risk estimates side-by-side
The process for both cost and risk estimation should be undertaken in an
integrated approach, for example, both being combined into a single
forecasting model. This practice should help to achieve completeness and
to combat double-counting.
An integrated approach to cost and risk estimation is designed to prevent

risk allowances being duplicated in the project base cost and vice versa. It
is important to understand that the risk needs to be developed in light of
the base cost. The most straightforward way to achieve this discipline is an
integrated model on which the cost and risk estimators work closely
together.
4.3.7 Present risk exposure as a range, to promote more informed

decisions and communications
The usage of quantitative approaches in addition to qualitative ones to explain

uncertainty associated to early-stages of the project is advisable. This measures
tries to reflect the point that the cost risk and uncertainty is highest during the
early stages of projects. The present uncertainty leads to a tendency for overly
high single numbers to be quoted when senior figures have to provide
authoritative early forecasts of costs.
This practice can have a very large financial impact, and the use of ranges for
forecasting will help in reducing this inflationary trend.
4.3.8 Review main risk sources
When dealing with transport infrastructure projects, some risks are more common
than others. Special efforts can be undertaken to avoid these known risks
(Henning, 2010). Moreover, it is necessary to ensure that the risk map is always
32
updated and make reference to process owners through specific focused
interviews.
4.3.9 Ensure proper risk mitigation
The use of incentive schemes to ensure mitigation of risks and persecution of

opportunities has aso proven to be effective. This means that projects must be
also focused on delivering risk mitigation targets, and ensuring that the teams are
not penalised by withdrawing these reductions from contingency funding.
Two of the main activities to reduce risk exposure during risk management are
risk mitigation and exploiting opportunities. Mitigation of risks is a very simple
point that is often obscured by the whole system of more complicated processes
surrounding risk.
A very little change in this area may produce major reductions in the whole cost of
project. Personal incentives have been identified as one of the more profitable
measures due to their significance of behaviours in projects.
4.3.10 Use of reference-class forecasting and risk analysis
Another suggested activity consist in estimating and calculating early-stage costs

by adopting the results of specific risk analyses and cross checking with reference
class forecasting, instead of general approach by using the current optimism bias
approach.
This measure will encourage interrogation and mitigation of the risks driving risk
allowances and, eventually, will help in reducing project contingencies. An earlier
identification of specific risks will be developed, avoiding the unknown being priced
into optimism bias uplifts. This will lead into a reduction of the eventual need for
contingency funding. Significant risks will also be mitigated, again leading to
major cost savings. This measure reflects evolved risk management best practice
used by leading UK infrastructure organisations.
4.3.11 Employ well informed and rapid contingency processes
A transparent and accessible information system should exist and should put in
contact all levels of the hierarchical pyramid. This system should present a clear
guidance on risk analysis, with emphasis on the allocation of funding, and with
rapid but controlled contingency draw down.
Researches indicate that not well-planed contingency situations can lead to

undesirable behaviours at all levels, due to the protection teams seek over their
positions. This protection can include hiding contingencies in project base costs,
contractors adopting claims-based strategies, and ‘gaming’ behaviours to inflate
33
contingencies. Tortuous contingency draw down processes also lead to delays in
authorising the use of contingencies after risks have materialised.
A transparent and simple guidance on the level of mitigation allowes for within risk
quantification is a must to prevent such dangerous attitudes.
The development of adequate contingency funds is desirable. These funds can be

obtained by the use of different levels of contingency, from programme level to
project or construction levels.
4.4 Conclusions
Some conclusions arise from the review of best practices developed in this section.
The first and more relevant above all, is the lack of a common reference
framework. It is important to define risk in a single way and use it for all
infrastructure projects. Associated and related terms (hazard, threat,
vulnerability…) must also be described in the same way.
From the reviewed guidelines some remarks can be pointed out. In some of the
processes proposed, there is a relevant lack of transparency and communication.
To avoid risks, communication is a relevant issue to be treated carefully.
In some cases, a diagnosis step can help improving risk management and
reduction. Complexity and capabilities assessment can be a good starting point to
perform this diagnosis of the initial situation of the project.
None of the reviewed countries and guidelines present a normative risk

assessment guideline. All the studied cases are suggested frameworks, and the
decision on whether applying them is a managerial decision. The adoption of the
described best practices can help reducing the impact that potential risks could
have on the project lifecycle and increasing the probabilities of a successful
development.
34
5 Regulation & Standards in Risk Analysis of Transport Infrastructure
Projects
This Chapter gives an overview of the main Regulations and Standards in the field
of risk assessment in transport infrastructure projects at both European and
national level.
Furthermore, from the research study emerged that among all the identified
transport infrastructure phases, the construction phase is where the most
regulation is concentrated. For that reason a specific paragraph focuses on the
regulations and standards related to this specific phase, from general regulations
to specific insurance solutions adopted by each country in order to mitigate risks.
5.1 General framework at European level
The international literature and the experts opinion highlighted that risk analysis
has become an essential requirement for transport projects.
Although it is a recognized problem, to date there isn’t a clear framework of
specific legislative provisions which regulates risk assessment at a European level.
Legislation in this area is rather fragmented and most of the regulations and
standards related to the risks assessment in transport infrastructures are sector
specific. For that reason this section summarises the European regulatory
framework on the risk management in transport sector grouped by transport
mode.
The study has been performed thanks to desk-based research and analysis,
written consultations and expert interviews.
5.1.1 Rail
The application of risk based analysis has been introduced to the Railway system
with the publication of the dedicated standard EN 50 126 in 1999.
The EN 50126 establishes the guidelines for the fulfilment of the RAMS (Reliability,
Availability, Maintainability and Safety) activities along the whole life cycle of the
railway infrastructure.
Due to its general nature, the EN 50126 doesn’t define specific elements or
quantitative requirements. More specific elements related to the safety aspects
have been defined on the EN 50 128 and EN 50 129, in 2001 and 2003
respectively:
 EN 50 128: Software for Railway Control and Protection Systems.

 EN 50 129: Safety Related Electronic Systems for Signalling.
In the railway sector the application of these standards is more and more enforced
by European Regulations such as the Railway Safety Directive 2004/49/EC and
35
Commission Regulation (EC) No 352/2009 Common Safety Methods on Risk
Acceptance (CSM-RA).
The Directive 2004/49/EC of the European parliament and of the council of
29/04/2004 specifically introduces Common Safety Targets (CST) and common
safety methods (CSM) with regards to the railway system.
In particular:
 Article 6, paragraph 3 cites the "achievement of the safety targets". The

methods for assessing the achievement of the Common Safety Targets
introduced in Article 6 are subject of a separate provision "Commission
Decision on the adoption of a common safety method for the assessment
of achievement of safety targets, as referred to in Article 6 of Directive
2004/49/EC of the European Parliament and the Council"
 Article 6, paragraph 4, letter a) specifies that the Common Safety Methods
“shall describe how the safety level, and the achievement of safety targets
and compliance with other safety requirements, are assessed by
elaborating and defining: risk evaluation and assessment method”. The
CSM Regulation describes how the safety levels and compliance with other
safety requirements are assessed and met.
In April 2009 the Commission Regulation (EC) N° 352/2009 on a Common Safety
Method on risk evaluation and assessment provides a further implementation on
the adoption of a common safety method on risk evaluation and assessment as
referred to in Article 6(3)(a) of the Directive 2004/49/EC.
This CSM gives a harmonised framework for the risk assessment process through
the prescription of hazard identification, risk analysis and risk evaluation. The
regulation gives a broad framework for the use of risk assessment methodologies
to assess changes to the railway system.
In addition to Regulation and standards mentioned above, the Directive
2008/57/EC of the European Parliament and of the Council of 17/06/2008 on the
Interoperability of the rail system within the Community has the main objective of
accelerate the integration of the European rail network by introducing common
conditions and standards in order to ensure a high level of safety. The directive
concerns all the all phases of the railway system life-cycle .
The EU pursues its goal of an interoperable rail system by adopting and then
implementing uniform technical standards applicable in all EU countries.
Considering all the collected directives, the European Railway Agency provided in
2009 the ERA/GUI/01-2008/SAF which provides a guidance to help understanding
all the reference documents regarding the application of the common safety
method Regulation.
The document is divided into the following parts:
36
 Introduction. This sections defines the scope of the guide and provides the
list of reference documents.
 Explanation of the articles of the CSM regulation. This section explains all
the articles of the reference documents related to the CSM regulation
introducing the concepts of “risk management” and “risk assessment
process”.
 Annex I – Explanation of the process in the CSM regulation. This section:
- defines general principles and obligations related to the risk
management process, provides a general description of the risk
assessment process based on hazard identification, risk evaluation
and risk estimation
- introduces the demonstration of compliance with safety requirements
- highlights evidences from the application of the risk management
process.
 Annex II – To the CSM regulation. This section underlines the criteria
which must be fulfilled by the Assessment bodies
Main Regulations & Standards
EN 50 126-1, Railway applications - The specification and demonstration of
1
Reliability, Availability, Maintainability and Safety (RAMS), CENELEC, 1999
2 EN 50128:2001 Software for Railway Control and Protection Systems
3 EN 50129:2003 Safety Related Electronic Systems for Signalling
4 Directive 2004/49/EC - The Railway Safety Directive
Commission Decision on the adoption of a common safety method for the
5 assessment of achievement of safety targets, as referred to in Article 6 of
Directive 2004/49/EC of the European Parliament and of the Council
Commission Regulation (EC) N° 352/2009 on a CSM on risk evaluation and
6
assessment, adopted April 2009
Directive 2008/57/EC of the European Parliament and of the Council of
7
17/06/2008 on the Interoperability of the rail system within the Community
Guide for the application of the Commission Regulation on the adoption of a
common safety method on risk evaluation and assessment as referred to in
8
Article 6(3)(a) of the Railway Safety Directive, ERA/GUI/01-2008/SAF,
version 1.1
Table 1. Main EU regulation and standards related to risk assessment field in the railway
sector
5.1.2 Road
In the road sector the European regulatory framework on the risk analysis of
transport infrastructure regards two main Directives: Directive 2004/54/EC and
Directive 2008/96/EC that cover roads and tunnels in the Trans-European road
network.
37
Directive 2004/54/CE of 29/04/2004 defines new harmonised safety requirements
regarding organisational, structural, technical and operational aspects for tunnels
in the trans-European road network.
The directive regards operation, construction and design stages of the

infrastructure life-cycle, and it is referred to all tunnels longer than 500 metres
forming part of the trans-European road network.
Among the others, one of the main objective of the Directive is to achieve a large
degree of harmonisation and to adopt harmonised risk analysis for tunnels in the
trans-European road network. The Directive requires that safety measures are
deployed further to a preliminary risk analysis.
In particular, Article 6 specific on the risk analysis specifies that a risk analysis,
based on a methodology defined at national level, at the request of the
administrative authority, is carried out by an independent body for a given tunnel.
Moreover, Paragraph 2 highlight that “Member States shall ensure that, at
national level, a detailed and well-defined methodology, corresponding to the best
available practices, is used and shall inform the Commission of the methodology
applied the Commission shall make this information available in electronic form to
other Member States”
From the desk-based research emerged that a number of the stakeholder and
experts are in favour of the integration of Directives 2004/54/EC with Directive
2008/96/EC on road infrastructure safety management. They see benefits in
reducing the differences in the approach taken to safety in tunnels of different
lengths (i.e. below and above 500 m).

Directive 2004/54/EC OF THE EUROPEAN PARLIAMENT AND OF THE
1 COUNCIL of 29 April 2004 on minimum safety requirements for tunnels in
the Trans-European Road Network
Directive 2008/96/EC OF THE EUROPEAN PARLIAMENT AND OF THE
2
COUNCIL of 19 November 2008 on road infrastructure safety management
Table 2. Main EU regulation and standards related to risk assessment field in the road
sector
5.1.3 Maritime
In the maritime sector there is not a specific legislative framework related to the
risk assessment of maritime transport infrastructure.
Maritime legislation related to this field started with the prescription of

international standards in maritime security as a new chapter in the International
Convention for Safety of Life at Sea (SOLAS Convention) (IMO, 1974). This
addition, together with the International Ship and Port Security Code (ISPS Code)
38
(IMO, 2002), identifies a large juridical structure to defend ships and ports from
the risk of illicit attacks (i.e. terrorism) through a series of preventive measures.
Since the objectives of the IMO amendments, which introduced the ISPS Code,
cannot be realised by the Member States individually, the EU adopted Regulation
No. 725/2004 which intends provide a basis for the harmonised interpretation and
implementation of the measures adopted by the SOLAS amendments and the ISPS
Code. Regulation 725/2004 is complemented by Directive 2005/65/EC, which goes
beyond port facility boundaries in establishing security measures that shall be
observed in ports.
As described in the SOLAS and ISPS codes, ships and ports protection is based on
the adoption of active and passive measures constructed on three security levels
whose application is related to risk assessment (IMO, 2002a, b).

IMO (International Maritime Organization). (1974). International Convention
1 for the Safety of Life At Sea. International Maritime Organization (IMO),
London.
IMO (International Maritime Organization). (2002a). International
Convention for the Safety of Life At Sea, IMO activities to enhance maritime
2 security, Conference of Contracting Governments to the International
Convention for the Safety of Life at Sea. International Maritime Organization
(IMO), London.
Regulation (EC) No. 2004/725/EC of the European Parliament and of the
3
Council on enhancing ship and port facility security.- ISPS Code
Directive (EC) No. 2005/65/EC of the European Parliament and of the
4
Council on enhancing port security.
Table 3. Main EU regulation and standards related to risk assessment field in the maritime
sector
5.1.4 Air
The Risk Management Activity in the air transport sector is a continuous,

worldwide extended, process, where regulation coming from technical entities has
the same value of the rule of law. In general, regulation concerning air safety is
generally delegated by the legislator to technical agencies such as ICAO (World),
EASA (EU), etc. In fact, safety issues receive a top-level attention from the
aeronautical world, which has a rooted culture for safety.
5.1.5 Conclusion
This section gives the legislative framework of the main European regulations &
standards related to the field of risk analysis in the transport infrastructure sector.
The study highlights that legislation in this area is very fragmented and sector
specific. Each country has to adopt the European Directives keeping Directive
scope. However, any country has its own internal legislation. In all the analysed
39
countries emerged that the national transpositions of the EU Directives are not
exhaustive and no country seems to have developed a fully complementary
internal regulation, providing a perception that the issue is fully disciplined.
5.2 General framework at a National level
In accordance with the European Directives, all the Member States have to
correctly transpose the provisions into their national legislation and to develop
their own laws in accordance with the European aims.
Considering that each country refers to its own specific legislation which is in
native language, we reported three countries as significative sample of peculiar
national level.
5.2.1 France
France has a well-developed transport network. It includes the following

infrastructures:
 1,000,000 km of roads (incl. 11,500 km of high-ways)

 30,000 km of rail
 9,000 km of waterways (incl. 1,600 km adapted to 3,000-ton crafts)
 14 major seaports, river ports and terminals
 460 airports (incl. 40 with paved runways > 2,500 m)
Despite this dense network, new infrastructure projects are necessary to address
the increasing need for mobility and the replacement of ageing infrastructures.
This is why France has to cope with risks at all stages of the infrastructure life
cycle.
From the state of the art emerged that there is no unified risk assessment method
provided by the French law.
However, the French public authorities are aware of the benefits of assessing risks
efficiently, especially when public funds are limited. Therefore, they give general
recommendations to conduct risk analysis in transport infrastructure projects.
Finally, as in many countries, risks related to climate change become more

important in France. These risks are shared by all transport sectors and should be
considered at all time in the life-cycle of infrastructures. This is why new
regulations and standards specifically dedicated to this issue were published lately.
Partial regulations and standards
Legislation transposed from EU directives
In the French law, most standards transposed from EU directives and related to
risk analysis in transport infrastructures are also sector specific. The following
40
table provides references to specific legislations transposing EU directives in the
rail, road and maritime sectors.
EU directive Sector French transposition

2004/49/CE Rail Act n°2002-3
Decree n°2004-85
Decree n°2005-101
Decree n°2005-1633
Act n°2006-10
Decree n°2006-369
Decree n°2006-1279
Decree n°2006-1534
Decree n°2007-1867
Decree n°2008-148
2004/51/CE Rail Decree n°2005-1633
Decree n°2006-368
Decree n°2007-1867
2008/57/CE Rail Act n°2009-1503
Decree n°2010-814
Decree n°2013-318
2004/54/CE Road Act n° 2006-10
Decree n°2006-1354
2008/96/CE Road Act n°2011-12
Decree n°2011-262
Decree n°2011-718
2005/65/CE Maritime Decree n°2007-476
Decree n°2007-937
Table 4. Transposition of EU directives in France
National legislation
In France, most regulations and standards related to the risks in transport

infrastructures are sector specific. Accordingly specific laws and decrees govern
risk assessments and mitigations, whether they are related to road, rail, air or
waterways.
For instance, a recent decree (Decree n°2017-439) imposed that any new rail
system or sub-system should be designed, built and maintained so that when it is
connected to the main system, the overall risks remain equivalent or become
lower. Even though the decree does not require a specific risk assessment
method, the risks associated to the main system and those related to the new
sub-system should be investigated before and after interconnecting the two
systems.
41
In a different situation, a ministerial order describes new standards for bridges. In
this example, both the road sector and the rail sector are covered (depending on
the purpose of the bridge). Although only the seismic risk is concerned by this new
regulation, this act is very accurate in referring to the methodology and norms to
be used when assessing the risk. However, the fact that the regulation only
applies to new bridges shows that not all life cycle stages are concerned, at least
during a transition period.
In some cases, the French law specifies that detailed risk assessments are
mandatory, especially during the early stages of the infrastructure life cycle and
regardless the transport sector. The two most explicit examples are related to
financial and environmental risks:
 The first example is a recent decree (Decree 2016-522) forcing any public
authority to consult a newly-established governmental office (FIN INFRA)
for funding new public infrastructures, especially when private capitals are
involved through public-private partnerships. This support expert group is
in charge of assessing three types of risks (financial, budgetary, and legal)
prior to the investment decision during the procurement stage. This new
act is not specific to transport: all public infrastructures are concerned.
This is a significant progress towards a unified risk assessment method for
public infrastructure projects since until then each ministry had its own
procedure (E. Besson, 2008).
 The other example is an environmental act (Act n° 2003-699) embodying
the Environment Code and related to the transport of hazardous materials.
According to this act, some transport infrastructures (parking areas, rail
marshalling yards, river and seaports, multimodal platforms) are subject
to serious environmental risks when hazardous materials are stored,
loaded or unloaded. Therefore a detailed risk assessment must be
conducted for these infrastructures. The act is completed by a ministerial
order to specify the methodology to be used.
Finally, the French law n. 82 -1153 of the 30/12/1982 specifies that all major
transport infrastructures1 involving public funds should be audited no later than
five years after commissioning to compare ex-ante and ex-post socioeconomic
assessments.
General recommendations for risk assessments
Even though the regulations and standards associated to risk assessment in

transport infrastructures are sparse in the French legislation, the public authorities
provide more general information through guidelines and recommendations.
1
In France, in the transport infrastructure sector, projects above €83M are considered as
major projects [5].
42
A recent ministerial report (Gollier C., 2011) points the wide uptake of economic
methods to evaluate transport infrastructure projects but highlights a lack of
acknowledgement of risks and uncertainties. In the first place, this report recalls
theoretical tools and common practices for risk assessments. Then it provides
guidelines and recommendations.
All recommendations are in favour of a transparent and unified risk assessment

process, in order to prioritise infrastructure projects which are essential when both
public and private financing capacities are limited.
New regulations and standards related to climate change
Natural hazards are already a threat to a number of transport infrastructures in

