A RISK-CENTRIC WAY TO ACHIEVE NET ZERO

To meet the UK’s legally binding target of net-zero infrastructure by 2050 and halt the climate crisis, the construction sector needs more control and clearer regulatory guidelines. Along with the National Infrastructure Strategy, greater focus on risk management is needed to ensure projects remain on time and on budget.

What does a risk-centric approach to project management involve and how can it be applied to large-scale infrastructure programmes?

Set clear targets from the outset

The UK Government’s target to achieve net-zero emissions by 2050 will only be realised if the right policies and targets are introduced. The CBI is calling for the Government to give clear targets for the delivery of the National Infrastructure Strategy and specific regulatory guidelines to support this.

A risk-centric approach to project management should also be adopted from the design stage through to completion. This will enable stakeholders to take better-informed decisions and mitigate the risk of cost and time overruns.

 

Consider contractor risk

The increasing size and complexity of infrastructure projects has led to increased awareness of the risks faced by contractors. However, the introduction of sophisticated online tools to facilitate risk planning and communicate key issues to stakeholders can lead to corners being cut. While such tools can perform a valuable role, this should not come at the expense of genuine risk experience.

 

Be aware of ‘optimism bias’

To facilitate the UK’s net-zero transition, eliminating a culture of over-optimism is essential. The renowned mega project expert, Bent Flyvbjerg, has previously highlighted the tendency for project managers to ignore real-world risk.

Where levels of uncertainty are high, investors will be more risk averse, so presenting them with a realistic view of risks at the outset and at critical gateways, is vital. This will enable projects to be delivered within budget and to the agreed timescales.

 

Role of risk modelling

Risk modelling techniques, such as Monte Carlo Simulation can be used to support decision-making when delivering green infrastructure projects. By assigning a numerical probability to possible scenarios, project managers can gain a better understanding of the potential cost of their risk exposure and act accordingly.

To achieve its environmental objectives, UK construction industry needs to hit the ground running. Upfront investment in risk management at an early stage, combined with risk-centric project management skills, will help deliver an all-important pipeline of sustainable and resilient infrastructure.

 

First published at Infrastructure Intelligence