Project Risk Management

1. Project Risk Management Teknik Elektro FT UNDIP

2. 2. Risk Identification 4. Risk Response 4. Risk Monitoring & Control 3. Risk Analysis Qualitative & Quantitative Contents 1. Risk Management Plan

3. Proyek EPC Kontraktor mengerjakan proyek dengan ruang lingkup tanggung jawab penyelesaian pekerjaan meliputi studi desain, pengadaan material dan konstruksi serta perencanaan dari ketiga aktifitas tersebut Sumber: Yuhistira Sudarsono, Kamus Istilah Proyek

4. Proyek EPC • Tanggungjawab desain sepenuhnya kontraktor • Persyaratan spesifikasi performansi tertentu • Fully equipped facility • Pengawasan langsung oleh Pemilik • Lumpsum • Test After Completion • Prosedur klaim yang ketat • Kontraktor ambil alih semua risiko • Final contract price • Waktu penyelesaian lebih pasti

5. Risiko Proyek EPC Pelaksanaan Proyek EPC dari sisi kontraktor memiliki risiko yang cukup besar karena melakukan pekerjaan simultan dari engineering sampai suatu fasilitas berproduksi

6. Risiko pembayaran proyek EPC Scope of work information Very Little Partial Complete High Moderate Low Uncertainty Medium High Low Degree of risk 100% 0% Suggested risk allocation Owner (client) contractor 0% 100% Contract Types CPPF CPIF CPFF FPIF FFP • CPPF : Cost Plus Percentage Fee • CPIF : Cost Plus Incentive Fee • CPFF : Cost Plus Fixed Fee • FPIF : Fixed Price Incentive Fee • FFP : Firm Fixed Price

7. Keuntungan Proyek EPC • Tanggung jawab berada disatu tangan yaitu kontraktor utama. • Perancangan, pembelian dan konstruksi bisa berjalan paralel sehingga menghemat banyak waktu. • Lebih murah karena terjadi suatu integrasi gabungan aktifitas pekerjaan dengan sistem manajemen proyek • Kontrak dalam satu kontrak EPC • Pelaksanaan konstruksi dapat dipertimbangkan lebih matang • Pekerjaan selesai lebih cepat pemilik dapat segera mengoperasikan dan mengasilkan produk

8. Project Risk Management Project Risk Management is the systematic process of identifying, analyzing, and responding to project risk The objectives of Project Risk Management are to increase the probability and impact of positive events and decrease the probability and impact of events adverse to project objectives. GOAL : Project Risk Management is to move uncertainty from risk to opportunity

9. Risk Management Process

10. Project Risk Project risk is uncertain event or condition that, if occurs, has a positive or a negative effect on a project objective. A risk has cause and consequence. Project risk includes both threats to the project objective’s and opportunities to improve on those objective • Risk analysis conducted as long as project running • Risk Identification should be conducted in all project life cycle • Risk identification also conducted when the performance is far from the target

11. Select Project Types of Project 1.Grass Root Project 2.Revamping Project 3.Expansion Project 4.Relocation Project

12. Project Contract Structure Construction Management

13. Project Contract Structure Traditional EPC : Single Point of Responsibility

14. Project Contract Structure National Government Production Sharing Contract or Concession Agreement Joint Venture Joint Venture Agreement Operating Agreement Project Company/ Oil & Gas Field Operator Security & Financing Agreements Lender EPC Contractor O&M Contractor Offtaker Drilling Contractor

15. Risk Breakdown Structure (RBS) The Risk Breakdown Structure (RBS) lists the categories and sub-categories within which risks may arise for a typical project. Different RBSs will be appropriate for different types of projects and different types of organizations. One benefit of this approach is to remind participants in a risk identification exercise of the many sources from which project risk may arise

16. Internal Eksternal Kinerja Proyek Subcontractor & Suppliers Project Management Procurement Construction Engineering Basic Design Temporary Facility Purchasing Regulatory Initiating Market Detail Design Permanent Facility Expediting Planning Customer Shipping & Transportation As Built Testing & Commissioning Executing Weather Monitoring Controlling Warehousing Closing Risk Breakdown Structure Proyek EPC (PMBOK@ Guide, Op.cit, hal. 244 dan 253 )

17. Project Risk Management Process

18. Procurement EPC Sequence Process system system Mechanical instrument engineering Electrical system construction electrical Piping Piping, instrument, electrical Mechanical & electrical structural structural U/G composite Under ground

19. P & ID AND PLOT PLAN PIPING LAYOUT PIPING ISOMETRIC MATERIAL TAKE-OFF SPOOL DRAWING Piping Engineering

20. PLOT PLAN STRUCTURAL DESIGN FRAMING PLAN & DETAIL MATERIAL TAKE-OFF SHOP DRAWING Civil Engineering

21. Delivery Equipment

22. Civil Construction Existing pile at Main Process Area Piling work at Bulk Material Store Site office Preparation of permanent fencing installation

23. Civil Construction Concreting of slab & beam (Bagged Material Store) Concreting of pedestal (Packing Bin Building) Installation formwork & pouring concrete of column (Process Building) Installation of formwork & rebar (TNB Substation)