Europe. The most frequent example is probably the floods and their damages to
road infrastructures. In the coming decades, the climate change is expected to
increase the risks related to natural hazards towards many sectors (agriculture,
tourism, forest, fishing, etc.), including infrastructures (T. Cochran, 2009). While
it is urgent to fight climate change by reducing CO2 emissions, it is also essential
to mitigate the risks of natural disasters by adapting our infrastructures (both
existing and new ones).
This is the purpose of the French National Plan of Adaptation to Climate Change
(PNACC) (MEDDTL, 2011) implemented in 2011. This plan proposed a list of
actions to conduct between 2011 and 2015 to adapt different sectors of the
French economy to climate change. Since then, the results have been evaluated
and an updated version of the plan is expected in 2017.
In the case of transport infrastructures, the plan proposed three actions, some of
which resulting in a public report of action:
 Action 1: To review and adapt existing technical frameworks for the

construction, the operation and the maintenance of transport networks
 Action 2: To evaluate the impact of climate on demand in the transport
sector
 Action 3: To define a unified methodology to assess the vulnerabilities of
transport infrastructures
 Action 4: To assess the current vulnerabilities of transport infrastructures
in France and to prepare
The report of action 1 provides a qualitative description of the risks faced by
transport infrastructures with respect to climate change (Cerema, 2015).
The report of action 3 is probably the most valuable in view of the objectives of
RAGTIME and the European efforts toward an integrated risk management tool for
transport infrastructures (Cerema, 2015). It provides a detailed methodology to
assess risks related to climate change and a number of case studies.
43
This methodology covers all transport sectors and it is likely to be enshrined in law
when the PNACC national plan is updated. Thus, there is a chance that concerns
about climate change act as initiating drivers for the unification of the French
regulation and standards with respect to the risk assessment in transport
infrastructures.
5.2.2 Italy
Italy has a well-defined transport network which includes the following

infrastructures:
 845,000 km of roads (including 6,700 km of high-ways);

 24,300 km of rail;
 2,400 km of waterways;
 156 seaports;
 136 airports (incl. 40 with paved runways > 2,500 m).
In Italy, transport network subject is ruled by concurrent legislation (according to

Art. 117 of the Italian Republic Constitution).
This means that the Central State has to rule the matter with each and any
Region. Therefore, it is not possible to define a National body of laws univocally
ruling the subject of transport infrastructures risk analysis.
Summing up, the Italian set of laws regulating this matter has a three level
structure:
 EU directives transposition (In Italy directives are enforced through

legislative decrees of the Central Parliament);
 Italian legislative specific decrees (including ministerial decree setting
guidelines for regional legislation) which have to take into account EU
directives’ aims but fall outside their perimeter;
 Specific local (at Regional or Municipal level)
Taking all this into account, we can safely state that there is not a uniform and
univocal body of laws ruling the matter in Italy.
The following paragraphs summarise the main Decrees at the first two levels.
Partial regulations and standards
Legislation transposed from EU directives
Rail
The D. Lgs August 10th 2007 “Actuation of directives 2004/49/CE and 2004/51/CE
concerning safety and development of communitarian railways”.
44
This decree is the transposition of the European directive 2004/49/CE. It
disciplines the safety conditions required to obtain access to the railway services
market and aims to the retention and, wherever reasonably feasible, the
progressive improvement of the Italian railway system safety level. This should be
achieved considering evolution of existing regulations, technical and scientific
progress and prioritizing the activity of preventing sever incidents, through: a)
adjustment and harmonization of national and European body of law; b)
progressive adoption of common safety objectives and common safety methods,
defined in the attachments to this decree; c) identification of a national entity in
charge of safety and another investigative entity in charge of conducting inquires
about railways accidents and inconveniences; d) assignment of tasks and
competencies to the above-mentioned entities and responsibility allocation among
involved subjects.
D.Lgs. 191/2010 Italian law acknowledging European directive 2008/57/CE. This

directive aims to establishing the requirements to be met in order to achieve the
interoperability of the railway system, according to regulation 2004/49/CE. Said
conditions concerns design, construction, putting into service, restructuring,
renewal, operating and maintaining of all the elements composing the systems.
This also includes professional qualifications, health and safety conditions of
personnel contributing to system operation and maintenance.
In Italy, safety in railways galleries is ensured through a quantitative Risk analysis
that allows to verify that specific safety requirements are met.
Safety in railway galleries is disciplined by D.M. 28/10/2005, which, in Attachment
III, requires to conduct a quantitative analysis of risks in railway galleries that
may occur during operation. In particular, it defines a specific risk assessment
methodology and impose precise level of risk acceptability.
Finally RFI DSR SIGS LG 01 is the guideline for the risk assessment application
extended to the railway tunnels – D.M. 28/10/2005.
Road
The Directive 2004/54/CE was transposed in Italy by the Decree n. 264 of 5

October 2006. This defined the “Commissione permanente per le gallerie” as
Administrative Authority for all tunnels on the national territory. The
Administrative Authority act also as Inspection Entity.
The Directive 2008/96/CE was transposed in Italy by the Law Decree n. 35 of 15

March 20011. It introduces a series of procedures that aims to improve safety
levels of roads infrastructures. For every procedure a clear responsible subject has
been defined. This decree requested a number of implementing decrees, which
has to be defined following a uniform and coordinated logic, for which the Ministry
of Infrastructures and Transportation is responsible. At present, some of the
45
implementing decrees still needs to be drafted but the decree is fully enforced
through transitional rules.
Maritime
The CE/65/2005 was implemented in Italy by the D Lgs. 203 6/11/2007.
Air
As specified above, regulation concerning air safety is generally delegated by the

legislator to technical agencies. In Italy, ENAC (National Civil Aviation Authority) is
responsible for issuing regulation concerning general aviation, including risk
assessment requirements. In accordance with European regulations prescribed by
EASA, a Safety Management System has to be in place for every aeronautical
activity to be conducted. More specific prescriptions regarding airport Safety have
been issued by ENAC in accordance with Article 715 of the Navigation Code. These
prescriptions are contained in the Regulations regarding constructions and
operations of large airports.
Italian legislative specific decrees
The Italian legislative specific decrees (including ministerial decree setting

guidelines for regional legislation) have to take into account EU directives’ aims
but fall outside their perimeter. As specifies above, the Central State has to rule
the matter with each Region. For that reason, at a national level, it is not possible
to define a body of laws univocally ruling the subject of risk analysis in transport
Furthermore, in Italy the legislation is fragmented and the issue is not fully
disciplined.
This confirmed by the results obtained from the RAGTIME survey performed in
Task 1.1 of the WP1 in which emerged that the 80% of the owner/operator
interviewed in Italy in the road sector doesn’t use specific risk evaluation
procedures during the transport infrastructure life-cycle.
An example of national decree derives from the “Ministero delle Infrastrutture e

dei trasporti” (Italian Ministry of Transport and Infratsructure): Decreto del
ministero delle infrastrutture e dei trasporti 28 Ottobre 2005.
Concerning road and rail transport sectors, this decree is the most specific on the
risk assessment of transport infrastructure projects. The decree concerns all
railway tunnels of length higher than 1000m, and it concerns railways already
operational, under construction or being designed.
Art. 13 prescribes general principles and methodology (detailed in Appendix III)

for the risk in tunnels which is mandatory. Contents and results of risk analysis
46
must be attached inside the documentation concerning safety. Risk analysis must
demonstrate that, following parameters and safety limits presented in Exhibit II,
safety objectives specified in Exhibit III are met.
Concerning to the environment
The National to Climate Change Adaptation Strategy (Strategia Nazionale di

Adattamento ai Cambiamenti Climatici - SNAC), adopted by the Decree No.86 of
16 June 2015 identifies the main impacts of climate change for a number of
specific sectors and proposes adaptation actions.
In May 2016, the National Plan for Adaptation to Climate Change (Piano Nazionale
di Adattamento ai Cambiamenti Climatici - PNACC) was launched to implement the
SNAC.
In Italy, to date, there is not a unique, specific and complete reference that will
allow us to assess the effects of climate change on transport and the risk
associated. Also in this case some positive examples exist at the Regional level as
the Ancona's Adaptation Plan (ACT, 201324).
5.2.3 Spain
Spain has a diversified high capacity road network and a well-developed high
speed railway network. The capacity offered by both seaports and airports, are
also considered sufficient to meet the short and mid-term demands. In summary
the transport infrastructure network includes the following elements:
 Over 15,000 km of railway, with more than 3,200 km of high speed type.
 Over 26,000 km of roads, being more than 15,000 km of highways.
 46 airports and specific 2 heliports.
 47 seaports of general interest.
At the moment there are certain uncertainties that proves difficult to have a
reliable forecast of the Spanish mobility demand, both internal and external. The
chosen approach is to establish a reference scenario based on the structural
growth capacity of the Spanish economy in the long term. The demand for
associated mobility is then estimated through the corresponding elasticity between
economic growth and the demand for mobility.
The external demand is mainly influenced by the development of the tourism and
exterior commerce, affecting the aerial and maritime modes.
Currently there is not a single risk assessment method provided by the Spanish
law, because of the wide application fields and the particular characteristics of the
different elements to be analysed.
47
However, there is legislation and norms on risk analysis and instructions from the
“Ministerio de Fomento” (Spanish Ministry of Development and Civil works)
providing instructions and recommendations about risk associated with the
different fields and project phases. This is to minimize the risks relatives to costs,
quality, deadlines, socials and other elements that would likely be affected.
General recommendations, regulations and standards
In addition to the legislation concerning to particular aspects about transport

infrastructure risk analysis, there are some general recommendations, regulations
and standards available.
On the one hand, the Ministry stablishes, by “nota de servicio 3/2014” that the
minimum contents to be included on a project’s profitability study are: a
quantification and estimation of the benefits, social costs, determination of
decision making tools and indicators, and the estimation of risks associated to the
project and decisions adopted.
Moreover, it provides the “Manual para la evaluación económica de proyectos de

transporte” (Manual for economic evaluation of transport projects), which takes
into account uncertainty and risk decision criteria. For example the uncertainty
associated to de demand prediction, economic estimation of external effects, etc.
On the other hand, by the law Real Decreto 393/2007 it is approved the Norma
Básica de Autoprotección de los centros, establecimientos y dependencias
dedicados a actividades que puedan dar origen a situaciones de emergencia.
(Basic Regulation of Self-protection of centres, establishment and offices
dedicated to activities that could cause emergency situations).
The purpose of this basic standard is to stablish minimum essential criteria for the
regulation to self-protection, for the definition of the activities that it required, and
for the elaboration, effective implementation and maintenance of the effectiveness
of the plan, indicating the minimum content of the plan.
The plan must be elaborated by a competent technician trained to rule about

aspects relatives to the self-protection against the risks that this activity involves.
There is a catalogue of activities to which reference is made, including activities

with sector specific regulations, such as certain transport infrastructures activities
(tunnels, seaports, airports, aerodromes and other airport facilities).
Furthermore, there are also activities without sector specific regulations, including
transport infrastructures as for example Terrestrial Transport Stations and
Interchangers of 1,500 people or more, metropolitan railways, train tunnels of
1,000 m length or more, toll highways, Hazardous Goods Parking Zones by road ,
train and seaports.
48
The instruction EA 0031 “Sistema de gestión del riesgo” (Risk management
system) stablishes the requirements to define, implement, maintain and improve
a risk management system to help organisations minimize risks of negative
consequences and maximize those with positive consequences. This instruction is
applicable to any type of organization, regardless of its size, the sector to which it
belongs and the context in which it develops its activity.
On the other hand, the “Norma UNE-EN 62198 (EN 62198, 2014), “Gestión de
riesgos del proyecto”” (Project Risk Management norm) provides generic principles
and guidelines for managing risk and uncertainty in projects from a systematic
approach, according to ISO 31000 "Risk Management - Principles and Guidelines".
The ISO 31000 is an international standard with generic principles and guidelines,
with no specific industry or sector, including strategies, decisions, operations,
processes, functions, projects, products, services and assets, applicable to any
type of risk, Irrespective of their nature or the nature of their consequences
(positive or negative). In this way, it also addresses the risks by considering the
response to a potential or actual incident, as well as the planning of actions to
recover from an event that may lead to an interruption of the activity of the
organization.
In this way, the regulation “Norma UNE-EN 31010 (EN 31010, 2010), Gestión del
riesgo. Técnicas de apreciación del riesgo” includes aspects of risk management
and risk evaluation techniques”.
The law “Ley 8/2011” (2008/114/CE), on the other hand, stablishes measures for
the protection of critical infrastructures, taking into account that at present there
are risks associated with acts of terrorism or other events.
In the general field of transport organizations, there is a Guide for the

"Development of a SWOT analysis in transport organizations", also facilitated by
the same Ministry, taking into account weaknesses, threats, strengths and
opportunities.
Specific recommendations, regulations and standards.
With a more specific nature, different methodologies exist that cover diverse
aspects:
With regards to tunnel infrastructure, the “Methodology of risk analysis for tunnels
of the road network”, which deals with the need to carry out a risk analysis to
justify variations with respect to the minimum requirements established. In this
way, the objective is to assure the homogeneity, reliability and consistency of the
analysis by requiring a methodology that must be approved by the administrative
authority.
49
The obligation to prepare a risk analysis is established in Royal Decree “Real
Decreto 635/2006” (transposition of the EU directive 2004/54/CE), (of application
in the design and construction phase), and develops the description of the risks of
possible occurrence in the operation phase, its consequences and the measures
taken to minimize the likelihood of accidents and their consequences.
The law observers cases such as non-compliance with the basic structural
requirements, innovative techniques exceptions, special features in relation to
safety parameters, deviation from minimum equipment requirements, slopes of
more than 3%, right lane width sections with less than 3,5 meters
In the railway sector, the risk relative to the personal security is studied by the
law “Ley 38/2015” (2012/34/CE). The law requires that the railway undertaking
the risks has established its own safety management system. This system should
comply with the requirements of railway control, traffic and safety systems, the
knowledge and requirements of its personnel related to the safety of the railway
traffic and the technical characteristics of the rolling stock it will use and the
conditions for its maintenance, in order to control the risks and operate in the
network in a safe way.
In addition, in those ports of general interest in whose service areas railway

infrastructures exist, the port authorities shall have in place a safety management
system that ensures the proper railway activity risk control, within the port service
area and relevant self-protection plan in their facilities.
In relation to railway systems, there is also a “Guía General para la Aplicación del
Método Común de Seguridad para la Evaluación del Riesgo (Adif)” (Guide for the
Application of the Common Method of Security for Risk Assessment), to comply
with Implementing Regulation (EU) No. 402/2013 and amendment No.
1136/2015.
This legislation constitutes a harmonized framework for the risk assessment

process, which is mandatory, providing the methodology for risk assessment and
assessment throughout the railway system.
In this way, this Guide constitutes a general reference for the application of the
methodology of the evaluation of the risk. Specifically, this Guide is applicable to
changes in the railway system (technical, operational or organizational),
encompassing all possible phases of the life cycle of systems: definition,
specification, design, development, production, installation, Operation and
withdrawal of service.
Concerning to roads, the law “Ley 37/2015” promotes correct planning,

conservation and exploitation of the system, including prioritization of
investments, impact assessment and cost-benefit analysis, as well as evaluation
50
and control procedures and criteria for the different phases of the life cycle of the
road.
This includes environmental assessment, evaluation and audits of road safety,

cost-benefit evaluation, multicriteria analysis and financial viability.
In relation to the social risks, due to traffic accidents, the norm “Norma ISO 39001
Sistemas de Gestión de la Seguridad Vial” (Road Safety Management Systems,
RTS: Road Traffic Safety), allows organizations to reduce, and ultimately eliminate
the risk of deaths and serious injuries resulting from these accidents.
This regulation is applicable for public and private entities involved in the road
system, from a point of view that obtains a more effective use of the road system
regarding to the desired results.
The implementation of a Road Management System according to the UNE-ISO

39001 entails three advantages for the organizations:
 Promotes a Safe System approach whose long-term goal is the elimination

of deaths and serious injuries from traffic accidents, based on the
promotion of RTS good practices aimed at reducing them.
 It avoids significant economic costs and loss of profits in the company,
while at the same time improving the productivity and profitability of the
business, by ensuring maximum safety for the employees.
 Reinforces its position in the field of Corporate Social Responsibility,
adopting the spirit of shared responsibility of Road Safety among the
different actors of the road system
The Road Safety Management System focuses on the organization, its objectives
and goals of RTS, and guides the planning of activities that allow them to be
achieved through a RTS Safe System approach.
Concerning to the environment, the regulation Norma UNE 150008, 2008 “Análisis
y evaluación del riesgo ambiental” (Environmental risk analysis and evaluation), is
applicable in the field of the enterprises, public administrations and other
organizations. The norm is focused on evaluation and other aspects of
environmental risk management, establishing a framework for the possible third-
party verification of studies on the analysis and assessment of environmental risk
in various situations and activities.
5.3 Regulations & Standards in the main field of construction industry

with reference to the insurance market
In this section a specific in-depth analysis has been provided with reference to the
construction sector and supplementary country-by-country worksheet are
provided in Annexes in order to point out the main insurance solutions for
mitigating risks in this field. Among all the identified transport infrastructure
51
project phases, the construction phase is where the most regulation is
concentrated and where it has the most meaningful impact on execution. Several
regulation mandates mitigation to those risk that are most relevant to the
community, such as workers safety, environmental pollution, etc. Together with
operational mitigation, a mitigation that is often mandatory is an insurance cover.
Insurances usually represent an effective mitigation for risks that present a low
probability but a relevant severity. Knowing which insurance coverages are
mandatory is therefore relevant for the risk prioritization. For these reasons, it has
been decided to provide a special focus about existing regulations & standards in
the construction sector starting from general legislations and coming to the
definition of the mandatory insurance solutions used as mitigation measures for
transferring the risk.
In order to provide an exhaustive overview for each country involved in the

project, the analysis has been structured in five main sections:
 Summary and trends: this section summarizes the main regulatory

trends in the insurance sector throughout the construction of large
infrastructures.
 Building Contract Conditions: this section analyses the main building
contracts in each country and related insurance requirements (required by
law in public tenders and/or required on private tender).
 Building regulations: this section shows the main building regulations to
be followed by law in each country
 Contractors’ Liability: this section highlights third party liability of
general contractors involved in infrastructures development, very
important risk to be governed.
 Pollution and environmental Liability: this section underlines the civil
liability of the construction companies with reference to the pollution and
environmental risks that may arise.
52
Table 4 summarises the main insurance solutions for each country involved in the
study.
Policy Italy Belgium France UK Germany Slovenia Spain Switzerland

