IMS Risk Evaluation System for Financing and Insuring Tunnel

Projects

Ian McFeat-Smith1, Kevin Wayne Harman2

1
IMS Tunnel Consultancy Ltd, Hong Kong
2
Kumagai Gumi Co. Ltd, Hong Kong

ABSTRACT

A series of case histories of completed tunnel projects covering the widest range of tunnelling
methods, ground conditions and risks types has been used as a basis for identifying the nature of the
risks commonly encountered in major tunnel projects. This research was presented in previous work
by the writers (McFeat–Smith and Harman, 2003) together with a quality risk assessment system
recommended for use in conjunction with the IMS system. The present paper presents results from the
second stage of this research including identification of 15 key Risk Categories embracing 33 Risk
Types together with methodology and scoring format. This demonstrates how these are used to
identify and quantify Risk Types, Risk Category Scores and an overall Project Risk Level score. A
selected range of 17 case histories are back analysed to determine the strengths and weaknesses of the
IMS Risk Evaluation System that is intended for universal application to provide a unique guide to
the tunnelling industry for financing and insuring purposes.

1. INTRODUCTION

Tunnelling works have become progressively more risky, due to their increasing scale and
sophistication as well as the variability of the geological conditions in which they are being
constructed. This, coupled with risk avoidance by many Clients in Asia for example, is leading to a
high frequency of disputes and litigation over contract and insurances claims. As a result, new
initiatives are expected soon from insurers that will impact upon clients, designers and contractors
requiring a higher standard of risk management and the implementation of a new Code of Practice for
such works. (Anon, 2003) Whilst the new code is an important first step it needs to go further to help
the tunnelling industry identify, quantify and manage major inherent risks in tunnelling works today.

This paper draws upon experience from a wide range of case histories from tunnel projects mainly
around Asia (McFeat– Smith, 1998, 2000A, 2000B, 2001; McFeat – Smith and Harman, 2003) in
order to develop the IMS Risk Evaluation System. This system, used in conjunction with a quality
risk assessment system, can be employed universally to categorize the overall level of risk of any
tunnel project for financing and insurance purposes as well as providing a new approach to
identifying and evaluating such risks for tunnelling.

The value of this approach is that it helps the parties involved identify risks to such projects and hence
to work together to ensure that such risks are both fully controlled and mitigated. The proposed
system is thus complimentary to the new Code of Practice and can be used to support it’s overall
objective of reducing risks and insurance premiums for tunnelling projects worldwide.

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 It is intended that the IMS system be developed together with risk assessments first at the planning
stage; refined at the design stage; and again at various stages of construction as recommended in the
Code of Practice. All parties’ views are required in order that ownership is as wide as possible and it
is recommended that an independent consultant is appointed to help ensure that the risk evaluation
system is completed fairly, knowledgeably and independent of stakeholders interests.

2. SCORING METHODOLOGY

Scoring forms are provided in the Appendix. An assessment of each of the 33 Risk Types is carried
out for each tunnel section or tunnel contract. If details are not yet available, particularly at the early
stages of projects, a score of 16 is to be applied. Intermediate scoring is not generally recommended
but may be applied where a Risk Type falls between two descriptions. A score is made for all Risk
Types and the results inserted in a spreadsheet that calculates: R1 - Risk Types scoring 17 – 25; R 2
scoring 10 – 16; number of high Risk Category scores (>12); and the overall (Project Risk Level)
score. The latter is simply the summation of all Risk Type scores as shown on Table 1.

The 11 case histories in adverse ground analysed previously together with a further 6 case histories of
tunnelling works in more favourable conditions are described in Table 1 together with an indication
of the extent of delays to the overall contract programme experienced. Each project has been scored
as described above. It is to be remembered that these risk levels are assessed before mitigation
measures are applied and hence opportunities exist to significantly reduce them by improved
engineering practices. From the above back analysis it is considered that a Project Risk
Category can reasonably be drawn up as shown on Table 2. The overall scoring system is
observed to work well, clearly delineating between different levels of risk in these tunnel projects.

3. REPORT FORMAT

In order to obtain all necessary information for this assessment the IMS Risk Evaluation System is to
be implemented in conjunction with a quality Risk Assessment System as recommended previously.
The following report format is recommended:

3.1 General Project Risk Level

This section of the report is to be developed mainly for financing and government approval purposes.
An assessment of the overall Project Risk Level is recommended together with a list and explanation
of High Risk Categories and how mitigation measures for each is to be achieved. Guidance for the
timing, implementation and cost and programme impacts of each measure needs to be identified.

