Reviewing Risk for South Africa’s Rail, Port, and Pipeline Projects

Transnet Turns to @RISK to Evaluate Capital Projects Risk in South AfricaManaging the delivery of all necessary goods within a country is not a simple task. It can require the careful coordination of ships, ports, railways, and pipelines to ensure that citizens, no matter where they are, get the goods and services they need. Expanding this system to accommodate more people and growth can be a daunting task, and requires careful analysis of the potential risks that could threaten the schedule, cost, and efficacy of the project.  Transnet, the primary freight logistics company in South Africa, relied on @RISK to assess the expansion of their infrastructure, using the software to better understand the risks that might arise during large-scale and complex capital projects.

Francois Joubert, National Program Risk Manager with Transnet Capital Projects (TCP), was charged with determining the key risks across the different projects in the TCP project portfolio. “It is a complex project environment…A project can be a like-for-like replacement, requiring a team of three people, costing less than $465,000, and have a duration of three weeks,” says Joubert, “or it can be a port infrastructure project with multiple stakeholders, costing $558M, involving 150 people, and requiring complex engineering and procurement which takes five years to complete.”

Using @RISK, Joubert was tasked to use the TCP’s  existing risk registers and identify the following:

  • Where in the risk break–down structure and project type do the most significant risks appear?
  • In which risk types and project types do the most significant risks appear?
  • What is the influence of project start delay risks on the project portfolio?

“Using specific @RISK functions…combined with a whole range of Lookup and SumIfs statements, some named ranges, and with conditional formatting, I was able to build a representative model,” Joubert explains.

The results have been presented to Transnet and are going to be used to identify the root causes of these portfolio risks.

Joubert says that Palisade software made this project possible. “It’s an excellent decision-making tool; it provides scientific, defendable numbers for contingency, risk ranking, etc.,” he says. “There are too many useful features to count—but its flexibility of use, particularly because it is Excel based—may be the most valuable.”

Read the full case study here.

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