Professional
X X X X X X
Indemnity
Thrid Party /
General X X X** X X X X X
Liability
Decennial
X X X X X
Liability
CAR/EAR X X X X X X
Pollution
X* X X X X X X
/Environmental
Table 4. Main insurance solutions provided by each country
*Only for the following activities: nuclear activity, transportation, storage of hazardous materials and
distribution of gas
**Only for dwelling
6 Major studies and projects in risk assessment of transport

infrastructure projects
This section describes major studies and projects in which RINA Consulting,
formerly D’APPOLONIA, and Louis Berger have been involved, in the main field of
transport infrastructure dealing with risk assessment, management and
mitigation.
The section is divided in two main chapters: the first chapter deals with Research
Projects and the second one deals with Design and Construction Projects.
For each project a sheet has been created structured as follows:
 Introduction
 Project description
 Main objectives
 Type of risks addressed
 Analysed elements
 Faced hurdles, control and mitigation measures
Conclusions are drawn at the end of the section with particular regards to the
main faced type of risks and the derived actions.
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6.1 Research Projects
6.1.1 SiNER-G: Systemic seismic vulnerability and risk analysis of

buildings, lifelines and infrastructures
Introduction
SYNER-G is a European collaborative research project funded by the European

Commission (Seventh Framework Program, Theme 6: Environment) under Grant
Agreement no. 244061 with a project duration of 41 months (2009-2013). SYNER-
G coordinated the expertise and multidisciplinary skills of 12 European
participants, coming from seven European Member States, together with partners
from Norway and Turkey under the coordination of the Aristotle University of
Thessaloniki. The scientific and technological excellence of the project consortium
was further improved by the participation of two highly experienced partners from
the U.S. and Japan with relevant and long standing knowledge on vulnerability
and seismic risk management.
Project description
SYNER-G developed an innovative methodological framework for the assessment

of physical as well as socio-economic seismic vulnerability at the urban/regional
level. The built environment is modeled according to a detailed taxonomy into its
component systems, grouped into the following categories: buildings,
transportation and utility networks, and critical facilities. Each category may have
several types of components. The framework encompasses in an integrated
fashion all aspects in the chain, from regional hazard to fragility assessment of
components to the socioeconomic impacts of an earthquake, accounting for all
relevant uncertainties within an efficient quantitative simulation scheme, and
modeling interactions between the multiple component systems in the taxonomy.
The layout of SYNER-G methodology and software tools is illustrated in Figure 1.
The prototype software developed in SYNER-G provides several tools for pre and
post-processing to estimate seismic losses and to evaluate post seismic needs and
priorities (Figure 2). The SYNER-G methodology and tools have been tested to
selected case studies at urban level: the city of Thessaloniki in Greece and the city
of Vienna in Austria, at system level: the gas system of L’Aquila in Italy, the road
network of Calabria region in Southern Italy and the electric power network of
Sicily, as well as in complex infrastructures: a hospital facility in Italy and the
harbor of Thessaloniki, accounting for inter- and intra-dependencies among
infrastructural components and systems.
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Figure 11. Layout of SYNER-G Methodology & Software tools (from Syner-G brochure)
Main objectives
The main goals of the project are:

 To propose and develop appropriate fragility relationships for the
vulnerability analysis and loss estimation of all elements at risk;
 To develop social vulnerability relationships and other means of
quantifying the impact of earthquakes on vulnerable communities;
 To develop the basis and principles of a methodology, ad relative tools, for
systemic vulnerability assessment accounting for all components exposed
to seismic hazard. Socio economic issues will be thoroughly considered as
an impact factor for the holistic evaluation of vulnerability and loss
estimates;
 To test the methodology in appropriate selected case studies;
 To implement the methodology and the tools in an open source platform
 To develop guidelines and to disseminate the results and output.
Type of risk addressed
The project mainly dealt with the following natural and anthropic risks:
 Seismic risk: the project aimed at the identification of seismic vulnerability
curves of different items to be used in seismic probabilistic vulnerability
assessment. Fragility curves constitute one of the key elements of seismic
risk assessment. A comprehensive review has been carried out of fragility
curves for the most important elements at risk. New fragility curves have
been developed where necessary, considering the distinctive features of
European elements.
Analysed elements
The project mainly dealt with the following items:
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 Buildings: the main buildings typologies present in Europe were treated
within this project with first a literature review of existing fragility curves
and then, if needed, the development of new analytical fragility functions;
 Lifeline network: different kinds of utility network were analyzed. Electric
power systems, gas and oil networks, water and waste-water network;
 Infrastructures: roadway bridges, roadway and railway elements and
harbour infrastructure were analyzed.
Control and mitigation measures
The project mainly dealt with the identification of a tool to define the seismic
vulnerability of all components exposed to seismic hazards. The main objective of
the project was then to “control” the seismic risk of the different exposure items.
The results of the project can be also used “to mitigate “ the risk in the sense that
the user can see the effect of the different mitigation measures in the modification
of the seismic fragility curves.
6.1.2 HAZUS: FEMA's Methodology for Estimating Potential Losses from

DISASTERS
Introduction
Hazus is a project developed under the supervision of the FEMA (Federal

Emergency Management Agency) within the funding source of the NERHP
(National Earthquake Hazards Reduction Program).
Hazus is a nationally applicable standardized Earthquake, Wind, Flood
methodology that contains models for estimating potential losses from
earthquakes, floods, and hurricanes. Hazus uses Geographic Information Systems
(GIS) technology to estimate physical, economic, and social impacts of disasters.
It graphically illustrates the limits of identified high-risk locations due to
earthquake, hurricane, flood, and tsunami. Users can then visualize the spatial
relationships between populations and other more permanently fixed geographic
assets or resources for the specific hazard being modeled, a crucial function in the
pre-disaster planning process.
Project description
Hazus is used for mitigation and recovery, as well as preparedness and response.
Government planners, GIS specialists, and emergency managers use Hazus to
determine losses and the most beneficial mitigation approaches to take to
minimize them. Hazus can be used in the assessment step in the mitigation
planning process, which is the foundation for a community's long-term strategy to
reduce disaster losses and break the cycle of disaster damage, reconstruction, and
repeated damage. Being ready will aid in recovery after a natural disaster.
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Potential loss estimates analyzed in Hazus include: physical damage to residential
and commercial buildings, schools, critical facilities, and infrastructure, economic
loss, including lost jobs, business interruptions, repair, and reconstruction costs;
social impacts, including estimates of shelter requirements, displaced households,
and population exposed to scenario floods, earthquakes, and hurricanes.
Increasingly, Hazus is being used by states and communities in support of risk
assessments that perform economic loss scenarios for certain natural hazards and
rapid needs assessments during hurricane response. Other communities are using
Hazus to increase hazard awareness.
Main objectives
 HAZUS estimates provide decision-makers with evidence of the nature and

extent of the earthquake risk
 HAZUS estimates are in a format useful for garnering public support for
public policies and actions to reduce future earthquake damage and losses.
 HAZUS can determine the impact of other hazards that may be triggered
by the main event, such as ground failure, fire, and inundation from dam
failure.
The project mainly deals with the following natural and anthropic risks:
 Seismic risk;
 flooding;
 hurricane.
Analysed elements

 Buildings including non-structural components;
 Infrastructures.
The Hazus Earthquake Model was designed to produce loss estimate in planning
for earthquake, flooding and hurricanes risk mitigation, emergency preparedness,
response and recovery. The methodology deals with nearly all aspects of the built
environment, and a wide range of different types of losses. Extensive national
databases are embedded within Hazus, containing information such as
demographic aspects of the population in a study region, square footage for
different occupancies of buildings, and numbers and locations of bridges.
The project mainly dealt with the identification of a tool to define the vulnerability
of buildings and infrastructures exposed to seismic, flooding and hurricane
hazards. The main objective of the project was then to “control” the seismic risk of
the different exposure items.
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6.1.3 STRIT: Methods and Technologies for Managing the Risk of the
Transportation Infrastructures
Introduction
The STRIT project was developed in the framework of the activities proposed by
the Operative Italian Research Program (PON-POR 2012-2015). The project
coordinator was coordinated by the Naples state University Federico II, with other
partners: Stress scarl, Amra S.c.a r.l., Eucentre, Diagnosis S.r.l., Dismat
s.r.l.Boviar S.r.l., L&R laboratori e Ricerche S.r.l. RINA Consulting was involved
within the Stress scarl consortium.
Project description
The project aims to define methods and to develop innovative and sustainable
technologies for the assessment and management of natural and anthropic risks in
urban environments, in order to address mitigation strategies based on an
integrated tool to support the decision (DSS).The innovative approach adopted in
the project is the evaluation of integrated risk between the different sources of
hazard, and the different sub-systems that compose the urban system, taking into
account the interaction phenomena that take place due to the functional
connections between components and subsystems.
The project addressed the assessment, managing and mitigation of natural risks
for the big road infrastructures with the main aim to identify the prioritization of
the required intervention of risk mitigation for the viaducts, bridges and tunnels of
the Italian main networks.
The project foreseen demonstrators and testing activities linked to the research
tasks. A certain number of bridges located in different Regions of southern Italy
(Campania, Calabria, Sicily) were used as project demonstrators, while lab tests
were carried out at the Lab Testing Facility of University "Federico II" in Naples
and at the Lab Facility of Eucentre, a Research Institute based in Pavia.
Main objectives
 Development of methodologies to assess vulnerability of major road

infrastructure;
 Tools and methodologies to lower risk for natural hazards;
 Advanced monitoring of structures;
 Real time seismic risk management and emergency management.
 seismic risk;
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 flooding;
 anthropic.
Analysed elements

 Buildings at the urban levels;
 Infrastructures
Figure 12. Valguarnera viaduct used as demonstrator
The project mainly dealt with the identification of a tool to define the natural and
antropic risk of infrastructures. The main objective of the project was then to
“control” the risk of the different exposure items. Different monitoring systems
applied to the case studies were used as mitigation measures.
6.1.4 RESIS: RESEARCH AND DEVELOPMENT IN THE FIELD

OFEARTHQUAKE ENGINEERIGN and ENGINEERIG SEISMOLOGY
Introduction
The project was developed in the framework of the activities proposed by the
Italian Institute of Geophysics and Volcanology (INGV) within the Program for the
Research in the field of Earthquake Engineering and Engineering Seismology
(PRO.S.I.S.) for the identification of tools and methodologies for the seismic risk
evaluation in the Italian territory. RINA Consulting was involved in the project as
coordinator.
Project description
Within the RESIS project, the tool VULSIN was developed. This program packaging
is able to analyze the physical model of a lifeline, at a local level, by considering
its vulnerabilities and connections.
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The programs simulates seismic events and to estimate vulnerability and risk
scenarios starting from the network model. The elements vulnerability, the
characterizing parameters and the associated risk are defined in a probabilistic
manner.
The software uses the approach named “Infrastructure Risk Analysis Model -
IRAM” that is able to manage the risk associated to a specific lifeline and, with a
prioritization scheme, to allocate specific resource for the risk mitigation.
The methodology includes four main steps:
 Vulnerability analysis;
 Lifeline risk modelling
 Quantification of the consequences
 Risk managing and mitigation
Main objectives
The proposed methodology for the development of the software VULSIN is

composed by the following goals:
 Definition of the seismic hazard for a specific site;
 Definition of the vulnerability of a single structure and of the entire
network;
 Definition of the exposure;
 Definition of the seismic risk for the different limit states.
The project mainly deals with the following natural risks:

 Seismic risk
Analysed elements
 Infrastructures
The project mainly dealt with the identification of a tool to define the seismic risk
of infrastructures. The main objective of the project was then to “control” the risk
of the different exposure items. The user can apply different modifications to the
original properties of the network in order to identify their effect of the risk
prioritization. The mitigation measures can then be applied to the network
depending on their defined effects.
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Figure 13. Fragility curves for horizontal vessels under seismic event
6.1.5 PEC: Post-Emergency, multi-hazard health risk assessment in

Chemical disasters
Introduction
Post-Emergency, multi-hazard health risk assessment in Chemical disasters (PEC)

is a prevention and preparedness project funded by the Directorate-General
Humanitarian Aid and Civil Protection (DG ECHO) of the European Commission
aiming at developing and implementing an integrated model for rapid multi-hazard
health risk assessment applicable to chemical release incidents occurring during
major natural or man-made disasters. RINA consulting is involved in the project
together with other partners: Aristotle University of Thessaloniki (Coordinator),
Eucentre and TU Delft.
This project is not directly related to road network; nonetheless it is included in
this list because it is an ongoing European project that deals with multi hazard risk
assessment of urban areas.
Project description
The main problem targeted by PEC is the assessment of the impact on human
health due to exposure to chemical agents originating either from natural or
manmade disasters, such as earthquake, flood or terroristic attack affecting
chemical plant structures and infrastructures finally leading to accidental release
of large amounts of toxic chemicals into the environment.
The PEC method and tools will be applied on a case study area located in the
South-Eastern part of Sicily (Italy). Immediate and long-term population health
impacts of the toxic chemicals absorbed either individually or in combination will
be determined and quantified according to (i) characteristics (type and intensity)
of the initial disaster, (ii) degree of vulnerability of buildings and infrastructures,
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(iii) quantity of chemicals stored/handled in the plants, magnitude of their
dispersion into the environment and levels of chemical contamination in the
disaster area.
For each type of hazard considered in the project, its determinants will be
identified and estimated using statistical and physics-based models (for natural
events) and expert judgment including historical databases (for man-made
events). Risk evaluation of natural or man-made disasters will be carried out by
techniques of quantitative risk analysis coupling the probability of occurrence for
both initiative and intermediate events along the risk chain with quantitative
estimates of consequences.
Environmental contamination from toxic elements and population exposure will be
modeled through state-of-the-art atmospheric dispersion models coupled with an
enhanced multimedia model used for regulatory monitoring and compliance
purposes to derive concentration levels of toxicants in different environmental
media (i.e. surface and groundwater, soil and air) and the food web. Exposure will
be assessed by estimating the total daily intake of toxicants based on their
predicted environmental concentrations.
Figure 14. Fragility curves for horizontal vessels under seismic event
Main objectives
Expected results of the project include:

 in Task A: a well characterized model of hypothetical disaster in which the
cascade of events caused by triggering hazards (earthquake, floods, or a
terroristic attack) affecting two model chemical plants within the selected
study area will be assessed.
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 in Task B: fragility functions of different plant components; codes of the
case study buildings and non-structural components; the vulnerability of
components subjected to the effects of industrial accidents, and multi-
hazard contamination risk maps;
 in Task C results include data of concentration levels of chemicals and
realistic risk zone maps corresponding to defined thresholds in the area
surrounding the incident. From these data exposure profiles will be derived
by multimedia modeling which in turn will feed physiology-based
toxicokinetic (PBTK) models to estimate internal doses of chemicals in
target tissues;
 in Task D: an integrated health risk prioritization matrix will then be
developed based on the results obtained from Tasks A-C;
 in task E a series of guidelines based on cost/benefit analysis will be
generated addressing measures for risk mitigation of structures (buildings
and plants), mitigation of population exposure to the incident-related
chemicals, and mitigation/prevention of health risks.
 Seismic risk;
 flooding;
 terrorist attack, human errors, design errors.
Analysed elements
 tanks;
 horizontal and vertical vessels.
The project mainly dealt with the identification of a tool to define the natural and
antropic risk of urban environment. The main objective of the project was then to
“control” the risk of the different exposure items. The user can apply different
modifications to the original properties of the urban environment in order to
identify their effect of the risk prioritization.
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6.2 Construction and design projects
6.2.1 A4 HIGHWAY: UPGRADE TO THE THIRD LANE BETWEEN SENIGALLIA

AND ANCONA
Introduction
The A14 Bologna – Taranto freeway is undergoing extensive upgrade works.

