Qatar Railways Development Company - Assignment Example

Qatar Railways Development Company Construction of Doha Metro Railway Line is already underway. It began in 2010 and is supposed to be complete by 2015. It is an 85 km railway network in Qatar. It will include an east coast link, a high-speed link, a freight line and a light rail system. The project is still at concept stage. The project is financed by the Ministry of Transport and Communication. At the time of its completion, the project will be able to attract new offers from various clients. The essence of this particular project will be communicated to potential clients through its features. Therefore, this project will link the company to new opportunities in Qatar region and beyond. This project is going to be one of its kind and a state-of-the-art railway. It is a reflection of the technological advancement of the company. As a company, the completions of this project will open door for further exploration of the region. It will help us diversify our customer base in order to attract as many clients as possible. That is to mean, the benefits that are associated with this railway line will be overwhelming. Economic productivity of the region will be greatly boosted as a result of completion of this railway line. Work breakdown Structures Level One: Traffic management Utility relocation Shoring Level Two: Tunnelling Track bed Track work Traction power LRT Signalling System Level Three: Supervisory control system Ticketing and fare collection equipment Light rail vehicles Maintenance and operations facilities Responsibility Assignment Matrix WBS Mr Smith Mr Philips Mr Wale Dr Romano Eng. McCain Traffic Management Utility relocation Shoring Tunnelling Track bed Track work Traction power LRT Signalling Supervisory control Ticketing & fare collection equipment Light rail vehicle Required skills and expertise Quantity surveyors IT Personnel Infrastructure consultant Electrical engineer Site agent Architecture Civil engineer Risk Assessment Risk analysis is the process of identifying, assessing and mitigating risks that face a certain project or investment. The composition of risk involves the probability of an event to happen and the effects that come with it. Therefore, it requires an investigation into the threats that face a particular project and estimation of the possibility of occurrence (Barkley, 2004). The success of a risk analysis process is in the availability of relevant information that is supposed to be used to gauge the level of risk exposure. Construction of Doha railway line will be faced with a lot of risks. All the risk exposures must be investigated and possible ways of mitigating reached. There are many ways through which the level of risk involved in construction of this railway line will be analysed. The main focus is to ascertain with high levels of accuracy the risk elements involved. The issue of complexity and uncertainty is evident almost in all situations of risk analysis concerning projects. The same issue faces Doha railway project. In analysing the probable returns from this investment, a lot of details are unavailable. Therefore, analysis has to be designed in a manner suitable for uncertainty (Hull, 2012). One of way of dealing with these complexities and uncertainties is by use of sensitivity analysis. It is useful in identifying variables which are likely to contribute most to the riskiness of an investment. The significance of variables would determine if it is worth to invest in more resources in terms of money and time in gathering information essential for reduction of uncertainty facing the variable. Risk analysis is a very important part of risk management. It enables one to fully understand risk in order to manage it. It is a way of identifying and managing potential losses facing an entity. There are a number of ways of dealing with the issue of risk analysis. One of them is through analysis of expected net present value (Hull, 2012). This requires a scenario where cash flow can be estimated accurately. This is not the case in construction of Doha railway. Nevertheless, there are other techniques that can be used to help in analysing the magnitude of risk. One of these techniques can be the use of probability analysis. There is also the use of sensitivity analysis Quantitative Risk Analysis technique This is a risk assessment method that analyses risk exposure by use of numerical values. In other words, the risk factors are quantified in order to assess the risk value. In most cases, the variables are analysed in monetary terms in order to understand the risk effect in terms of financial implications of the project. To assess risk quantitatively, the monetary value of risk is multiplied by the probability of occurrence. The outcome of the two variables is then multiplied by the rate of exposure. For instance, if the risk is valued at $100, the exposure factor is 25% and the probability of occurrence is 0.02, then the risk will calculated as: $10000 x 25% x 0.02 = $500 Weaknesses of Quantitative The value provided as the risk value is not always accurate. In most cases, it basically an approximation of values. The probability of a threat being realized is very difficult to determine. In as much as in some situations statistical data may be available, there is likelihood that it will cause more faults in risk analysis. It is very difficult to establish exposure factors. In most scenario, it has proven to be practically impossible to identify exposure factors Therefore, quantitative technique of analysing risk poses more challenges than its usefulness in assessment of risk. Qualitative Risk Analysis Method The difference of qualitative methods from quantitative factors is that it does not use absolute values. This approach analyses how each factor influences the magnitude of risk. This model relies more on judgement to assess the level of risk. This therefore demands that the person carrying out the evaluation must have the required expertise and competence in order to deliver credible results. This calls for special training depending on the type and nature of the assignment to be undertaken. Weaknesses of Qualitative approach the model is quite subjective and therefore it is likely to affect the quality of the expected outcome there is always a challenge with quantification of parameters in order to be able to evaluate the outcome Risk Factors Escalation of operation costs In a project involving railway construction, there is always a risk that the costs of materials and other operational expenses are likely to hike. This is basically because most of these projects take a substantial time to completion. Therefore, the rate of inflation may have led to high cost of living leading to high prices for every resource. In a situation of this kind, there is need to adjust the budget in order to accommodate the rising costs. In assessing the likelihood of occurrence, one needs to understand the trend in economic growth (Barkley, 2004). Factors like political instability in a country can be used to hint at the trend of economic growth. One common way of dealing with a probable rise in cost of operation is the use of forwards and futures contracts. These are ways through which a company can acquire products in the future at a predetermined price. The buyer and the sellers enter an agreement to exchange products at a predetermined price in the future. Technical Problems There is a possibility of a technical hitch in the undertaking of this project. This may arise due to incompetence or lack of professional know-how. This requires that the project must be undertaken with utmost professional diligence. This demands that the best professionals are selected to carry out the technical aspects of this project. COST ESTIMATE AND BUDGET On average, it is estimated that it costs about $30 million to construct one kilometre of railway. That means that it will cost roughly $2.55 billion. The figure represents the aggregate cost of constructing 85 kilometre railway line. Nevertheless, the cost seems to increase even as one moves away from MENA region towards Europe. The proportion of fixed costs is estimated to be about 70% of the total costs of the infrastructure. This value translates to about $1.785 billion for fixed costs. At the same time, the estimated cost overrun in the railway construction sector is about 45%. This is the value when the cost of inflation has been put into consideration. Overhead costs are estimated to take about 5% of the whole construction cost. PROJECT SCHEDULE Project Management- Gantt Chart task start date duration (days) end date task 1 2/20/2010 90 5/21/2010 task 2 4/28/2010 180 10/25/2010 task 3 7/30/2010 150 12/27/2010 task 4 11/12/2011 390 12/6/2012 task 5 6/7/2012 330 5/3/2013 task 6 8/12/2013 420 10/6/2014 task 7 4/4/2014 120 8/2/2014 task 8 2/6/2014 120 6/6/2014 task 9 1/10/2014 90 4/10/2014 task 10 12/12/2014 60 2/10/2015 task 11 1/17/2015 60 3/18/2015   Reference Barkley, B. (2004). Project Risk Management. New York: McGraw-Hill. Fischhoff, B & Kadvany, J. (2011). Risk: A Very Short Introduction. New York: Oxford University Press. Hull, J. (2012). Risk Management and Financial Institutions. New Jersey: Wiley. Williams, M. (2008). The Principles of Project Management. VIC, Australia: Sitepoint. Read More