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VENEZUELA VENEZUELA NATIONAL RAILWAY NATIONAL RAILWAY PROJECTPROJECT
Venezuela National Railway Venezuela National Railway Project Project
Controlling Project Costs
and Risks
Summer 2008
Kugan Panchadsaram
Projecto La Torre Incorporated Raisa Spector, Omar Mahmoud, David Saavedra, Mark Sanbower,
Roberto Mosciovecchio, and Suzanne Smith
Project Background Project Background
Our company, Projecto La Torre Incorporated, has been contracted bythe ministry of infrastructure of the government of Venezuela to construct 5 miles of railway embankment at a remote location in the state of Guarico(8 hours Southwest of the capital city, Caracas).
This project is part of the initiative by the government of Venezuela to expand the national railway system as stated in Venezuela’s constitution of 1999.
Project Requirements and Project Requirements and CharacteristicsCharacteristics
5 miles of railway embankment constructed
Recruiting workers for the project Construction of temporary infrastructure
(dorms, cafeteria, office, and storage) 9 months to complete the project Financing the project $4,000,000 budget
Venezuela Venezuela
Republica Bolivariana de Venezuela Capital City: Caracas Language: Spanish Area: : 353,841 square miles Population: 28,199,822 GDP: $335 billion (30th in the world) Major Export: Oil Popular Sports: Baseball and Soccer
Railroads in the JungleRailroads in the Jungle
Team ContractTeam Contract
Our team contract states how we will work and communicate with eachother on the project. Allteam members helpedwrite the contract andall team members signed the contract.
Project Scope StatementProject Scope Statement
Scope statement is a
document that defines the
project and lists what must
be accomplished. It states the boundaries
of the project - what will
done and what won’t be
done on this specific
project.
Work Breakdown Structure (WBS) Work Breakdown Structure (WBS) and WBS Dictionaryand WBS Dictionary
The WBS divides major project deliverables into smaller, more manageable components.
The WBS was done to level 3. The WBS Dictionary explains all terms,
especially potentially confusing terms, to anyone reading the WBS.
The following slides contain excerpts from our WBS and WBS Dictionary
Work Breakdown Structure Work Breakdown Structure (excerpt)(excerpt)
WBS Dictionary - ExcerptWBS Dictionary - Excerpt
Excerpt of Project ScheduleExcerpt of Project Schedule
Risks on the Railway ProjectRisks on the Railway Project
Our project offered us a unique opportunity to learn about a variety of interesting risks. Here are some of the risks we faced: Business in Venezuela involves fraud and corruption. Venezuela has a strong rainy season that may vary in length. Natural disasters, including storms and mud slides, occur
frequently. The political, economic, and financial situation is unstable. Crime, particularly robbery and kidnapping, is common. Internet access is not reliable in remote parts of the
country. It may be difficult for us to obtain skilled workers.
Risk StrategyRisk Strategy
Our risk strategy consisted of the following: Create a preliminary Risk Checklist. Create a Risk Breakdown Structure. Built on the checklist using quantitative risk analysis
to create a more developed Risk Checklist with risk causes, probability and impact numbers, and risk scores.
Used the probability and impact numbers from the developed Risk Checklist to create a Probability Matrix.
Create Risk Ranking based on risk scores for each risk.
Risk Breakdown StructureRisk Breakdown Structure
•Similar to a WBS, the RBS provides a visual way of systematically identifying risks in detail. •Risks are organized into categories and sub-categories.•We used our developed Risk Checklist and the categories we identified to create our RBS.
Developed Risk ChecklistDeveloped Risk Checklist
Risk Probability MatrixRisk Probability Matrix
Using our risk scores, we developed a Risk Probability Matrix.The matrix serves as a visual tool for determining which risks fall into the low, medium, and high risk categories. We decided on the following ranges:
Low = < 23Medium = 24-44High = 45 <
Top 10 prioritizedTop 10 prioritized RisksRisks
Project Number Team # 3
Date 8/26/2008
Project Title National Railway System
Project Manager Raisa Spector
Risk Number Risk Category Risk Name Probability Impact Risk Score Risk CauseResponse Plan Y/N Responsible Party
33 External-Damage Fraud, embezzlement 7 8 56 financial Y20 External- Theft Equipment or material have been stolen 7 6 42 local people going through hard economic times Y21 External-Damage Major unexpected damage to Equipment 7 6 42 poor maintenance of equipment Y31 Project Management-Scope Requirements change 6 7 42 requirements creep Y29 Project Management-Scheduling Failure to meet project schedule 6 6 36 schedule delay Y38 Technical- Requirements Faulty electric system 4 8 32 electrical Y10 Organizational-Resources Kidnapping of staff 5 6 30 increasing number of kidnappings in the corporate world Y16 External- Weather Early start of the rainy season 5 6 30 bad judgment by weather forecasters Y17 External- Weather Rain season extends 5 6 30 bad judgment by weather forecasters Y23 External-Subcontractors and Suppliers Equipment not ready 5 6 30 schedule delay Y
Surveying task may not provide reliable mapping.
Risk Checklist
See You On The Railroad!See You On The Railroad!
The Members of Team 3The Members of Team 3
Raisa Spector – PM Roberto Mosciovecchio Mark Sanbower
Omar MahmoudDavid Saavedra Suzanne Smith
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