SAMAC JV, the construction contractor, has appointed RINA Consulting as the
design consultant for the upgrade to the third lane of the motorway section
between Senigallia and Ancona Nord (length 20 km).
Project description
The project included the widening of two precast concrete viaducts and three steel
viaducts, the reconstruction of 30 underpasses and culverts, environmental
mitigation works, drainage and water treatment systems. Seismic analysis and
retrofit of existing reinforced concrete viaducts with the aim of the upgrading of
the carriageway. The seismic analyses were carried out with the particular issue of
structures with new parts connected to existing ones. The seismic vulnerability of
the existing viaducts was developed in both the original and in the new
configurations: the seismic vulnerability was investigated with the aid of non-
linear static analysis (pushover) in accordance with the Italian Technical Norms for
the construction.
The analyses shown that the original viaducts, built in the 70’s and designed
without consideration of seismic actions, were not able to carry the minimum
horizontal actions prescribed by the Italian law for highway bridges. A retrofit
project was hence deployed in order to adequate the structure to satisfy the
requirements of the seismic code. In particular the interventions included: seismic
transversal and longitudinal shear keys both in reinforced concrete and in made of
steel depending on the bridge typology, pier jacketing of the regions where the
plastic hinges are expected with a confinement of FRP materials.
In addition to the seismic retrofitting, the project also included interventions
aimed to the mitigation of the risk of landslides along the highway with the
inclusion of earth retaining walls made with large diameter piles. A monitoring
system was appointed to control and verify the efficiency of the risk mitigation
interventions.
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Figure 15. Upgrading of the Morignano Viaduct in the A14 Highway
Figure 16. Seismic shear keys and pier jacketing for the Morignano viaduct
Main objectives
The main outcomes of the project were:

 The upgrading to the third lane of the existing A14 highway with the
construction of new viaducts connected to the existing structures;
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 The reduction of the seismic risk of the highway and especially of the
viaducts;
 The reduction of the hydrological risk.
The project mainly dealt with the following natural risks:

 Seismic risk;
 flooding;
 landslides.
Analysed elements
 viaducts;
 slope stability for roads.
The project faced different difficulties mainly because of the properties of the
existing structures. The risk mitigation measures have to deal with the
construction schedule and in addition with the traffic management.
Many of the different retrofit activities were developed during the night hours or
under difficult condition because of the needed for the traffic management. The
main mitigation measures adopted were: geotechnical monitoring of the
landslides, seismic retrofit with r.c. shear keys and with FRP materials.
6.2.2 PISA AIRPORT: LIGHT PUBLIC TRANSPORT SYSTEM “people mover”
Introduction
The People Mover of Pisa is a light cable-towed driverless passenger’s transport

system connecting the airport terminal with the national rail station. RINA
Consulting was in charge of the design of the civil infrastructure, including
geotechnical and structural works related to three stations, the support structure
along the route (partly developed at grade and part on a viaduct), parking lot at
elevation and buildings housing ticket offices. Design of the track as well as the
rearrangement of interfered.
Project description
The People Mover/Pisa Mover connects Pisa’s Galileo Galilei international airport
with the main train station in Pisa, called Pisa Centrale, which then makes it easy
for anyone to move about the rest of Tuscany, including getting to Florence.
The new train shuttle includes a mid-way stop at a new, 1.400 space parking lot
on the Via Aurelia to encourage local residents as well as day visitors to park
outside of the city and take the train shuttle into town.
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The project included a reinforced concrete viaduct that overpasses the urban road
near Pisa, a footbridge that overpasses the existing rail track of the nation rail
station and different intervention for the mitigation of the hydraulic risk, since the
project area is located in a flooding zone. The project also included the upgrading
of the urban circulation near the rail station, a new car park for the
interconnection of the passengers to the town.
RINA Consulting was responsible for the geotechnical design, structural design,
road and rail design of the circulation system. RINA Consulting was also
responsible for the design of the intervention for the mitigation of the hydraulic
risk within the town of Pisa.
The design activities also included the development of the study for the
verification of the structures under fire conditions.
Figure 17. Flooding area for the return period T=200 yrs (left) and map of the
interventions for the risk mitigation
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Figure 18. R.c. viaduct for the new People Mover
Figure 19. The steel footbridge for the new People Mover
Main objectives

 The seismic design of a r.c. viaduct and a steel footbridge;
 The design of the intervention for the mitigation of the hydraulic risk;
 The design of the rail track or the new People Mover.

 Seismic risk;
 flooding;
 fire.
Analysed elements
 viaducts;
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 slope stability for roads.
The project faced different difficulties mainly because of the site conditions and
because of the interferences with existing structures.
The main mitigation measures adopted were: geotechnical and structural
monitoring. Special measures for the mitigation of the flooding risk in the site
were adopted in particular with regard to the system of precast culverts used to
collect the rainwater. A completely new water drainage system was adopted in the
site.
6.2.3 TEMPA ROSSA: OIL TANK AREA STABILITY
Introduction
Tempa Rossa is an oilfield located high in the Sauro valley, in the heart of the
region of Basilicata, in southern Italy. The projects primarily extends over the
region in the Municipality of Corleto Perticara (PZ), 4 km away from where the
future processing centre is to be built. 5 wells have already been drilled in the
region of the Municipality of Corleto Perticara, while the sixth well is located in the
Municipality of Gorgoglione. The area where the LPG is to be stored is located in
the Municipality of Guardia Perticara.
RINA Consulting was appointed to define the solutions needed to mitigate the
landslide risk. RINA Consulting is also following the construction supervision.
Project description
The project includes the following activities:

 Site preparation works for the Tempa Rossa Oil Center, devoted to oil
extraction, consisting of excavation, earthworks and enbankments on
which the industrial plant has been built, including construction of internal
roads and water collection systems, improvement of natural streams and
stabilization of slopes;
 Construction of the access road to the center and of the circular road
(11km), including environmental mitigation and hydraulic works and its
maintenance;
 Site preparation of LPG storage tanks;
 Preparation of the storage sites for excavated material.
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Figure 20. Simulation of the slope stability (left) and proposed solution for the mitigation
of the landslides risk
Figure 21. Simulation of the hydraulic profile (left) and drainage basin (right)
Main objectives

 The mitigation of the landslide risk in a high seismic area
(geotechnical/structural and hydraulic works);
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 The design of the road network for the oil tank area that matches that
outcomes of the slope stability analysis.

 Seismic risk;
 Landslides.
Analysed elements
 Roads stability;
 Slope stability;
 Monitoring system.
The project faced different difficulties mainly because of the site conditions and
because of the construction schedule of the different activities.
The main mitigation measures adopted were: geotechnical and structural
monitoring, new drainage system and civil works for the slope stability.
Among the different civil works planned to improve the stability of the different
slopes, different flexible earth retaining walls were adopted including: piling walls
with anchors, caissons and sheet piles with anchors.
6.2.4 HIGHWAY “RONDA DE LA BAHÍA DE SANTANDER. SECTION:

PARBAYÓN – CACICEDO”
Introduction
This Project is characterized by the participation of Louis Berger both in the

Project Design and Technical Assistance to the Project Management during the
Construction phase. This aspect is vital since it has made possible the risks
foreseen in the design phase and its evolution in the construction phase.
Moreover, it has been possible to verify the feasibility of the control and mitigation
measures designed.
Project description
This Project consists on the definition at As Built level the “Ronda de la Bahía de
Santander. Tramo Parbayón-Cacicedo” highway, being its main function to serve
as an alternative to the road N-635, where they converge large distance journeys
and traffic with Santander as destination, being a bypass to the area of Santander
Bay.
Specifically, this is a 6 km long section with three links, a 685 and 630 m long
bitube tunnel in the “Alto de la Morcilla”, a cut and cover tunnel of 240 m at
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Piedras Blancas, as well as ten structures (two viaducts and overpasses and
underpasses).
Main objectives
The technical risks explained above entail a financial and social risk because of the
implications in the cost of the tunnel or in the affection to third parties, so
foreseeing the possible risks and monitoring and controlling the construction
phase is important in order to mitigate these risks.
Due to its geotechnical conditions and to the existing buildings in the upper part of
the Alto de la Morcilla tunnel and the hillside of the South outlet, as well as the
crossing of the road CN-623 on it, this tunnel is considered as the element with
the most potential risk of this project. This risk is linked to the ground, which
always implies a high rate of uncertainty in design phases of an infrastructure,
even more if there is a tunnel, because the knowledge of the characteristics is
initially limited to the surveys during the geotechnical campaign and it evolves
during the construction phase as the ground is drilled, with the diary analysis the
excavation front.
This technical risks entails a financial and social risk because of the implications in
the cost of the tunnel or in the affection to third parties. Consequently, the
monitoring and control of this infrastructures during the construction phase is
important in order to mitigate these risks.
Analysed elements
In order to achieve the objectives, the geotechnical conditions will be analysed

and the existing buildings will be monitored.
Eight geotechnical surveys, five trial pits and ten seismic profiles were carried out,
in addition to having information of three surveys of the previous Informative
Study.
In order to avoid potential instabilities in the tunnel and the surroundings (Figure
22), where there are buildings and other communication ways, specific measures
and eventual special treatments were designed to be applied on site according to
the tunnel monitoring, such as reinforcements by gunite and bolts, micropile
umbrellas, removal of slide ground or residual ground, drainage systems or the
definition of excavation procedures and specific slopes. An economic estimation of
these measures were included in the project.
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Figure 22. Tunnels entry
Moreover, it was planned to control specially the possible movements of the most
sensible elements, as buildings or slopes, in the construction phase, enabling us
making instant decisions, applying the necessary mitigation measures.
The excavation of the tunnels was done by mechanical means in order to avoid
the risks of blasting (blast wave, vibrations, affections, etc.), taking into account
the proximity of the buildings. The control of these buildings was carried out
according to the Tunnel Monitoring and Auscultation Plan: there were placed
gauges in order to control the movements of the buildings and act if necessary, as
it was foreseen in the Project Design phase.
Furthermore, due to the instabilities caused by the excavation of the Southern
outlet, it was necessary to build a pile wall in the right slope to protect the nearby
buildings (Figure 23), situated on the top of the slope. This wall was monitored
and controlled in order to act against potential movements and control that these
movements were kept within the expected safety tolerances.
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Figure 23. Wall in the right slope
Regarding to the expected risk concerning to the road CN-623, during the
execution of the Northern outlet, in order to protect and improve the slopes with
previous landslides that affected to the slope of the road, it was decided to
lengthen the outlet in cut and cover tunnel, increasing considerably its length.
Finally, during the construction of the tunnel, it was produced a landslide in the
left slope of the Southern end, which was in the phase stabilization. Consequently,
it was repaired by collocating riprap and driving rails in order to ensure the
stability of the ground.
6.2.5 RAILWAY LEÓN – ASTURIAS
Introduction
In this Project Louis Berger has participated as Technical Assistance to the Project
Management during the Construction phase, monitoring one of the most
important railway works in Spain, where the particular orography and geology
resulted in modifications of the original project. Consequently, it has been possible
to verify the viability of the designed control and mitigation measures regarding to
the instabilities during the construction phase of the tunnels.
Project description
This project consists on the definition at As Built level the “Plataforma de la Línea
de Alta Velocidad León-Asturias. Tramo: Campomanes-Pola de Lena” railway,
being its main function to serve as an alternative to the current railway of León-
Gijón of Iberian width with double electrified way. This section is part of the high-
speed rail link between León and Asturias.
Specifically, this railway runs in a South-North direction along the left side of the
Lena River between Campomanes and Pola de Lena. The trace consists on the
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tunnel of Vega de Ciego of 2.5 km long, the viaduct of Foraca of 70 m long, the
tunnel of Pico de Siero of 1.6 km long and the last section which finishes with the
viaduct of Pola de Lena of 130 m long, being the north support near to the entry
to the Pola de Lena station.
Main objectives
The main objective is to avoid the possible affection to the buildings because of
the existing landslide, minimizing both the economic and social negative impacts.
Due to its geotechnical conditions and the existent buildings in the intermediate
zone of the tunnel of Vega de Ciego, and the hillside of the South outlet of the
tunnel of Pico de Siero, where an important landslide that affects to the buildings
of Mamorana has been defined, these points are considered as the risk element of
the project. The risks are directly linked to the ground, which always implies a
high rate of uncertainty in the design phases of an infrastructure, because the
knowledge of the characteristics is limited initially to the developed research
during the geotechnical campaign and it evolves during the construction phase as
the ground is drilled, with the daily analysis of the excavation front.
This technical risks entails a financial and social risk because of the implications in
the costs or in the affection to third parties. Consequently, the monitoring and
control of this infrastructures during the construction phase in order to mitigate
these risks is essential.
Analysed elements
In order to achieve the objectives, the geotechnical conditions will be analysed

and the existing buildings will be monitored.
Ten geotechnical surveys, several geomechanical stations and ten seismic profiles
were carried out, in addition to having information of thirteen surveys and fifteen
seismic profiles from the previous Informative Study.
In order to avoid potential instabilities in the tunnel and the surroundings, where
there are buildings and other communication ways, specific measures and
eventual special treatments were designed in order to apply on site according to
the tunnel monitoring, such as reinforced by gunite and bolts, removal of slide
ground or residual ground, drainage systems or the definition of excavation
procedures and specific slopes, as well as stabilization measures as pile walls for
the excavation of the south outlet of the tunnel of Pico de Siero. At the design
phase no special problems were expected when excavating of the tunnel of Vega
de Ciego in the section under the buildings of Ronzón.
75
Moreover, it was expected to control specially the possible movements of the most
sensible elements, as buildings or slopes, at construction phase, enabling us
making instant decisions, applying the necessary complementary mitigation
measures.
When the excavation of the tunnel of Vega de Ciego (Figure 24) was done, by
mechanical means in order to avoid risks derived of blasting (blast wave,
vibrations, affections, etc.), taking into account the proximity of the buildings,
there appeared some problems because the characteristics of the ground were
worse than the expected ones.
Figure 24. Tunnel of Vega de Ciego
Consequently, the ground surface collapsed and the section of the tunnel was
deformed. The control of these buildings was done according to the Monitoring and
Auscultation Plan: gauges were placed in order to control the movements of the
buildings and act if necessary, as planned in Project Design phase. Moreover, a
micropile wall for protection was constructed, and the tunnel section was
reinforced by micropile anchors and heavier supports than the estimated initially,
and the monitoring was increased both inside and outside the tunnel.
Concerning to the tunnel of Pico de Siero (Figure 25), a Paleolithic slab was
reactivated at south outlet during the excavation, affecting the existing buildings,
so it was decided to stabilize it by restoring and reinforcing the original hillside,
refilling the excavated cutting for the outlet by soil cement, constructing two new
pile walls on both sides of the excavated cutting, and advancing the initial
excavation PK, with reinforced supports by micropiles and inverted arch.
76
Figure 25. Tunnel of Pico de Siero and surroundings
An anchored micropile wall was constructed in the surroundings of the buildings,

and the closest building to the tunnel was evacuated. Moreover, the monitoring
was increased inside and outside the tunnel, using the mitigation complementary
measures if necessary.
6.2.6 HIGHWAY CANTABRIA – MESETA. N-611 PALENCIA - SANTANDER.

P.K. 161 -149. SECTION: MOLLEDO – PESQUERA
Introduction
Louis Berger developed the Technical Project and the environmental studies and
procedures that allowed the construction of the most complex section of the A-67
Highway, which connects Santander and Palencia, in a rugged terrain with the
presence of important landscape, ecological and cultural conditions.
The high environmental sensitivity of the territory, crossed by the highway, and
the technical complexity of the project caused environmental risks, which were
solved at the different phases of the project in order to achieve the environmental
viability of the project and obtain the approval for the construction.
This project was developed by Louis Berger in all of its phases, from initial phases
of Informative Study to the As Built Project, as well as the Technical Assistance to
the Project Management during the Construction phase.
Project description
This project completes the cantabrian part of the highway in order to connect
Cantabria with the central and southern area of the country, and especially with
the Spanish capital.
The highway´s layout is characterized by its 12 kilometers in length crossing a
total drop of approximately 475 m, as shows the Figure 26.
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Figure 26. Longitudinal profile of the layout
The project includes five viaducts, being one of them the Montabliz bridge (the
highest bridge in Spain, Figure 27), and a 1,400 m long tunnel, shown above.
Figure 27. Montabliz bridge
Main objectives
The main objective is to minimize the environmental negative impact, in order to

protect the existing environmental and cultural values.
78
The environmental management of this project was especially complex due to the
orography of the land and the environment, landscape and cultural elements that
could be affected by the project:
 The Besaya River and its tributaries, courses with high quality water, form
a narrow and deep valley surrounded by strong slopes.
 The oak forest of Montabliz of high ecological value.
 Archaeological sites and a Roman road.
Analysed elements
In order to achieve the objectives, there were studied different layouts to select
the most conservative one regarding to the forest and the archaeological site.
During the project design, the most conservative layout was studied and selected
in relation to the existing environmental and cultural values.
In order to avoid any damage to the Montabliz forest and to the archaeological
site, and to minimize the landscape impact, an exceptional bridge of more than
700 meters in length was designed, which was supported by only four piles.
The location of the piles was also conditioned by the presence of an archaeological
site.
On the other hand, after the Montabliz bridge (Figure 28), a 1,400-meter-long
tunnel was built under the Roman roadway, avoiding its affection.
Figure 28. Montabliz bridge (2)
79
The archaeological site (Figure 29) is shown below:
Figure 29. Archaeological site
The tunnel of Somaconcha was excavated exclusively from its south end in order
to avoid the affection to the forest of Montabliz. Furthermore, the tunnel was
slightly extended at construction phase because a new archaeological site was
found.
Moreover, the construction of the viaducts was accomplished by environmental
respectful systems, pouring concrete in the bridge and advancing in cantilever.
On the other hand, during the construction process environmental authorizations
were requested for all necessary workplaces, such as sorting plants for
aggregates, concrete and asphalt agglomerate, work access roads and landfills.
In addition, sewage treatment systems were installed for generated wastewaters
during the excavation of the tunnel or concrete manufacturing plants, and dilution
ponds were set up to collect potential discharges.
6.2.7 PENDUELES-LLANES HIGHWAY ROAD. ASTURIAS (SPAIN)
Introduction
This study is characterized by the participation of Louis Berger in all phases of the
work. The project was written by Louis Berger taking into account the important
geological-geotechnical and hydrogeological factors, since it develops in limestone
terrain with phenomena of karstification and dissolution of carbonate rocks, which
cause cavities and typical morphologies in karst terrains.
80
Louis Berger participated in the Technical Assistance Phase to the Project
Management during the Construction phase. This participation consisted on an
adequate control of the earthworks to be carried out in karstic terrain, from the
geological, hydrogeological and environmental points of view. As technical
assistance, it has been possible to verify the feasibility of the construction
measures designed to undertake the construction of embankments on the
complex terrains affected by karstification.
Project description
The Project forms part of the Cantabrico Highway in The Principality of Asturias, in
the north of Spain. The climate is humid and rainy, being the cause of important
water courses that have gradually shaped the terrain, causing a relive of smooth
orography (Figure 30).
Figure 30. Orography of the site
The platform is developed mainly on embankment on limestone-type carbonate

rocks, mainly modeled by the phenomena of dissolution (or karstification). This
modeling also affects deeply with caves and cavities causing surface subsidence
and collapse.
The general layout presents an East-West direction, parallel to the coastal edge, at
a distance of 600 to 1500 from the sea's edge.
Main objectives
The main objective is to minimize the risks associated to the sinkholes, which
could involve a geotechnical risk and may cause negative impacts on the aquifers.
The trace is developed on fine-grained limestone with a high content of calcite-