3.2 Project Risk Evaluation And Assessment

This section of the report is to be developed primarily for insurance, client vetting and engineering
purposes. It requires a summary of both the Risk Types as per the IMS System and project specific
risks from the Risk Assessment System. A full list of proposed Risk Mitigation Measures and a Risk
Action Plan is required identifying the parties responsible for each mitigation measure and the timing
of implementation of such measures. i.e. in terms of work yet to be undertaken to reduce the levels of
risk to acceptable levels.

As a general target the parties involved should work together to attempt to reduce the Project Risk
Category to the intermediate risk level. In such an event it would be reasonable for insurers to apply
lower premiums for projects that can be demonstrated to achieve lower levels of risk.

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 Table 1. Summary Scores for Tunnelling Projects in Both Adverse and Competent Ground

Case History Approx No. of High No. of Overall Overall

Delay R1 (R2) Category High Score Risk
( months) Risks Scores Scores Category
>12
Adverse Ground Cases
Drill and Blast Collapse 4 8 (3) I, II, IV, V, 5 371 High
Due to Low Rockhead (estimate) VIII
Collapse of NATM Highway 24 13 (8) II-IV, VI, 11 541 Very High
Tunnels in Soft Sedimentary VIII-XIII,
Terrain and Worked Coal Seam XV
Collapse of Raise Bored Shaft in 12 11 (6) III,-VI, VIII, 7 447 High
Faulted Ground - IX, XI,
Roadheader Withdrawn Due to N/A 6 (6) III, IV, VIII, 7 334 Intermediate
Hard Rock (by sub-contractor) IX, XI, XIII,
XV
Horizontal Directional Drilling in 3 12 (3) I, III-V, VIII, 8 443 High
Gravels below River - Collapse XI, XIII, XV
Sub-aqueous Tunnelling – 12 12 (9) I, II, V, VIII- 10 516 Very High
Drilling and Grouting ahead of XI, XIII-XV
Open TBMs
Open TBM in Large Fault Gouge 0.1 6 (6) IV, V, VIII, 4 340 Intermediate
Zone IX
Single Shield 10m Rock TBM in 9 13 (6) I-V, VIII, X, 10 517 Very High
Urban area below Buildings XI, XIII, XV
Double shielded TBM in 2 10 (4) III-V, VIII, 7 377 High
Mountainous Area in Converging IX, XIII, XV
Hard Rock
EPB Tunnelling in Mixed Soil 0.1 4 (12) I, II, IV, V, 8 349 Intermediate
Faces in Developed Area VII, XI, XIII,
XV
EPB Tunnelling in Mixed Hard >4 13 (7) I-V, VII, 10 493 High Risk
Granite/ Soil Faces in Developed VIII, XI,
Area XIII, XV
Competent Ground Cases
Drill and Blast for Aqueduct Nil 1 (1) X 1 197 Very Low
Tunnel in Competent Tuffs and
Granites
Hard Rock TBM in Long 1.5 2 (6) V, VIII, IX, 3 287 Intermediate
Aqueduct with Major Water
Inflows
Double Shielded TBM in Long 6 months 2 (3) IV 1 241 Low
Drainage Tunnel in Granites ahead of
programme
Open Shield with Compressed Nil 1 (4) I, V, XIII, 4 233 Low
Air Tunnelling in Busy Area XV
Drill and Blast of Long Highway Nil 2 (6) IX, XI 2 272 Intermediate
Tunnels in Rock in Semi-Urban
Area
Metro Station Cavern in Granite Nil 2 (7) IX, XIII,XV 3 277 Intermediate

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 Table 2 General Guide for Assessment of Project Risk Category

Project Risk Level Overall Score Indicative No of High Indicative No of R1

Risk Categories ( >12) Level Risk Types
Very Low < 200 0-2 0–2
Low 200 – 249 3–4 3–4
Intermediate 250 – 349 5–6 5–6
High Risk 350 - 499 7–8 7 – 12
Very High * > 500 >9 > 12

4. CONCLUSIONS

The IMS Risk Evaluation System consisting of 15 Risk Categories and 33 Risk Types has been
developed from the writers’ experiences and a data bank of over 50 major projects largely undertaken
in Asia covering all aspects of tunnelling activities and related risks.

