Heathrow Terminal 5 Risk Management
Introduction
Work on the London Heathrow terminal 5(T5) began in 2002 after a 4 year public enquiry. It took six years to build at a cost of £4.3bn. The facility, situated on a 251hectar site had 6000 people working on site at any one time (Health and Safety Executive, 2005). It boasts of 30,000 square meters of glass walls, has 60 new aircraft stands and includes 13km of tunnels which were bored for baggage handling and rail links (BBC, 2007a).
This report will be evaluating the project risk management in the construction of T5 airport. It will start with a brief background on Heathrow terminal 5. The report will then take a critical look at some of the British Airport Authority’s (BAA) method of risk allocation and identification. It will then provide an analysis and will finally conclude with recommendations.
In undertaking a project of this magnitude, BAA would have had to overcome a fundamental characteristic of any project; risk. Kerzner (2009:743) defines risk as “a measure of the probability and consequence of not achieving a defined project goal” and suggests that risk management must judge both the probability and the consequence as significant to be efficient.
It has also been recognised by Chapman and Ward(2003) that, it is a basic good practice to ensure that all the risks be allocated to an owner in financial terms and they should possibly be different parties as suggested in their Shape, Harness And Manage Project Uncertainty (SHAMPU) process. In its simplest form, the SHAMPU process advocates the shaping of the project which will include clarification of risk ownership, harnessing plans and implementation management.
Risk identification
It could be argued that one of the main sources of risk identification for BAA was through lessons learned due to the amount of time it took for planning and enquiry which included a look at various other airport projects. During his interview with the House of Commons, Mr. Collins Matthew, the chief
Work on the London Heathrow terminal 5(T5) began in 2002 after a 4 year public enquiry. It took six years to build at a cost of £4.3bn. The facility, situated on a 251hectar site had 6000 people working on site at any one time (Health and Safety Executive, 2005). It boasts of 30,000 square meters of glass walls, has 60 new aircraft stands and includes 13km of tunnels which were bored for baggage handling and rail links (BBC, 2007a).
This report will be evaluating the project risk management in the construction of T5 airport. It will start with a brief background on Heathrow terminal 5. The report will then take a critical look at some of the British Airport Authority’s (BAA) method of risk allocation and identification. It will then provide an analysis and will finally conclude with recommendations.
In undertaking a project of this magnitude, BAA would have had to overcome a fundamental characteristic of any project; risk. Kerzner (2009:743) defines risk as “a measure of the probability and consequence of not achieving a defined project goal” and suggests that risk management must judge both the probability and the consequence as significant to be efficient.
It has also been recognised by Chapman and Ward(2003) that, it is a basic good practice to ensure that all the risks be allocated to an owner in financial terms and they should possibly be different parties as suggested in their Shape, Harness And Manage Project Uncertainty (SHAMPU) process. In its simplest form, the SHAMPU process advocates the shaping of the project which will include clarification of risk ownership, harnessing plans and implementation management.
Risk identification
It could be argued that one of the main sources of risk identification for BAA was through lessons learned due to the amount of time it took for planning and enquiry which included a look at various other airport projects. During his interview with the House of Commons, Mr. Collins Matthew, the chief
References: • BBC (2007a) Countdown to terminals takeoff. Available at http://news.bbc.co.uk/1/hi/uk/7015785.stm [Accessed: 30th October, 2009] • BBC (2007b) One year deadline for terminal 5 • Chapman, C. And Ward, S. (2003) Project risk Management: Processes, Techniques and Insights. 2nd edition .Chichester: John Wiley & Sons. • Illet, D. (2006) ‘Heathrow’s high tech Terminal 5 prepares for takeoff’. Silicon.com.20th February, 2006. Available at http://management.silicon.com/itdirector/0,39024673,39156524,00.htm [Accessed, 2nd November, 2009] • Kerzner, H • National Audit Office (2005) Improving Public Services Through better Construction. Available at http://www.nhs-procure21.gov.uk/news/downloads/87/mkcasestudy.pdf [Accessed: 28th October, 2009] • Parliament.uk (2008)