A Case for Risk Management
Early in the morning of October 24, 1994, a gaping hole suddenly appeared in
the middle of a construction site in the vicinity of Heathrow airport, London,
England. According to reports, the hole continued to enlarge for several days
bringing disarray and confusion to the airport. Surprisingly, and fortunately,
no one was killed or even injured by the collapse, but it was arguably the worst
civil engineering disaster in the UK in the last quarter century.
The hole resulted from the collapse of a tunnel roof on a contract employing
the method of sprayed concrete. To recover, it reportedly took almost two years
and some US $90 million, nearly three times the original contract value. Other
contracts using the same approach were also halted during investigations and
large fines were levied on the faulted contractors.
After years of study by a specialist team, the report of the United Kingdom's
Health & Safety Executive concluded that a chain of events involving a lengthy
list of design, workmanship, quality control and management shortcomings were
at the root of the problem. This report was only published following, and partly
as a result of, the inevitable legal proceedings. Some of the report's findings
are most instructive. For example:
The report says the event showed "all the hallmarks of an organisational
accident." And "The collapse could have been prevented but a cultural
mindset focused attention on the apparent economies and the need for production
rather than the particular risks."
"Warnings of the approaching collapse were present from an early stage
in construction but these were not recognized." Evidently errors were made
"leading to poor design and planning, a lack of quality during construction,
a lack of engineering control and most importantly a lack of safety management."
"Such accidents must be prevented through effective risk management. The
industry cannot simply rely on good fortune", and "Risk assessment
should be a fundamental step in the procedures adopted by all parties: It is
inappropriate wholly to leave the control of risk to contractors." The report
particularly singles out new forms of contract or new technologies in which the
parties have a poor understanding of their respective roles.
This case will remind older readers of the Station Square Development roof
collapse in 1988, in greater Vancouver, Canada. This case was investigated by
a Commissioner Inquiry and was widely reported in the project management press
in North America. The failure was attributed to a specific flaw in the structural
roof design. However, any project manager reading the Commissioner's report will
recognize the chain of events, the adverse decisions, and the structural warnings
prior to the failure as the same failure of "project management attitude"
so evident in the London case.
Meantime, over in Hong Kong a government-appointed committee has released a
report "Construct for Excellence" containing over 100 recommendations.
These call for public works officials to end inter-departmental disputes, establish
better cooperation and put greater emphasis on quality when awarding design and
construction contracts. The report follows the disclosure of a number of scandals
involving corruption, shoddy foundation work and poor quality construction.
Does all this mean that we are learning? Hardly. Much lip service is given
to risk management, and the limited number of projects that do include a formal
risk management component typically do so as part of the project's planning phase.
Thereafter, this planning exercise is carefully filed, rarely again to see the
light of day. Unlike safety, we suspect that very few projects of any kind have
risk management as a standard agenda item at their regular progress meetings.
Just as quality control focuses on the detail, quality assurance takes a much
broader view involving attitude. Similarly, so it is with safety and risk management
but clearly, risk management has not yet come of age.