24. Mechanical Construction

25. Project Risk Management Process • Risk Management Planning -deciding how to approach, plan and execute the risk management activities for a project • Risk Identification -determining which risk mightaffect the project and documenting their characteristics • Qualitative Risk Analysis -prioritizing risks for subsequent further analysis or action by assessing and combining their probability of occurrence and impact • Quantitative Risk Analysis –numerically analyzing the effect on overall project objectives of identified risks • Risk Response Planning –developing options and actions to enhance opportunities and to reduce threats to project objectives • Risk Monitoring and Control –tracking identife risks, monitoring residual risks, identifying new risks, executing, executing risk response plans and evaluating their effectiveness throughout the project life cycle

26. Risk Categories • Technical, quality or performance Risk: unproven complex technology, unrealistic performance goals, changes to technology used, change the industry standard • Project Management Risk: poor allocation time and resources, inadequate quality of project plan, poor use of project management discipline • Organizational Risk: cost, time and scope are not consistent; lack of prioritization of project, inadequacy of funding, resource conflict • External Risk: shifting regulatory environment, labor issues, country risk, weather. Force major risk require disaster recovery plan rather than risk mgt

27. Roundtable Discussion

28. Source Of Risks Under Control Internal Factors • Team Competence • Resource Availability • Lack of configuration control • Applying general scope Control Level External Factors • New Technology • Customer point of contact • Delivery • Incompatibility product • Interdependency to other party Out of Control

29. Technique • Information gathering techniques • Brainstorming: to obtain a comprehensive list of risk to be addressed • Delphi Technique: is a way to a consensus of an expert on a subject The experts are identified but participate anonymously • Interviewing : interview the experienced project managers, or subject matters experts • SWOT analysis: examine the project to increase the bredth of the risk considered • Diagraming Techniques: • Cause & Effect diagram (Fish bone diagram): to identify cause of risk • System or process flow charts: how various elements of a system interrelated • Influence diagram: graphical representation of a problem showing causal influences • Checklist • Assumption Analysis

30. Output • Risk Register The document containng the result of the qualitative risk analysis, quantitative risk analysis and risk response planning The risk register details all identified risks, including description, category, cause, probability of occuring, impact on objectives, proposed responses, owners and current status. The risk register is a component of the project management plan.

31. Risk Register Form

32. PT Rekayasa Industri

33. Risk Analysis Technique • Risk probability & impact • Describe in qualitative terms: high, moderate, low • Risk probability is the likelihood that a risk will occur • Risk consequences is the effect on project objectives if the risk event occurs • Probability/impact risk rating matrix • A condition based on combining probability and impact scales • Risk probability scale: • General scale: 0.0 (no probability) up to 1.0 (certainty) • Ordinal scale: very unlikely to almost certain • Risk impact • General scale: very low, low, moderate, high very high • Cardinal: linear or non linear • Probability-Impact (P-I) matrix: multiplication of the scale value of probability and impact (PxI). The result classified into high risk, moderate risk or low risk

34. PT Rekayasa Industri

35. Risk Event Risk Event Status = Risk Probability x Amount at Stake • Risk Event Status, precisely what might happen to the detriment of the project • Risk Probability, how likely the event is to occur • Amount at Stake, the severity of the consequences

36. Boston Square Qualitative Risk Assessment Matrix

37. Authority of Management Authority of Project Manager Budgeting the Risk Profit Margin Management Reserve Project Cost Project Risk Budget (Fee & Contingency Budget)

38. Risk Response: Strategy • Avoidance Changing the project plan to eliminate the risk or condition or to protect the project objectives from its impact • Transfer (Deflection/allocation) Transfer the risk impact to a third party together with ownership of the responses • Mitigation • Reducing the expected monetary value of a risk event by reducing the probability of occurrence (e.g. using proven technology to lessen the probability that the product of the project will not work), reducing the risk event value (e.g. buying insurance, use of fix contract) or both • Acceptance • Accepting the consequences. Acceptance can be active (e.g. by developing a contingency plan to execute should the risk event occur) or passive (e.g. by accepting a lower profit if some activities overrun)

39. Risk Monitoring • Risk monitoring is describe in the following process: • Keeping track of identified risk • Monitor residual risk and identify new risk • Ensuring the execution of risk planning • Evaluating the effectiveness in reducing the risk • Purpose • Risk response has been implemented as planned • Risk response are effective • Assumption are still valid • Risk trigger occurrence identified earlier • Procedure and policies are followed • Identify new risk that were not previously identified

40. Technique • Project Risk response Audit: examining and documenting the effectiveness of the risk response and the person managing (owning) the risk • Periodic project risk review: periodically review risk plan an adjust as required • Earned value analysis: when a project deviates significantly from baseline, up dated risk identification and analysis should be performed • Technical Performance Measurement

41. Risk Case

42. BP-Texas Refinery Explosion

44. Risk Response POSITIVE RISKS NEGATIVE RISKS • EXPLOIT • SHARE • ENHANCE • ACCEPTANCE • AVOIDANCE • TRANSFER • MITIGATION • ACCEPTANCE THREATS OPPORTUNITIES Contingent Response Strategy

45. Thank You !