type minerals, affected by an important fracturing that causes rainwater to
penetrate through cracks and porosities and forms caves and voids, as well as
depressed forms of circular plant. These forms are called "sinkholes", and there is
where the most complex embankments of the work are founded. These depressed
areas or sinkholes are also connected with complex systems of caves and cavities,
81
being therefore the greater risk both from the geotechnical and from the
environmental point of view, since they are very sensitive aquifers concerning to
the contamination by entrance of surface water.
Analysed elements
In order to achieve the objectives, there were studied different layouts in order to
select the most conservative one regarding to the forest and the archaeological
site.
During the drafting phase of the project, thorough field surveys were carried out
mainly including:
 Development of geological map with indication of all manifestations of karst
depression, caves or upwellings of water, etc.
 Bore Holes.
 Geophysical research.
A very permeable and resistant earthen base filler was defined as capable of
supporting the flow of water without causing problems in the embankment of the
highway.
At technical support, the bottoms of these depressions were also checked once the
vegetal cover and clay soils were removed, by means of direct observation, at
critical points in which the deep cavities are connected with the surface. The
embankments of the road were built on karstic terrain, developed in carboniferous
limestone with numerous fissures and dissolved cavities (Figure 31).
Figure 31. Observed terrain
Several old sinkholes and small cavities were detected by the geological study.
Both situations are very dangerous in the road construction, so complex
constructive solutions are needed. In the Figure 32 the geological map is shown.
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Figure 32. Geological map
In limestone rocks with cavities, the bearing capacity is low and cavities can
collapse. In addition, these areas constitute a direct entry of water to aquifers that
should not be slowed down.
The mainly soil treatments consisted on the excavation of soft argillaceous soil at
the bottom of the karst sinkhole. When the rock is exposed, a rock fill is made
with big rock fragments (bigger than 1 m). This rockery level formed a resistant
foundation to the embankment. The water has not influence over this resistance
rock fragments, and can flow over the road without erosion of the embankment.
Between the filling of the sinkhole and the embankment, a rock fill is applied and
protected by a geotextile. This geotextile avoids the aquifer contamination and
increase the stability of the embankment foundation. The sinkhole treatment used
in the Pendueles Llanes embankments construction is shown in the Figure 33.
Figure 33. Used sinkhole treatment
The treatment of sinkholes in karst areas improves the road safety and reduces
the contamination of groundwater resources.
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6.2.8 “LA REGENTA” BRIDGE DESIGN PROJECT
Introduction
“Pintor Fierros-La Regenta” Bridge Design Project for the A-8 road, Km452, 382m
long. Originally, design for 1+1 lane solution as demand required, but based on
the risk assessment design and built with the foundations and structure to
withstand the later upgrade to 2+2 lane solution. The upgrade was carried out 18
years later with significant cost savings, proving the risk assessment to be
efficient.
Project description
The La Regenta bridge, is part of the Cantabrian highway, was built in the 1990s
when traffic demand could be met with a single traffic lane in each direction, but
high traffic growth was forecast. The option to build a two lane bridge for the
future requirements cost far more than building the one lane bridge required at
the time, however upgrading a bridge is also complicated and costly.
Main objectives
The main objective is to reduce the impact of a future traffic demand and the
consequent costs, considering the traffic growth.
The bridge was built for low demand but the design made provision for upgrading
to widen the road deck. This happened in 2008.
Uncertainty about the future presents a difficulty for decision making in long-
lasting infrastructure projects. If the future could be predicted, efficient decisions
could be made with confidence. Because the future cannot be predicted there is a
risk that even well-intentioned decisions will turn out to be inefficient and wasteful
of resources. The methodology applied on the design of the “La Regenta” bridge
took into account that growth of traffic is rapid, and that the risk of requiring a
future capacity upgrade required strong mitigation measures.
This engineering design example shows that we do not have to choose between
permanent (long lasting) and short-life infrastructure solutions. It is possible to
build durable infrastructure that can still accommodate uncertain future
modifications and therefore adapt to the demand forecasts risks. Infrastructure
strategies based on this observation can be called flexible or responsive
strategies.
It is difficult to demonstrate the effectiveness of flexible or risk based strategies
because they incur known present costs which have to be balanced against
uncertain future benefits. An important point is that option value increases with
84
greater uncertainty; options would be of no interest if the future could be
predicted with certainty.
In the Figure 34, the bridge is shown during the upgrading project. (Engineers for
original design and upgrade: Louis Berger, APIA XXI).
Figure 34. Upgrading of the bridge
Analysed elements
In order to achieve the objectives, there were analysed the traffic growth and a
design according to this growth, reducing the mentioned future impacts.
The mitigation measures included the design of the infrastructure foundations,

abutment and piles, dimensioned for the two lane solution, while a having a
superstructure of only one lane per direction. By building the bridge infrastructure
with some initial overcapacity, the owners acquire the option to upgrade at a later
date. The option is exercised if required by future conditions, at a much lower cost
than building new infrastructure; otherwise it is left unexercised. The cost of the
option is easily established because it is the extra construction cost compared to a
strategy without the mitigation measure.
The upgrading construction project happened eighteen years later, in 2008. The
technique designed to perform the upgrade was foreseen by the same engineers
that planned the mitigation measures. The overall cost proved the risk
management to be cost effective in several ways: economically the upgrade costs
and the initial mitigation measures were much lower compared to the alternatives;
functionally the loss of service was also reduced, and the overall cost-benefit
analysis was positive.
85
6.3 Conclusion
The following Tables summarise the main risks faced and the main elements
examined for each analysed project.
In particular, Table 5 and Table 6 rifer to the projects developed by D’APPOLONIA.
Seismic Flooding Hurricanes Anthropic Landslide Fire

SINER-G 
Research
HAZUS   
projects
STRIT   
RESIS 
PEC   
A4
Design construction
  
HIGHWAY
PISA
projects
PEOPLE   
MOVER
TEMPA
ROSSA OIL  
TANK AREA
Table 5. Summary of the main risks faced
Infrastructures Buildings Urban areas

SINER-G   
HAZUS 
Research
 
projects
STRIT   
RESIS 
PEC 
A4
Design construction

HIGHWAY
PISA 
projects
PEOPLE  
MOVER
TEMPA
ROSSA OIL 
TANK AREA
Table 6. Summary of the elements examined
As tables show, the seismic risk is addressed in all the construction and research
projects. Among the different other natural hazards, the flooding was also
included in several projects. As far as the connection of different sources of
86
hazards is concerned, the PEC project is the study in which a framework for the
multi-hazard risk assessment is treated. Among the different research projects,
the risk is mainly treated with the definition of “fragility curves” either defined
from bibliography or defined within the project itself. RESIS is the project in which
a tentative framework for the seismic risk assessment of the infrastructure
network is defined: in this project the risk is considered not only with respect to
the single bridge or structure but with respect to the entire network. In the
construction projects the analysis mainly addressed the natural hazards. The
control and mitigation measures mainly consider the use of new technologies,
such as FRP materials. Structural and geotechnical monitoring is also applied for
the control of the slope stability.
The next tables (Table 7 and Table 8) rifer to the projects run by Louis Berger.
Seismic Flooding Hurricanes Anthropic Landslide Fire

PARBAYÓN-
CACICEDO    
HIGHWAY
LEÓN-
Design construction
ASTURIAS    
RAILWAY
projects
CANTABRIA-
MESETA  
HIGHWAY
PENDUELES-
LLANES   
HIGHWAY
LA REGENTA
    
BRIDGE
Table 7. Summary of the main risks faced
Urban
Economic Infrastructures Buildings Environment
areas
PARBAYÓN-
CACICEDO     
HIGHWAY
Design construction
LEÓN-
ASTURIAS     
projects
RAILWAY
CANTABRIA
-MESETA   
HIGHWAY
PENDUELES
-LLANES   
HIGHWAY
87
LA
REGENTA   
BRIDGE
Table 8. Summary of the main elements examined
Although analyzing risks associated with the infrastructure from design phase, the
knowledge of the ground characteristics is completed by the daily monitoring of
tunnels. For this reason, an estimation of risks and possible mitigation measures is
done in the phase of design, based on available data from the trials. This fact
entails a technical risk, so consequently it requires the verification of calculation
once the construction has begun, based on the parameters known at workplace, in
order to correct possible deviations from the proposed solution at project phase,
and the necessity of implementing a tunnel construction monitoring plan.
Therefore, with the uncertainty as an inherent characteristic of the works with
geotechnical nature, the adequacy of the solution at construction phase implies a
possible deviation in costs and deadlines.
In the case of Alto de la Morcilla tunnel, it was necessary to increase the length of
the outlet, increasing the costs, and due to the landslides that occurred, they were
stabilized by collocating riprap and driving rails.
In the cases of the tunnels of the Railway León-Asturias, it was necessary to
increase the length of the outlet, increasing the costs, and due to the landslides
occurred, they were stabilized by constructing pile walls, micropiles, anchors and
collocating riprap.
Regarding to the problems related to the buildings, the construction was done in a
way the associated social risk was minimized, guaranteeing at all times the
integrity of the buildings by implementing a Monitoring and Auscultation Plan, and,
consequently, the costs associated to the mitigation of the caused damages were
avoided.
In the case of Pendueles-Llanes Highway, at zones of limestone with humid
climatology and great rains karstification phenomena develops with the formation
of caves and sinkholes. These sinkholes constitute constructively complex areas
and may present high geotechnical risk without a properly actuation.
Consequently, the treatment of sinkholes in karst areas improve the road safety
and reduces contamination of groundwater resources.
In this case, by the experience of LB at karstic ground difficulties, it was written a
project as accurate as possible concerning to the level of knowledge of the
ground. With the exhaustive control of the excavation and foundation works this
knowledge was improved.
Subsequent to the completion of the works and before being put into service, the
visual, topographic and instrumental exhaustive control of the embankments on
karstic terrain was completed, in order to verify that the constructive conditions
were totally secure and that the design and execution of the solutions of the
embankments were suitable.
88
As a result, the complex work has been in operation for more than 4 years without
any incidence of instability related to the earthworks carried out on karstified
limestones.
In conclusion, it is essential to carry out an analysis of the risks associated with
the infrastructure from the project design phase, and in infrastructures where the
ground is an important element, to continue with the analysis at next phases of
life cycle (construction, maintenance…) at technical, economic and social levels.
Therefore, the implementation of a Monitoring and Auscultation Plan and the
definition at all times of the prevention and mitigation measures is essential, in
order to foresee and minimize the problems, and consequently, the technical,
economic and social costs.
On the other hand, the Molledo – Pesquera Highway was an especially complex
project from the technical and environmental point of view, which led to detailed
environmental studies, entailing the definition of the optimal route. In addition, it
was necessary the design of several prevention and mitigation measures in order
to minimize the environmental impacts.
In this context, the correct and efficient execution of the different construction
processes, the environmental integration of the work and the minimization of the
impact have been of great importance for the environmental approval of the
project.
With regards to the “Pintor Fierros-La Regenta” Bridge Design Project, the initial
risk assessment performed at the design phase helped increasing the long term
cost-benefit result by designing a mitigation measure that allowed the bridge
upgrade when the uncertain traffic growth demanded.
89
7 Assessment of financial and economic aspects related to risk
7.1 Introduction
The development of an economic and financial analysis is needed to properly

evaluate the economic convenience and financial sustainability of large
infrastructure projects. This specific section introduces the methodology which will
be carried out in Work Package 3 to perform the financial analysis of a transport
infrastructure project. Moreover, given the wide amount of financial transactions
involved during the whole transport infrastructure life-cycle, financial risks may
have a relevant impact on the project and may even compromise the entire
project financial sustainability. For that reason, this section underlines the
methodology approach to the Cost-Benefit Analysis (CBA) and the main financial
risks which will be considered within the risk assessment approach proposed in
WP3, where CBA will be implemented as part of the Advanced Asset Integrity
Management (AAIM) solution of RAGTIME in order to compare maintenance
strategy scenarios and loss scenarios. Then, a brief description of the main
financial risks which will be taken into account is also provided.
7.2 Methodology
The methodology approach proposed for project appraisal will be structured in the
following five steps:
 Context analysis and project objectives;

 Project identification;
 Feasibility & Option analysis;
 Financial analysis (Private point of view);
 Economic analysis (Social point of view).
Each section below will take on a strictly operational perspective and each issue
will be reviewed both from the standpoint of the investment.
The financial analysis is a necessary step required to assess feasibility of the

project. Before analysing the social benefits and costs it is important to
understand if the project will be profitable without the public support. The financial
analysis will be done on the direct revenue and direct cost and the debts
coverage.
90
7.2.1 Context analysis and project objectives
The Context analysis and project objectives should be divided in the following
macro area:
 Socio-economic context;
 Definition of project objectives.
The first stage of the project appraisal aims to understand the social, economic
and context in which the project will be implemented. In fact, the possibility of
achieving credible forecasts of benefits and costs often relies on the accuracy in
the assessment of the macro-economic and social conditions.
After the definition of the socio economic contest it is important have a clear
statement of the project’s objectives, essential step in order to understand if the
investment has value. The broad question any investment appraisal should
answer is “what are the net benefits that can be attained by the project in its
socio-economic environment?”. The benefits considered should not be just
physical indicators but socio-economic variables that are quantitatively
measurable. The project objectives should be logically linked to the investment.
While a clear statement of the socio-economic objectives is necessary to forecast
the impact of the project, it may often be difficult to envisage all the impacts of a
given project.
7.2.2 Project identification
A project can be defined as an operation comprising a series of works, activities or

services intended to accomplish an indivisible task of a precise economic or
technical nature; one which has well defined goals.
A project is clearly identified when:

 the object is a self-sufficient unit of analysis (‘half a bridge’ is not a
project);
 indirect and network effects are taken into account adequately.
 a proper social perspective has been adopted in terms of relevant
stakeholders considered (‘who has standing?’).
The appraisal needs to focus on the whole project as a self-sufficient unit of
analysis and not on fragments or sections of it.
91
Sn
S1
Innovated Si
system
S2 S4
S3
After having identified the project, the boundaries of the analysis should be
defined. The project has a direct impact on users, workers, investors, suppliers,
etc. but also indirect impacts on third parties. The risk of double counting project
benefits should be carefully considered.
7.2.3 Feasibility and option analysis
The basic approach of any investment appraisal aims to compare the situations
with and without the project. To select the best option, it is helpful to describe a
baseline scenario. This will usually be a forecast of the future without the project,
i.e. the ‘business as usual’ (BAU) forecast.
This is also sometimes labelled the ‘do-nothing’ scenario, a term that does not
mean that operations of an existing service will be stopped, but simply that they
will go on without additional capital expenditures.
A project is feasible when its design meets technical, legal, financial and other
constraints relevant to the specific site. Feasibility is a general requirement for any
project and should be assessed carefully. Moreover, as mentioned, several project
options may be feasible.
Typical feasibility reports should include information on:
 demand analysis2;
 available technology;
 the production plan (including the utilisation rate of the system );
 personnel requirements;
 the project’s scale, location, physical inputs, timing and implementation,
phases of expansion and financial planning;
 environmental aspects/impact.
2
The demand analysis will be carried out as function on the context of application.
92
7.2.4 Financial analysis (private point of view)
As set out in the new guide to Cost Benefit Analysis published by the EU
Commission on the 19th of December 2014, a financial analysis is necessary when
approaching transport infrastructure projects in order to:
 evaluate the project profitability;

 verify the project financial sustainability;
 outline the cash flows which can support the calculation of the
socio-economic costs and benefits assigned to the project during the whole
project life-cycle.
The financial analysis will underline the financial flows of the investment, broken
down by (Figure 35):
 total investment costs;

 operating&maintenance costs and revenues;
 sources of financing;
 financial return on investment cost: FNPV and FRR;
 cash flow analysis for financial sustainability.
Total Operating Cost and

Total Investment Costs Source of financing
revenues
NPV Financial sustainability
Figure 35. Structure of financial analysis
The main purpose of the financial analysis is to use the project’s cash flow
forecasts in order to calculate suitable return rates, specifically the financial
internal rate of return (FRR) (on investment and own capital) and the
corresponding financial net present value (FNPV). The number of years for which
project cash-flow forecasts are provided should correspond to the infrastructure
life-cycle. This time is considered in coherence to the period of reference proposed
by the Commission which refers to a standard benchmark, and which is
differentiated by sector and based on internationally accepted practice (Table 9).
In the case of unusually long construction periods, longer values can be adopted.
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Sector Reference period(years)
Railways 30
Roads 25-30
Ports and airports 25
Urban transport 25-30
Table 9. Reference periods
The project financial sustainability occurs if the cumulated generated cash flow is
positive for all the years considered. More in details, the difference between
inflows (sources of financing, operating revenues,..) and outflows (initial
investment, operating costs, taxes,..) will be considered in order to underline
deficit or surplus that will be accumulated each year.
It is important to ensure that the project does not risk suffering from a lack of
capital. For that reason it is essential to consider the risks associated to the
possibility of key factors in the financial analysis being worse than expected. At
this aim, financial risks will be take into consideration into the RAGTIME risk
assessment approach and in the operational risk strategy proposed in WP3.
The following table resumes a possible schematic balance sheet for the “safety
measurements” that will be examined.
Total investment costs

Buildings/network -
Equipment -
Extraordinary Maintenance -
Licences -
Patents -
Other pre-operation expenses -
Total operating costs
Raw materials -
Labour -
Electric power -
Maintenance -
Administrative costs -
Interest -
Loans reimbursement -
Taxes -
Total operating revenues
Output X +
Output Y +
Table 10. Financial analysis at a glance
94
Investment cost
The first logical step in the financial analysis is the estimation of how large the
total investment cost will be. The investment outlays can be planned for several
initial years and some non-routine maintenance or replacement costs in more
distant years. Thus we need to define a time horizon.
By time horizon, we mean the maximum number of years for which forecasts are
provided. Forecasts regarding the future of the project should be formulated for a
period appropriate to its economically useful life and long enough to encompass its
likely mid-to-long term impact (see Table 9).
Operating costs
The operating costs comprise all the data on the disbursements foreseen for the
purchase of goods and services, which are not of an investment nature since they
are consumed within each accounting period.
The data can be organised in a table that includes:
 the direct production costs (consumption of materials and services,

personnel, maintenance, general production costs);
 administrative and general expenditures;
 sales and distribution expenditures.
These components together comprise the operating costs.
Revenues
The revenue will be determined by the forecasts of the quantities of services

provided and their prices.
The following items will not be included in the calculation of future revenues:
 transfers or subsidies;
 VAT or other indirect taxes charged by the firm to the consumer, because
these are normally paid back to the fiscal administration.
7.2.5 Economic analysis (Social point of view)
The economic analysis besides taking in account the Investment cost, revenues
and Operating cost defined in the previously paragraph, it will evaluate the non-
market impacts, the indirect costs and the benefits.
95
The economic analysis will appraise the project’s contribution to the economic
welfare. The key concept is the use of accounting shadow prices, based on the
social opportunity cost, instead of observed distorted prices.
Observed prices of inputs and outputs may not reflect their social value (i.e. their
social opportunity cost) because some markets are socially inefficient or do not
exist at all.
The methodology is summarised in the following steps:
 monetisation of non-market impacts;

 inclusion of additional indirect effects (if relevant);
 discounting of the estimated costs and benefits;
 calculation of the economic performance indicators (economic net present
value, economic rate of return and B/C ratio).
Monetisation of non-market impacts
The first step of analysis is to include in the appraisal those project impacts that
are relevant for society, but for which a market value is not available.
The CBA should check that these effects (either positive or negative) have been
identified, quantified, and given a realistic monetary value.
Appropriate conversion factors applied to the financial values of the operating

revenues should already capture the most relevant non-market benefits a project
may generate. However, if conversion factors have not been estimated or the
project is non-revenue generating, alternative approaches can be used to assess
non-market benefits. The most frequently used method is the willingness-to-pay
(WTP) approach, which allows the estimation of a money value through users’
revealed preferences or stated preferences. In other words, users’ preferences can
be observed either indirectly, by observing consumers’ behaviour in a similar
market or directly, by administering ad hoc questionnaires (but this is often less
reliable). For the evaluation of some outputs, when the WTP approach is not
possible or relevant, long-run marginal cost LRMC) can be the default accounting
rule. Usually WTP is higher than LRMC in empirical estimates, and sometimes an
average of the two is appropriate.
Furthermore, in function of the benefit to monetise it will be taken into account

the possibility of using the values determined by the insurance companies. The
insurance companies estimate the values do not habitually monetised from usual
market, for example the value of a human.
96
Inclusion of indirect effects
Indirect effects are defined as quantity or price changes occurring in secondary

markets. To better understand whether indirect effects can be ignored or not
when conducting a CBA, it is important to distinguish between efficient and
distorted secondary markets. A distorted secondary market is a market in which
prices do not equal social marginal opportunity costs. The existence of monopoly
power is the main cause of distortion of a market.
Discounting of the estimated costs and benefits
Costs and benefits occurring at different times must be discounted. The discount
rate in the economic analysis of investment projects - the discount rate reflects
the social view on how future benefits and costs should be valued against present
ones. It may differ from the financial discount rate when the capital market is
inefficient (for example when there is credit rationing, asymmetric information and
myopia of savers and investors, etc.).
Calculation of economic performance indicators
After the correction of price/wage distortions and the choice of an appropriate

social discount rate, it is possible to calculate the project’s economic performance
using the following indicators:
 Economic Net Present Value (ENPV): the difference between the

discounted total social benefits and costs;
 Economic Internal Rate of Return (ERR): the rate that produces a zero
value for the ENPV;
 Benefit-Cost ratio (B/C ratio), i.e. the ratio between discounted economic
benefits and costs.
The ENPV is the most important and reliable social CBA indicator and should be
used as the main reference economic performance signal for project appraisal
The methodology used in this Methodology Approach for the determination of the
financial return is the Discounted Cash Flow (DCF) approach. This implies some
assumptions:
 only cash inflows and outflows are considered (depreciation, reserves and
other accounting items which do not correspond to actual flows are
disregarded);
97
 the determination of the project cash flows should be based on the
incremental approach, i.e. on the basis of the differences in the costs and
benefits between the scenario with the project (do-something alternative)
and the counterfactual scenario without the project (BAU scenario)
considered in the option analysis;
 the aggregation of cash flows occurring during different years requires the
adoption of an appropriate financial discount rate in order to calculate the
present value of the future cash flows.
Formulas assumption
The indicators needed for testing the project performance are:
 the net present value of the project (NPV), and

 the internal rate of return (IRR);
 Benefit-Cost ratio (B/C ratio), i.e. the ratio between discounted economic
benefits and costs.
The net present value is defined as the sum that results when the expected
investment and operating costs of the project (suitably discounted) are deducted
from the discounted value of the expected revenues:
𝑛
𝑆0 𝑆1 𝑆𝑛
𝑁𝑃𝑉 = ∑ 𝑎𝑡 𝑆𝑡 + +. . 3 (1)
(1 + 𝑖)0 (1 + 𝑖)1 (1 + 𝑖)𝑛
𝑡=0
where:
 St is the balance of cash flow at time t;

 At is the discount factor chosen for discounting at time t;
 i discounted rate 5%
The internal rate of return is defined as the discount rate that produces a zero NPV:
∑ 𝑆𝑡
𝑁𝑃𝑉 = = 04 (2)
(1 + 𝐼𝑅𝑅)𝑡
The calculation of the financial return on investment measures the capacity of the
net revenues to remunerate the investment cost.
The discount rate reflects the opportunity cost of capital, defined as ‘the expected
return forgone by bypassing other potential investment activities for a given
capital’. There are many theoretical and practical ways of estimating the
reference rate to use for the discounting of the financial analysis. In this regard, it
3
This formula will be used for the calculation of FNPV and ENPV
4
This formula will be used for the calculation of FRR and ERR
98
is helpful to refer to a benchmark value. The European Commission, in 2013,
recommends that a 5% real rate is considered as the reference parameter for the
opportunity cost of capital in the long term. Values differing from the 5%
benchmark may, however, be justified on the grounds of the Member State’s
specific macroeconomic conditions, the nature of the investor (e.g. PPP projects)
and the sector concerned.
Further the B/C ratio is the present value of project benefits divided by the
present value of project costs:
𝑃𝑉(𝐼)
𝐵𝐶𝑅 = (3)
𝑃𝑉(𝑂)
where (I) are the inflows and (O) the outflows. If B/C >1 the project is suitable
because the benefits, measured by the Present Value of the total inflows, are
greater than the costs, measured by the Present Value of the total outflows.
Like the IRR, this ratio is independent of the size of the investment, but in
contrast to IRR it does not generate ambiguous cases and for this reason it can
complement the NPV in ranking projects where budget constraints apply. In these
cases the B/C ratio can be used to assess a project’s efficiency.
The main problems with this indicator are:
 it is sensitive to the classification of the project effects as benefits rather

than costs. It is relatively common to have project effects that can be
treated both as benefits and as cost reductions and vice versa. Since the
Benefit- Cost ratio rewards projects with low costs, considering a positive
effect as a cost-reduction rather than a benefit would only result in an
artificial improvement of the indicator;
 it is not appropriate for mutually exclusive projects. Being a ratio, the
indicator does not consider the total amount of net benefits and therefore
the ranking can reward more projects that contribute less to the overall
increase in public welfare.
The appropriate case for using the BCR is under capital budget constraints. The
following table provides an example of project ranking given a budget constraint
of 100.
PV (O) PV(I) NPV PV(I)/PV(O)
Case 1 100 200 100 2
Case 2 50 110 60 2.2
Case 3 50 120 70 2.4
Table 11. Benefit-Cost Ratio under budget constraints
99
Looking at NPV, the preferred Cases is 1 and the ranking is 1, 3, 2. But looking at
the ratios between PV(I) and PV(O), 3 is the favourite project. Since the budget
constraint is 100 and the PV(O) of case 3 is 50, project 2, the second in the
ranking, could also be undertaken. The resulting NPV (NPV(2)+NPV(3)) is 130,
which is higher than the NPV of Case 1.
7.3 Financial Risks
When evaluating the results coming from the exposed analysis, one should always
keep in mind that those results may be affected by uncertainty, since forecasts
may not always be accurate. In particular, the most relevant source of uncertainty
is represented by financial risk.
Financial risk is defined as the possibility that shareholders will lose money when
they invest in a company that has debt, if the company's cash flow proves
inadequate to meet its financial obligations. (cit: Investopedia)
It is intuitive that, given the wide amount of financial transactions involved in a

large infrastructure lifecycle, financial risks may have a relevant impact on the
project and may even compromise the entire project feasibility. One of the most
challenging aspect of financial risks is that these risks may remain virtually
invisible until they occur. For this reason, appropriate monitoring should be set in
place in order to allow for early identification of potential risk exposure and to
allow countermeasures and mitigation to be adopted in time.
Even though a detailed examination of Financial risks is beyond the scope of this
document, we believe it is important to provide at least a brief introduction to the
most relevant financial risks that may negatively affect the infrastructure
performance and that will be taken into consideration in WP3:
Liquidity Risk
Large infrastructure projects necessarily involve big contracts and relevant

milestones scattered throughout a large timeframe. Delays in payments and
request for advanced payments further increase the complexity of the financial
management. For these reasons it is possible, even for a project with considerable
margin, that at certain stage the project owner may run short of liquidity. This
may have serious consequences that range from not being able to honor
payments’ deadlines to not being able to pay salaries, which may bring the project
to a stall. Appropriate planning and adequate buffers are the best mitigation for
this kind of risk.
100
Exchange Rate Risk
Many relevant infrastructures are erected in a transnational environment and

heavy-specialized, multi-nationals corporations often compete for projects that will
be developed in a nation different to the one where the company is based in and
will have to deal with subcontractor of other countries as well. For this reason,
several currencies may be present in the same project at the same time.
Currencies, as it is known, are subject to volatility, especially those of
small/developing countries. For this reason, an unexpected drop or rise in a
currency value, may lead to significant changes in contracts value. Appropriate
exposure monitoring and financial countermeasures (e.g. hedging) are among the
most effective mitigation for this risk.
Commodity price fluctuation
Similarly to currencies, commodity price are also subject to fluctuations that may
have even more significant variation and are tougher to foresee. If these possible
fluctuations are not appropriately mitigated, they may significantly increase cost
reducing profitability. Mitigations implemented with success in the past are, once
again, an appropriate monitoring of the exposure and adequate hedging of
required materials.
Credit Risk
Credit Risk occurs any time there is a misalignment between the economic value
produced and the corresponding financial compensating flux. Delayed payments, a
standard in modern commerce, are the most representative example of this risk,
as the service/good is provided before the payment, partially or as a whole, is
remitted and there is therefore a chance (risk) that it will never be settled.
Depending on the specificity of the credit to be subscribed, possible mitigations
are, for example, requiring a suretyship or an advance payment, even for only a
portion of the total amount due.
In coherence with D1.2 and D1.4 a specific sheet for each financial risk is provided
in the following.
The identified risks will be take into consideration in the risk assessment activity
which will be performed in Task 3.1.
101
RISK NAME Exchange Rate Risk
When investing in a foreign country or dealing with

a foreign subcontractor, exchange rate fluctuation
RISK DESCRIPTION
may constitute a relevant risk, especially for
politically unstable countries
GOVERNANCE
RAGTIME MODULES OPERATIONAL
TECHNICAL
ROAD X
RAIL X
AFFECTED TRANSPORT MODE
AIRPORT X
PORT X
EVALUATION/PLANNING X
PROCUREMENT/DECISION X
INFRASTRUCTURE LIFE-CYCLE PHASE
DESIGN/PROJECT X
OF ORIGIN
CONSTRUCTION X
OPERATION & MAINTENANCE X
AFFECTED INFRASTRUCTURE LIFE-
DESIGN/PROJECT X
CYCLE PHASE
CONSTRUCTION X
PROCESS
SYSTEMS
RISK DRIVER
PEOPLE
EXTERNAL EVENTS X
EVENT TYPE Accidental Event
OWNER/CITIZENSHIP X
CONTRACTOR
STAKEHOLDER INVOLVED
(DESIGNER, BUILDER & OPERATOR)
FINANCIER X
102
RISK NAME Liquidity Risk
Large projects are particularly prone to the

liquidity risks: although economically sustainable
on the long term, the building of an infrastructure
RISK DESCRIPTION may come across the need for an immediate,
unexpected and significant liquidity availability.
Failure to satisfy this need may compromise the
whole project.
GOVERNANCE
RAGTIME MODULES OPERATIONAL X
TECHNICAL
ROAD X
RAIL X
AIRPORT X
PORT X
INFRASTRUCTURE LIFE-CYCLE
DESIGN/PROJECT X
PHASE OF ORIGIN
CONSTRUCTION X
EVALUATION/PLANNING
DESIGN/PROJECT X
CYCLE PHASE
CONSTRUCTION X
PROCESS
SYSTEMS
RISK DRIVER
PEOPLE
EXTERNAL EVENTS X
OWNER/CITIZENSHIP X
CONTRACTOR
STAKEHOLDER INVOLVED
FINANCIER X
103
RISK NAME Credit Risk
This Risk represent potential losses when credit is

RISK DESCRIPTION made to client, with the risk of losing the credit
granted (e.g. client bankruptcy)
GOVERNANCE
TECHNICAL
ROAD X
RAIL X
AIRPORT X
PORT X
EVALUATION/PLANNING
INFRASTRUCTURE LIFE-CYCLE
DESIGN/PROJECT
PHASE OF ORIGIN
CONSTRUCTION
OPERATION & MAINTENANCE
EVALUATION/PLANNING
PROCUREMENT/DECISION
DESIGN/PROJECT X
CYCLE PHASE
CONSTRUCTION X
PROCESS
SYSTEMS
RISK DRIVER
PEOPLE
EXTERNAL EVENTS X
OWNER/CITIZENSHIP X
CONTRACTOR
STAKEHOLDER INVOLVED X
FINANCIER X
104
RISK NAME Commodity price fluctuation
Commodity price risk is the threat that a change

in the price of a production input will adversely
RISK DESCRIPTION impact a producer who uses that input.
Commodity price risk is often hedged by major
consumers.
GOVERNANCE
TECHNICAL
ROAD X
RAIL X
AIRPORT X
PORT X
INFRASTRUCTURE LIFE-CYCLE PHASE
DESIGN/PROJECT
OF ORIGIN
CONSTRUCTION X
EVALUATION/PLANNING
PROCUREMENT/DECISION
DESIGN/PROJECT
CYCLE PHASE
CONSTRUCTION X
PROCESS
SYSTEMS
RISK DRIVER
PEOPLE
EXTERNAL EVENTS X
OWNER/CITIZENSHIP X
CONTRACTOR
STAKEHOLDER INVOLVED X
FINANCIER X
105
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109
9 Annexes: National Regulation and Standards for construction
industry from an insurance point of view
9.1 Annex 1: Belgium
Summary and Trends
Total construction and erection all risks premium income was EUR 31.3mn (USD
41.7mn) in 2014, or less than 0.4% of total non-life income, with CAR business
accounting for nearly 95% of all income. This figure was virtually unchanged
compared with 2013 premium income. Loss ratios overall have been poor in
recent years.
Since the 1980s, the three regions of Brussels, Flanders and Wallonia have been
responsible for their own building policy and legislation. The construction industry
comprises mainly SMEs, and since the end of 2011 some 20,000 construction jobs
have been lost, with employment falling to around 200,000 at the end of 2015.
The CAR/EAR sector is small and the most important contracts have historically
been state or private public partnership (PPP) funded projects, principally relating
to transport and infrastructure, although there are currently few such projects.
Private construction is largely confined to office blocks, residential developments,
shopping malls and some industrial developments - sometimes supported by
federal and/or regional government funding.
The rebound of the Belgian construction sector remains slow, and the industry is
still underperforming compared to the rest of the economy. Construction output is
expected to grow by just 1% in 2016, with the new residential construction
segment remaining subdued. Government investment also remains low at around
1.7% of GDP compared to the European average of 3%.
Source: Axco Global Statistics/Industry/Associations and Regulatory Bodies
110
Building Contract Conditions
Procurement follows the same method as practiced in most western countries. The
principal or owner appoints the architect, who then designs the building. The
project is tendered and the successful contractor builds the building. For private
sector work, selective tendering is most common, although negotiated tendering is
also used. The principal or owner usually effects insurance, although he or she
may not necessarily do this on behalf of all other parties, due to cost. A new Public
Procurement Law was approved in May 2016 in order to implement European
Directives 2014/24/EU and 2014/25/EU.
In accordance with legislation in the construction industry, contracts focus on

three participants in the construction process, namely client, architect and
contractor. The Architects Association or Ordre des Architectes, has a standard
form of contract between the client and the architect, which refers to the Normes
Deontologiques No 2 - the architect's code of conduct and fee scale. It attaches
particular importance to the objectives and obligations of the architect, the owner
and the hand-over of the works.
The execution of public contracts (works, services and supplies) is regulated by

the General Contracting Conditions of 26 September 1996, which establish a
standard contract wording for the execution of public contracts. Contracts for large
commercial construction projects are usually custom made; professional
associations such as the Building Confederation and the Real Estate Confederation
provide standard contracts for their registered members, but developers tend to
extensively modify them on large projects.
Belgian contracting parties can also use international standard form contracts such
as those provided by the International Federation of Consulting Engineers (FIDIC).
Building Regulations
In Belgium there are regulations at both federal and local level relating to the
construction of buildings. Approval is the responsibility of the regional authorities,
which also carry out inspections to ensure that the regulations are complied with.
Changes and convergence at the European level have been achieved through the
EC Construction Products Directive 89/106/CEE (CPD) and through the gradual
acceptance of Eurocodes in the member states. The construction and civil
engineering Eurocodes are a series of 10 European standards drafted by the
European Committee for Standardization (CEN) as follows:
 Eurocode 0: General rules for structural design
 Eurocode 1: Loads (snow, wind, traffic, temperature etc)
 Eurocode 2: Concrete structures
111
 Eurocode 3: Steel structures
 Eurocode 4: Composite steel-concrete structures
 Eurocode 5: Timber structures
 Eurocode 6: Masonry
 Eurocode 7: Geotechnical structures
 Eurocode 8: Seismic design
 Eurocode 9: Aluminium structures.
The Eurocodes and their national annexes will serve to demonstrate compliance of
buildings and civil engineering works with the requirements of Directive
89/106/CEE. The NBN (Bureau de Normalization) is the Belgian organization
responsible for the development and publication of standards in Belgium, and is a
member of the CEN and the International Standardization Organization (ISO).
Contractors' Liability
Contractors' liability insurance is usually effected as part of the main CAR/EAR

policy; the liability section of the policy invariably operates as a difference in
conditions coverage, as the contractor is required to have an annual general
liability policy, which assumes the primary liability exposure. Under Article 544 of
the Civil Code, the principal is held responsible on a no-fault basis for any liability
arising out of the contract.
Specific contract liability limits typically vary between EUR 2.5mn and EUR 5mn
(USD 2.7mn and USD 5.4mn) for smaller, straightforward contracts, whilst public
contracts and the like may see limits between EUR 10mn and EUR 25mn (USD
10.9mn and USD 27.2mn) or more.
The architect is legally responsible for all conceptual aspects and surveillance of
the building for a period of 10 years from the final hand-over. Law dated 15
February 2006 enables an architect to practice his or her profession as a legal
entity rather than as a private individual, thus establishing the principle of limited
liability. Architects' professional liability is obligatory for a 10-year period, and
local legislation establishes a minimum limit of liability of EUR 1.5mn (USD 1.6mn)
in respect of third party injury and EUR 500,000 (USD 543,478) in respect of third
party property damage with no annual aggregate. It also covers the principal in
the event of gross negligence of the contractor. In view of the foregoing,
contractors do not assume design responsibility.
In addition to the usual insurances carried by designers, contractors and owners,

there is a requirement for defects insurance to meet the so-called "decennial"
requirements of the law, although this is not mandatory. Local sources advise that
only around 20% of projects have such insurance.
112
Pollution and Environmental Liability
Environmental policy in Belgium is governed by Article 6 of the Special Law dated

8 August 1980 (as amended by the Special Laws dated 1988 and 1993) which lays
down the division of powers with respect to environmental policy. According to
Article 6, Section 1 of the law, the regions (Brussels, Flanders and Wallonia) are
exclusively competent for "environmental protection and water policy", which
includes the protection of soil, subsoil, water and air, the operating of hazardous
facilities and protection against noise. An explicit exception, however, is made for
chemicals, product standardization, protection against ionizing rays, including
radioactive waste, and the transit of waste.
As a result of the above, environmental regulations can sometimes appear

confusing and inconsistent from one region to another: Flanders is even said to
have some environmental standards which surpass those of the EU.
As environmental matters are the responsibility of different regional authorities in
Belgium, the European Directive 2004/35/EC of 21 April 2004 on environmental
liability had to be implemented in the three separate regions: implementation in
the Walloon and Flemish regions was effected by a Walloon Decree dated 22
November 2007 and by a Flemish Decree dated 21 December 2007. The Brussels
Ordinance dated 13 November 2008, which entered into force on 14 November
2008, followed by its implementing Order dated 19 March 2009 completes the
implementation of the EU legislation in Belgium.
9.2 Annex 2: France
Summary and Trends
In France, contractors' business is inextricably connected with decennial insurance

and with the professional liability of the specialists and experts involved. The
results of decennial liability business have been poor in recent years leaving few
underwriters in the market. Decennial liability is a technically complex business
with heavy unearned premium and loss reserving requirements and a potentially
very long run-off tail.
The property damage insurance known as "dommages ouvrage" (DO), effectively

acts as pre-financing of claims, which are then shared with decennial insurers.
Claims may be protracted as the possibilities of recovery from architects,
engineers and other professionals are explored.
Ordinance No 2005-658 of 8 June 2005 (Ordonnance No 2005-658 du 8 juin

2005) clarified some aspects of construction liabilities and restricted the obligation
to buy the construction cover "dommages ouvrage"; this is now required only for
dwelling risks.
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An amendment to the finance budget law adopted on 21 December 2006, allowed
a cap to be set on decennial liability insurance cover for projects other than
housing. A similar rule for "dommages ouvrage" was incorporated in a decree on
construction in July 2008. The actual maximum amounts of the cap were to be
fixed by a subsequent decree. The situation was resolved by Decree No 2008-
1466 of 22 December 2008 (Decret No 2008-1466 du 22 decembre 2008), known
as the Mercier Decree, which set a cap of EUR 150mn (USD 165mn) for each of
these two exposures.
The economic environment has had a severe impact on new housing construction
which fell consistently between 2011 and 2015. As at the end of October 2015 the
number of building permissions granted had increased by 2.5% compared with the
previous two quarters but the number of houses actually under construction had
increased by only 0.3%.
The contractor is responsible for insuring the construction risk and third party
liability during construction. For this purpose a CAR (construction all risks) policy
would be used.
In the French market, insurance of construction projects is compulsory for two

distinct types of cover, as described below, in accordance with Act No 78-12 of 4
January 1978 (Loi No 78-12 du 4 janvier 1978) (the Spinetta Law/Loi Spinetta) of
1978.
 Property damage after the completion of construction. This is a first party

policy known as "dommages ouvrage" (DO). It must be bought by the
owner of the premises under construction. The term "owner" (in French
"maitre d'ouvrage" or controller of the work) is intentionally broad; it
includes real estate developers, constructors and private persons who deal
directly with the constructor. Ordinance No 2005-658 of 8 June 2005
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restricted the obligation to buy the cover; it is now required only for
dwelling risks.
 Decennial liability insurance or 10-year building warranty cover. This must

be purchased by the building contractor. The insurance covers the main
structure; electrical and other fittings need only be guaranteed for two
years (biennal insurance).
Building regulations are part of the Code of Construction and Housing (Code de la
Construction et de l'Habitation).
The Ministry of Public Works is responsible for drawing up the regulations but does
not have the authority to ensure that they are complied with. Powers of
enforcement lie with the local prefecture or "mairie", which may inspect the works
and request to see documentation up to two years after the completion of the
project. At the end of a project the builder or contractor must obtain a "Certificat
de Conformite" from the local authority confirming that the completed works
conform to the regulations.
Public contracts are statutorily governed by specifications covering design,
construction and structural integrity. The standards organization Association
Francaise de Normalisation (AFNOR) sets out technical recommendations
applicable to products within EU norms, and where innovative products, materials,
components or equipment are being used there may be technical advisory notes
issued by the Scientific and Technical Centre for Building (Centre Scientifique et
Technique du Batiment - CSTB).
Pollution and Environmental Liability regulations and standards
There is a high level of public awareness surrounding matters of pollution and the
environment.
EU Directive 2004/35/CE on environmental liability, adopted in 2004, was

implemented in France by Act No 2008-757 of 1 August 2008 (Loi No 2008-757 du
1er aout 2008) on environmental responsibility. It establishes the principle that
the polluter compensates damages caused by prescribed activities, irrespective of
fault.
The major insurers have developed forms of cover that can include remedial work
as necessary under the EU environment directive.
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The Charte de l'Environnement became law on 1 March 2005. It laid out general
rights and obligations in environmental matters. Article 1384-1 of the Civil Code
prescribes the strict liability that follows the duty of care owed by owners. Codified
legislation known as the Environmental Code was established by decrees in
September 2000 and April 2001
9.3 Annex 3: Germany
Summary and Trends
These branches closed 2014 with a premium volume of EUR 1.9bn (USD 2.5bn)
down a little from the previous year. The combined ratio for 2014 is 89.2% and
the branch is expected to remain profitable in 2015 and 2016 with rates remaining
largely stable. Preliminary figures for 2015 indicate premiums of EUR 2bn (USD
2.2bn).
The situation in the market is unchanged with insurers prepared to underwrite
new types of risk such as technologically complex and highly exposed risks
although for the latter there are few insurers who have the necessary know-how
and capacity.
There are still many insurers offering their capacity in the construction, erection
and technical branches. German branches of foreign insurers have established
themselves well within and adapted to the market. In the area of buildings
construction there is a trend towards packaging policies covering construction and
liability.
According to the service regulations for building (Verdingungsordnung fuer

Bauleistung - VOB) the risk for acts of god and natural perils lies with the building
owner. If a building is part completed and is damaged by a subcontractor, for
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example if a roofer damages the walls of the building, the liability falls on the
building contractor. Each may take out separate insurance for these risks or make
arrangements with the other contractors or with a general contractor where there
is one. The building owner can pass the risk for acts of god to the general
contractor under contract, for example.
Insurance for advance loss of profits (ALOP) is expensive and the building
contractor may not make a claim if he or she does not comply with the contract
period. Acts of god are not covered. ALOP is seen as a problem cover in Germany
because insurers offer pecuniary loss cover, effectively making the insurer the
building contractor. Latent defects cover is not offered in Germany.
The Federal Building Law devolves responsibility for the drafting and policing of
building regulations to the individual states, each of which has its own set of
regulations, controlled by the relevant department of the state government.
Standards are very high and the authorities are in a position to insist on, for
example, the installation of sprinkler systems where the use of the building
warrants this.
Third party liability limits are between EUR 2.5mn and EUR 10mn (USD 2.7mn and
USD 10.9mn) and very occasionally up to EUR 50mn (USD 54.5mn). It is common
for the principal to insure the whole project, in order to avoid demarcation
problems between the insurances of the various contractors and in such cases the
global liability cover would come into play. Much business, however, is still done
on an annual turnover basis and high limits may be agreed, such as EUR 25mn
(USD 27.3mn) per project, before individual declarations are necessary.
Germany was one of the first countries to implement the full EU environmental
directive. The Environmental Damage Law (Umweltschadengesetz - UmwSchaG)
became effective in November 2007. It is unique in Germany in that it covers
damage to the environment, not a person's body or property. The claimant is the
state rather than a private person and the claim is the costs of recreating the
natural environment before the incident. This includes soil, water and biodiversity.
A policy covering liability for claims arising out of such losses was launched in the
market in October 2007. Since then, the take-up rate has been very good and
losses have remained low. This started to lead to rate reductions in the segment in
2009. Market sources continue to describe the experience with the regulation and
the insurance cover offered by the market as unspectacular.
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The German federal organization could have become a challenge, since it is up to
the regions (Laender) to enforce this law. The application of the regulation can
differ substantially depending on the economic situation in a region. This could be
one of the reasons that environmental organizations are empowered by law to
monitor state institutions to ensure that the law is enforced properly, but there
have been no major losses so far.
With the Environmental Damage Law (Umweltschadengesetz - UmwSchG) an

additional liability product has been on the market. It covers the costs of
recreating the state of the natural environment before the incident. This includes
soil, water and biodiversity.
Other than for the traditional environmental liability, which also covers gradual
pollution in certain cases, only sudden and accidental incidents are covered. The
policy has been available in the market since October 2007 and has sold quite
well. Rates continue to be soft and standard exclusions are not always applied.
The environmental impairment liability (EIL) policy was introduced in 1991 and
uses a manifestation trigger as opposed to the occurrence-based GTP policy. It
covers sudden and accidental losses as well as gradual pollution provided the
policyholder has made sure that state-of-the-art equipment and risk management
tools are used. Pollution cover was excluded from the GTP policy at the same
time.
9.4 Annex 4: Italy
Summary and Trends
The Italian construction sector accounts for around 4.8% of the country's GDP and
has been severely affected by the economic downturn in recent years. Since the
global credit crisis in 2008, Italian construction has lost nearly 50% of production
value and 69,000 employees due to the economic slump, decreased public
spending, declining private investment and a profound credit crunch.
Not all businesses, however, have been equally affected by the downturn, with
many of the larger Italian construction companies being actively involved in major
contracts around the world, many in emerging economies. Construction co-
operatives and consortiums focused on the domestic market and dependent on
public works have, however, been severely hit by deteriorating demand and
decreasing bank loans as have small and medium-sized businesses focused on
residential construction.
The construction sector is expected to see a marginal return to growth in 2017,

although the overall market value will remain well below that of pre-2008 peak
values. Limited public spending capacity will continue to hamper investment in
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social and utilities infrastructure, while a weak housing market means there is
limited demand for residential construction. As such, Italy is relying largely on
transport infrastructure to stimulate growth in the construction sector, with
several major rail projects planned or under way, many of which are benefiting
from regional financing.
In April 2016, a revised "simplified" Public Contracts Code was approved by way of
Legislative Decree No 50 of 18 April 2016, which essentially transposed (one day
after its deadline) the more recent provisions of EU directives 2014/23, 2014/24
and 2014/25 on the award of public concession contracts, and procurement in the
water, energy, transport and postal services. At the heart of the reform in Italy is
the extension and the strengthening of the powers entrusted to the National Anti-
Corruption Authority (ANAC).
The new legislation replaces the previous Public Contracts Code of 1 July 2006,
but unlike its predecessor the new code essentially consists of guidelines,
representing a "soft law" approach intended to help to ensure transparency,
consistency and rapidity of procedures.
Construction and erection all risks is not a large branch in terms of premium
income. Statistically it is reported under the "other damages" heading, which
forms part of the property branch, and it is estimated that construction and
erection all risks premiums are in the region of USD 240mn.
Public procurement contracts must comply with the new Public Contracts Code
which was approved by way of Legislative Decree No 50 of 18 April 2016, which
essentially transposes the provisions of EU directives 2014/23, 2014/24 and
2014/25 on the award of public concession contracts, and procurement in the
water, energy, transport and postal services. Private procurement contracts are
governed by the Civil Code (Articles 1655 to 1677), and any other relevant
legislation (for example, on public private partnerships - PPP and private finance
initiatives - PFI).
There are no standard contracts and International Federation of Consulting

Engineers (FIDIC) forms are not used in Italy. The Italian Association of
Construction Contractors (ANCE) publishes a standard form of construction
contract for private sector work, but it is not widely used.
Other common construction contract types include design/build and unit price
contracts. Italian specifications are descriptive rather than prescriptive. References
are rarely made to performance criteria or specific standards.
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The owner appoints a project manager to manage the construction process, who
may be the project designer or an independent project manager.
The Civil Code sets out the following legal guarantee periods in the case of
collapse of the building or latent defects discovered:
 10 years' liability for "shell, core, structural elements and other hidden parts
of the building"
The parties are, however, free to define longer guarantee periods through
contractual agreement, and insurance is not mandatory.
Under the recently implemented Public Contracts Code (Legislative Decree No 50

of 18 April 2016 - Article 103), insurance is compulsory for the full contract value
in respect of "damage or total or partial destruction of facilities and works".
Advance loss of profits covers are issued, particularly where bank financing is
involved. Indemnity periods are for 12 months or more depending upon the
project. The class also includes contractors' plant and equipment and "electronic
equipment" installations, principally data processing equipment.
Regulations for all new buildings are laid down by the state and state-funded
projects are inspected to ensure that the regulations are followed. In other cases,
the task of regulation is in the hands of local authorities which also approve plans
for new projects.
The Seismic Law (Law No 64 of 1974) established the calculations required for
anti-seismic construction, including dynamic load characteristics, and was followed
by Decree of 16 January 1996. Following the 2002 Molise earthquake, when a
school collapsed, national attention was focused on the problem of seismic risk
and a seismic zonation and seismic code (Ordinance No 3274/2003) were
introduced (subsequently converted into Decree of 21 October 2003), which
followed some features of Eurocode 8, which relates to design provisions for
earthquake resistance seismic criteria.
On 14 January 2008 a new Building Code (Norme Tecniche per le Costruzioni -

NTC 2008), was introduced, which was again largely based on Eurocode 8, with
some modified criteria, such as the artistic and cultural importance of the
construction, and the INGV seismic hazard map.
More general construction regulations include the following:
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 D M 20/11/87 - technical regulations for the design, execution and testing
of masonry-built constructions
 D M 16/01/1996 - technical regulations relative to general criteria for safety
control of constructions and loads and overloading
 C M LL PP 04/01/1989 - instructions regarding technical regulations for the
design, execution and testing of masonry-built constructions and for their
consolidation.
In practice, Italian buildings designed according to pre-1996 seismic codes usually

have deficiencies that result in a high risk of collapse in strong earthquakes and a
high risk of significant non-structural damage in low to moderate intensity
earthquakes, primarily because construction regulations have historically paid little
attention to building ductility, and also because the stock of structures from the
past has only rarely been upgraded to meet current anti-seismic regulations. The
marked urban expansion from the post-war period to the present has also suffered
from a lack of attentive territorial planning, as well as an all-too-frequent
tendency to build in violation of construction codes. Following the L'Aquila
earthquake in 2009, reports revealed widespread use of low quality cement and
inadequate reinforcing rods placing many public buildings at risk.
Efforts have been made towards developing harmonized European building codes,
but it is recognized that existing country, provincial and municipal building codes,
and constitutional rights, reflect widely differing social values on safety, the
environment, aesthetics and so on. It therefore appears unlikely that harmonized
building codes will become a reality in the near future. The current situation in
Europe is that if a product meets a European standard, or has received European
technical approval (ETA), national or provincial building codes must approve its
use.
Third party cover is often taken out for construction projects; EUR 5mn (USD
5.4mn) is a typical limit.
Under the previous Public Contracts Code (Legislative Decree 163 - Article 111)
there was a requirement for compulsory professional indemnity coverage for (a) a
limit not less than 10% of the contract value with a minimum limit of EUR 1mn
(USD 1.1mn) for each contract up to the EU threshold of EUR 5.2mn (USD
5.7mn), and (b) a limit not less than 20% of the contract value with a minimum
limit of EUR 2.5mn (USD 2.7mn) for each contract over EUR 5.2mn. Under the
new Public Contracts Code (Legislative Decree No 50 of 18 April 2016) no such
requirement is stipulated. Given, however, that most professionals are now
required to effect professional indemnity coverage, it is assumed that the principal
will require such a policy to be produced.
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Article 103 of Legislative Decree No 50 also stipulates the following:
 a third party liability policy with an indemnity limit of up to 5% of the value

of the work realized and between EUR 500,000 and EUR 5mn (USD 543,478
and USD 5.4mn)
 for contracts in excess of EUR 10.5mn (USD 11.4mn) a decennial liability
insurance to cover total or partial collapse of a built structure or associated
with serious construction defects with a limit not less than 20% and not
more than 40% of the value of the contract, taking into account the
principle of proportionality, having regard to the nature of the work.
Architects and designers may be held liable for damage arising out of the
esthetical or artistic aspects of construction, although coverage is difficult to
obtain and costly.
Law No 210 of 2 August 2004 and Decree No 122 of 21 July 2005 require
contractors to effect an advance payment bond - either with a bank or insurance
company - as well as a 10-year decennial liability insurance policy covering total
or partial collapse, or other serious construction defect, once the property has
been completed.
Pollution and Environmental Liability
Public awareness of environmental issues is growing and a number of

environmental or green organizations are playing an increasingly important and
visible role in Italian society.
In 2006 Italy became the first EU country to implement the EU Directive

2004/35/EC on environmental liability by way of Decree-Law No 152 of 3 April
2006, the Environmental Code, which establishes that there is liability only for
fraud or fault (no strict liability for the occupational activity). There is also an
exclusion of polluted sites where clean-up procedures have already been started.
Only in the case of nuclear activity, transportation, storage of hazardous materials
and distribution of gas is there an obligation to purchase insurance.
The Italian environmental pool has subsequently introduced a modified policy

wording complying with the law. According to the pool, more than 60% of all
accounts currently relate to waste disposal sites, followed by chemical and
metalworking exposures.
Decree-Law No 231 of 8 June 2001 extended corporate liability to legal entities for
crimes committed by individuals who act on behalf of a company (eg board
members, executive directors and any other persons who carry out management
activities) and Decree-Law No 121 of 7 July 2011 added a large number of
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environmental crimes to the list of criminal actions, mainly relating to unlawful
waste management. Law No 68/2015, mentioned under Legislative Update within
this section, introduced a new Chapter (VI Bis) to the Italian Penal Code by
defining crimes against the environment.
Major environmental issues include air pollution from industrial emissions such as
sulphur dioxide, coastal and inland rivers polluted from industrial and agricultural
effluents, acid rain damaging lakes and inadequate industrial waste treatment and
disposal facilities.
9.5 Annex 5: Slovenia
Summary and Trends
According to the Slovenian Insurance Association, contractors all risks (CAR) and
erection all risks (EAR) premiums amounted to only EUR 4.34mn (USD 5.76mn) in
2014.
Slovenia enjoyed a boom in infrastructure investment in the run-up to EU

accession but all large highway projects have now been completed. Because of
fiscal austerity and the slow pace of economic recovery there are almost no new
projects in either the public or the private sectors and most contractors and
developers have gone bankrupt. The only work going on at the time this report
was being prepared was the building of office and apartment blocks.
There is reported to be no standard form of building contract. Either contractor or

principal may elect to assume responsibility for insurance. Policies are normally
arranged in the joint names of the principal, the main contractor and all sub-
contractors.
According to the Obligations Code, the contractor is liable for rectifying latent
defects within 10 years of practical completion but is not obliged to arrange
insurance.
The national building regulations are the Building Construction and Civil
Engineering Act 2002. The regulations include technical standards for fire-resistant
construction. The free use of construction products from elsewhere in the EU in
accordance with the Construction Products Directive was affirmed by the
Construction Products Act 2000. Building regulation compliance is enforced by
independent inspectors and is said to be of a satisfactory standard.
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Slovenia's first earthquake building code was introduced in 1964 in the aftermath
of the 1963 Skopje earthquake in Macedonia, then part of the former Yugoslavia.
This required new structures to be earthquake resistant to a level of 6 on the
Richter scale or IX on the Mercalli scale. A new seismic code based on the
Eurocode 8 standard was introduced on 1 January 2002. Earthquake hazard
assessment for building design purposes is now based on the official Map for
Probabilistic Assessment of Peak Ground Acceleration with a Return Period of 475
Years, which divides the country into seven zones.
The normal level of contractors' liability insurance is EUR 500,000 (USD 543,478).
A contractors' law passed in 2003 requires contractors to arrange third party
liability insurance, including professional indemnity, with a minimum indemnity
limit of EUR 41,729 (USD 45,358). Because local CAR policies already include
defective design, materials and workmanship, the compulsory PI requirement is
not regarded as an issue by construction underwriters. Compulsory PI
requirements also apply to architects and consulting engineers.
Slovenia passed its own Environmental Protection Act in 1993. Article 11 of the act
requires the bearer of an environmental risk to arrange third party liability
insurance, although this is not enforced in practice. The legislation has been
updated to comply with the EU Environmental Liability Directive.
Slovenian third party policies cover sudden and accidental pollution. Third party
indemnity limits are generally low and the cover is of little real value. Other forms
of environmental liability insurance are only available from international specialist
insurers operating on a freedom of services basis.
9.6 Annex 6: Spain
Summary and Trends
According to data from ICEA, total premiums for this class in 2015 were EUR
63.9mn (USD 70.9mn), a decrease of 0.8% compared with 2014, and represented
just 0.3% of total non-life premium income excluding PA and healthcare.
Preliminary indications for the first six months of 2016 suggest a further overall
decrease of around 10%.
The CAR/EAR insurance market comprises three distinct segments: large

infrastructure projects, small residential and commercial construction, and
decennial business. There are only a few insurers, including Caser, Generali,
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Allianz, MAPFRE, Plus Ultra and Zurich, writing the largest risks while most are
prepared to compete for the smaller business. The impact of the economic crisis
on the sector has meant a fall in the volume of business for the insurance sector.
The construction sector is important in Spain, with several globally recognised

contractors, and it was a major contributor to GDP until 2008 as investment in
residential properties, industrial installations and infrastructure grew. Since the
global economic crisis, however, there has been a massive downturn in the sector,
with mortgage finance virtually drying up and thousands of built homes remaining
unsold. In 2015, however, the sector´s contraction bottomed out, with a 0.3%
contribution to GDP growth, according to a recent report from Atradius, and in
2016 output growth of around 4% is expected, followed by 5.5% in 2017. This
reflects the country's economic recovery, more foreign investments, a return of
business confidence and lower commodity prices.
Different contract forms are used for infrastructure contracts and private projects
but in most cases the main contractor is responsible for arranging the insurance.
Periods of indemnity are usually 12 months for buildings and 24 months for
infrastructure projects and erection all risks (12 months full maintenance and 12
months limited maintenance) but requests for 36 months are not unknown as it
may be demanded under contract terms.
Requests for ALOP cover are usually made when there is bank involvement in
project financing. It is mainly requested for large risks such as commercial
centres, energy start-ups and concession risks such as motorways.
Law 38/99 of 5 November 1999 on Building Construction, introduced in May 2000,

obliges property promoters to insure the 10-year decennial exposure for private
dwellings, should the building be subject to any significant defects that affect its
structural stability or structural resistance, with a maximum deductible of 1% of
the sum insured. The insurance, for 100% of the value of the contract including all
professional fees, is written under a separate policy and is effective from handover
of the project.
The legislation has also established shorter limitation periods of three years for
damages affecting the use of the building as a residential dwelling and one year
for material defects resulting from finished work of sub-contractors, with limits of
30% and 5% respectively of the value of the building work. All claims must be
presented within two years of the appearance of the defect.
Most builders opt for the basic obligatory cover, which does not extend to aspects
such as the water resistance of roofs and walls.
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The liability durations are different for public sector contracts, namely 15 years for
damage resulting from a breach of contract by the building contractor and 10
years for damage resulting from defective design.
Building construction regulations are found in the Building Code, which applies not
only to construction itself but also to fire protection and other issues. There is a
specific code for industrial sites, the Fire Security Regulations in Industrial
Establishments (RSCIEI), which refer to the construction of industrial buildings as
well as to fire protection matters, which have to comply with prevailing EU norms.
In order to secure a building permit, an application must be made to the local

municipality. Local codes (ordenanzas) supplement the national codes.
Municipalities are obliged to ensure compliance with both codes.
The first seismic regulations were introduced in 1963 since when they have been
expanded and regularly updated. The current regulations are the NCSE-02
introduced by Royal Decree 997/2002. There are no specific wind code
regulations.
In appropriate circumstances the National Centre for Loss Prevention (CEPREVEN)

issues recommendations to enable builders to ensure that their work complies
with the various fire protection rules within the context of insurance. The centre's
recommendations are widely adopted for non-insurance purposes such as those
for building specifications in connection with construction tenders.
General third party limits can vary significantly depending on the contractor, the
nature and size of the contract and the potential exposure. Limits as high as EUR
200mn (USD 217mn) were not unknown in the past, and were usually placed on a
layered basis - although this is somewhat hypothetical in the current climate
where there are very few large exposures, other than in overseas countries. The
limit may be fixed as a limit per event with a yearly aggregate limit or as an
annual limit only. There may or may not be a sub-limit per victim.
Professional indemnity cover for construction professionals is available in the

market and most corporate practices take annual cover through their professional
bodies for an amount of about EUR 500,000 (USD 543,500). Individual architects
and engineers may be required by contract or simply choose to complement the
cover, in which case either single contract PI or an annual cover may be taken.
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Spanish environmental policy has its basis in Article 45 of the Spanish

constitution, which sets forth the right to enjoy an appropriate environment and
imposes on everyone a duty to preserve it. Article 45 also obliges the Spanish
authorities to ensure a rational use of natural resources, with the aim of protecting
and repairing the environment, and determines that criminal or administrative
sanctions shall be imposed in the case of a breach of environmental law. In
addition, the article provides that offenders will have the obligation to repair the
damage caused.
The first Spanish Waste Law was passed in 1985, forcing municipalities to
approach the problem of waste and to take measures for protecting the
environment. The second Waste Law 10/1998 was aimed at establishing the
responsibility and obligations of each party involved in the waste management
process (this being absent from the one enacted in 1985). In July 2011 a new Law
22/2011 on Waste and Contaminated Soils came into force, transposing the EU
Waste Framework Directive 2008/98/EC into Spanish law and adopting all related
targets and objectives.
The Environmental Liability Law 26/2007 of October 2007 transposed the EU

Environmental Directive into Spanish law, bringing major changes to companies'
responsibilities and to the insurance of environmental risks.
Important amendments were introduced by way of Law 11/2014 of 3 July 2014
and Royal Decree 183/2015 of 3 March 2015 whereby the amount of the
guarantee required to be put in place by an industrial operator is no longer set
prescriptively by the environmental authorities, and operators are required to put
in place a guarantee (such as an insurance policy) based on their reasonable
assessment of possible liability, following criteria set in regulations.
In addition, the requirement to obtain a guarantee has been removed from

operators of certain activities which are deemed to pose no, or minimal, risk to the
environment. Such activities will be listed in a further regulation, but are
estimated to represent some 98% of all companies. Therefore a guarantee will
only be mandatory for operators of higher risk activities such as chemical and
certain mining waste activities.
A few of the major foreign insurers offer environmental liability cover and there is
also an Environmental Liability Risks Pool (Pool Espanol de Riesgos
Medioambientales - PERM) to which a number of local and foreign insurers and
reinsurers belong. It is thought that around 1,500 stand-alone policies have been
issued.
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9.7 Annex 7: Switzerland
Summary and Trends
In 2013 the amount spent on construction in Switzerland was CHF 63.1bn (USD
62.47bn), an increase of 1.2% compared to 2012. The majority of this growth is
due to a continued increased demand for housing, but civil engineering also
showed growth.
CAR, like the majority of industrial classes, has been subject to softening rates in
the last two years. Results continue to be positive.
There has also been an increased trend for projects of CHF 30mn (USD 29.70mn)
to CHF 50mn (USD 49.50mn) to purchase overall general cover for construction
risks under the so-called "Bauplatz" policy (construction site policy), which
includes among others liability cover for the principal and sub-contractors as well
as the surety risk.
For "above ground" construction, the principal insures the whole project and
deducts the relevant premium from the contractor's fee. In the "below ground"
area, the contractor usually insures as part of a consortium.
Maintenance periods are one to two years, but they are not a major issue in the
market. The insurance contract law provides for a two year statute of limitation for
insurance claims.
Each canton has its own set of building regulations, which are enforced by the
Cantonal Fire Police. The cantonal fire offices work in conjunction with builders and
authorities to develop best practice and regulations in order to ensure that safe
high quality materials are used.
The limits bought by the various parties involved would be typically:
 main contractor - CHF 10mn to CHF 50mn (USD 9.9mn to USD 49.5mn)
 engineers/architects - CHF 5mn to CHF 10mn(USD 4.95mn to USD 9.9mn)
 painters etc - up to CHF 10mn (USD 9.9mn).
The limits purchased are also restricted by capacity; beyond the CHF 50mn (USD
49.5mn) primary cover no excess capacity is readily available in the market.
128
Switzerland introduced a Federal Law on Environmental Protection (USG) in 1983.

This law has been amended many times since then. The amendment of 1997
included a definition of liability. This was not covered by the previous law, which
assumed that the existing network of general liability legislation offered adequate
protection to injured parties. Article 59a of the revised law incorporates the
principle that the owner of a factory or plant that represents a particular hazard to
the environment is liable for damage resulting from the realisation of this hazard.
The law describes those factories and plants which are deemed to represent a
particular hazard to the environment.
Liability is on a no-fault basis, the only exceptions being force majeure and gross
negligence of the insured or a third party.
Damage to the environment itself ("biological diversity") is excluded from this

liability. This is only likely to change if the EU creates a solution.
Article 59b of the law provides for the competence of the federal parliament to
prescribe that the liability of the owners of such factories or plants be covered by
insurance or in some other appropriate manner. In practice, this has never
happened.
9.8 Annex 8: UK
Summary and Trends
Construction is an important part of the UK economy and, following several years

of contraction because of the wider economic situation and lack of investment, the
construction industry started to recover during the second half of 2013 and, by
the end of 2014, had grown by 7.45% compared to 2013.
Since the beginning of 2015, however, activity has contracted, with official figures
showing that there had been a 3% downturn by the end of the third quarter.
Despite the slowdown and lack of significant new projects commencing in the past
year, capacity for construction insurance is abundant and rates are fiercely
competitive.
New Engineering Contract (NEC) wordings issued by the Institution of Civil

Engineers (ICE) are used for civil engineering risks, but most building projects in
the UK are based on the Joint Contracts Tribunal (JCT) standard form of contract.
In the case of new buildings, the contract allows for either the employer
(principal) or the contractor to arrange all risks insurance on the contract works.
129
In the case of refurbishment contracts, the employer is responsible for insuring
the existing structure against fire and specified perils, whilst the contractor is
required to insure the new works on an all risks basis.
There is no statutory requirement to provide latent defect insurance (LDI) cover,

although not all carriers offer it and it remains a standard exclusion in engineering
policies, there is an increasing demand for decennial or latent defects policies and
a number of insurance companies are providers of such cover.
Architects and consulting engineers are required by the Architects' Registration
Board to have professional indemnity insurance, although no limits are specified.
The ARB suggests a minimum cover of GBP 250,000 (USD 382,497). The Royal
Institute of British Architects (RIBA) has a recommended insurance scheme and
there is also an architects' mutual called WREN.
Current building regulations are derived from the Building Act 1984. Their main
purpose is to ensure the health, safety, welfare and convenience of building users
and fire resistance is considered only to the extent that it furthers that purpose.
Virtually every type of construction is covered by the act, the details of which are
revised periodically, as necessary.
Section 91(1) imposes on local municipalities the general duty of carrying the act
into execution and Section 91(2) states that, with certain limitations, it is their
function to enforce the building regulations in their area. Architects and
contractors are aware of the need to comply with the regulations and the level of
compliance is high.
Changes to Part B (Fire Safety) of the Building Regulations came into effect in
December 2006. One important amendment increased the maximum permitted
size of un-sprinklered compartments and the volume of storage space from 7,000
cubic metres to 440,000 cubic metres. For factories there is still no limit.
From October 2006 implementation of the Regulatory Reform (Fire Safety) Order
created a modern, simpler safety regime. One of the most important changes was
the ending of the fire certification process by the UK fire brigade, with
responsibility for the assessment of fire risk passing to the occupier.
Some insurers have expressed their reservations at the introduction of modern

building methods and any long-term impact on claims costs. While these methods
result in cheaper structures, the cost of repair and their adaptability are unknown
factors, as are how they will react long-term to water penetration from storm and
flood. Only around 5% of buildings are currently built using modern construction
methods but this figure could increase in the medium term to around 50%. Cost,
and the increasing emphasis on energy-efficient, environmentally friendly
construction are the main factors behind this trend.
130
Small to medium-sized contractors' covers are written typically on contractors'

combined package policies which include contract works, third party liability,
employers' liability, own plant, hired-in plant and continuing hire charge liability
sections.
For larger contractors, contract works and liability covers have tended to be
placed in separate markets, although there is an increasing demand for package
policies. Insurers are resisting this trend because of the inevitable tendency for
the liability business to be subsidised by the more profitable material damage
premium element.
There is a wide range of liability limits requested, according to the size of the
contract or contractor, anything from GBP 1mn (USD 1.53mn) to GBP 10mn (USD
15.3mn), with GBP 5mn (USD 7.65mn) now common. It is not unusual on larger
contracts for the primary limit of GBP 1mn (USD 1.53mn) to be included in the
CAR cover, with excess layers above that level purchased from specialist liability
markets.
Pollution cover under UK public liability policies is limited generally to sudden and
accidental events only, but special policies for gradual pollution are available.
Demand for gradual pollution insurance is concentrated in certain sectors and

cover is not purchased widely at present. No official statistics are available, but it
is suggested that the market for this type of cover is worth no more than GBP
50mn (USD 76.5mn) annually.
Legal liability for environmental damage can arise under three headings - common
law, the Water Resources Act 1991 and the Environmental Protection Acts 1990
and 1995.
The EU Environmental Liability Directive came into effect in March 2009. The
directive introduced no fault liability on a "polluter pays" principle. In theory it
should have increased demand for environmental liability cover, but to what
extent is not clear, as awareness amongst those likely to be most affected is low.
There is no pollution pool in the UK.
131

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Risk based approaches for Asset inteGrity

D1.3. Overview of the existing framework in the risk

Copyright © 2017 RAGTIME Project

Published in the framework of:

RAGTIME - Risk based approaches for Asset inteGrity multimodal Transport

Romina Colciago, Claudia Pani, Andrea Zuanetti, Alberto Grimaldi– AON

Maria Antonia Pérez Hernando, Saul Torres Ortega- UC

Marcello Cademartori, Rossella Siano, Paolo Basso– DAPP

Montesclaros Gutierrez Gonzalez, Eneko Menchaca Ibarra, Antonio Herrera

Mathieu Salel, Antoine MONNET- LGI

Revision and history chart:

VERSION DATE EDITORS COMMENT

0.1 26/05/2017 Claudia Pani, Romina ToC

1 Executive summary ................................................................................. 9

Figure 1. Main phases within the transport infrastructure life-cycle ................... 11

Acronym Full name

Transport infrastructure projects are exposed to a high number of technical,

This report has been structured in five main sections:

 Section 3: Introduction and context;

Moreover, in this report a number of best practices to be followed in transport

 Common and proper definition of risk;

Although it is a recognized problem, to date there isn’t a clear framework of

Finally, a number of research and design/construction projects developed by

2.1 Common definition of relevant project phases

Figure 1 aims at providing a common definition and classification of relevant

Figure 1. Main phases within the transport infrastructure life-cycle

During risk identification phase it is relevant to determine in which phase every

 Evaluation/Planning, a necessary condition for a successful infrastructure

2.2 General objective and report structure

The remainder of the document is structured as follows: Section 4 introduces a

3 Risk Management Framework

Risk is an abstract concept, complicated to define and in some cases, almost

Risk management is a decision-making process which involves considerations of

In the last decade, a number of risk management tools/methodologies have been

 Risk Management Planning: It constitutes the preliminary activity required

4 Best Practices in Risk Analysis of transport infrastructure projects

In this section a review of different existing guidelines is developed. These

Lastly, some best practices to be followed during a transport infrastructure

4.1 Review of existing guidelines

4.1.1 “Risk analysis and management for projects” (RAMP)

RAMP (Risk Analysis and Management for Projects) is a working methodology

Some of the benefits associated to the implementation of RAMP include:

 Avoidance of wasted work, because of the iterative nature of the process;

 Overall risk: the combined effect of all individual risks or sources of

Figure 2. Flowchart of the overall RAMP process (ICE, 2015)

4.1.2 “Infrastructure procurement route map”

UK Government, jointly with Infrastructure UK, the University of Leeds, the

The route map developed is not a prescriptive process. It describes some

Figure 3. Methodology overview (HMT, 2013)

The main four components of the route map are:

 Complexity assessment of the organisation and the project or program

4.1.3 “Improving infrastructure delivery: Project initiation route map”

The Project Initiation Route map is a product of government working

The route map is an aid to strategic decision-making. It supports the alignment of

 Complexity and context of the delivery environment;

Figure 4. Methodology main core (Infrastructure and Projects Authority, 2013)