The system has been tried and tested by evaluation of all 17 case histories including three very high
risk , five high risk, six intermediate risk and three low to very low risk tunnel projects. This check
has demonstrated that the system works well in terms of providing a simple overall assessment of the
Project Risk Level, Risk Categories and Risk Types. This approach guides the user towards
identification and evaluation of real engineering risks to be mitigated when conducting risk
assessments for the project. A relatively simple reporting format is indicated to provide separate
sections for finance and insurance purposes.

A request is made to insurers to continue the momentum created by the new code of practice for
tunnelling by applying lower insurance premiums for projects where the parties involved can
demonstrate that they have worked together to significantly reduce Project Risk Levels to acceptable
standards.

5. REFERENCES

Anon, 2003. A joint code of practice for the procurement, design and construction of tunnels
and associated underground structures in the United Kingdom. The Association of British
Insurers and the British Tunnelling Society, Draft, September 2003.
McFeat-Smith, I. 1986. The use of ground classification systems for payment purposes in rock
tunnelling. Proc. Int. Symp. on Large Rock Caverns, Helsinki, pp. 693-704,
McFeat-Smith I. 1998, Mechanised Tunnelling in Asia. Published IMS Tunnel Consultancy Ltd.
Hong Kong November www.imstunnel.com
McFeat-Smith I. 2000A, Breakthrough in the Philippines, June, July Issues, Tunnels and Tunnelling
McFeat-Smith I. 2000B Risk assessment for tunnelling in adverse geological conditions in Asia.
Proceedings of ICTUS, TUCS, Singapore
McFeat – Smith, I. 2001 TBM selection for control of water ingress and face stability for tunnelling
in the widest range of geological conditions. Proceedings of ICTUS, TUCS, Singapore
McFeat-Smith I. and Harman K. 2003.Risk management systems for tunnel projects in Asia, To be
published November – Decemberer 2003, Tunnels and Tunnelling,

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 APPENDIX Score Forms

I Terrain
Risk Type Risk Evaluation Score
1 Type & Cover Intensely built -up area or sub-aqueous with very shallow cover (<1D). 25
Urban area or crossing with low cover (1-2D) 16
Semi populated areas with intermediate cover (>2D) 9
Rural areas with intermediate cover. 4
Mountainous areas with deep rock cover. 1

II Constraints
Risk Type Risk Evaluation Score
2 Adjacent Structures Tunnelling in soft/mixed face conditions below buildings 25
Close to multiple structures 16
Close to few structures 9
Highways and/or minor structure 4
None 1
3 Man made constraints Clash between tunnel and existing vulnerable structures/ 25
utilities/constraints
Structures or constraints highly susceptible to damage or to affect works 16
Occasional man-made constraints – medium risk 9
Ancient / remote / constraints unlikely to be severely affected or effect 4
works.
Few or none. 1

III Site Investigation

Risk Type Risk Evaluation Score
4 Extent of Ground None or inadequate 25
Investigation Poor - insufficient 16
Moderate – just sufficient 9
Good – reasonably targeted 4
Intensive – comprehensive and well targeted to risks 1

IV Ground Conditions
Risk Type Risk Evaluation
Score
5 Ground Mass Very poor e.g. IMS rock class 5B, extreme mixed ground; rockhead at 25
Characterisation tunnel crown; regions of high seism city; very high insitu stresses
(rock and soft ground Poor – e.g. soft ground with boulders/ low rockhead cover 16
tunnels to be classified Intermediate e.g. soft ground or variable rock – moderate risk 9
using IMS rock or soil Low risk –e.g. consistent soft ground or moderate rock 4
classes) No risk e.g. competent rock tunnel 1
6 Variability Major variations / impossible to predict accurately 25
Highly variable – high risk 16
Intermediate – moderate risk 9
Consistent generally easy to predict 4
Highly consistent 1

V Water Issues
Risk Type Risk Evaluation Score

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 7 Predictability No local precedence - much uncertainty creating very high risk 25
of Inflows Difficult – variable inflows 16
Intermediate – moderate risk 9
Small risk 4
Consistent or low flows Likely 1
8 Water tightness Very unlikely to be achieved 25
Specifications Difficult to achieve 16
Intermediate – moderate risk 9
Low risk 4
Very easy to achieve 1
9 Likely Impact of Extreme risk – major impact 25
Inflows in terms of High impact anticipated 16
Ground Movements, Intermediate – moderate risk 9
Disposal, Tunnel Low risk 4
Instability No impact expected 1

VI Design & Specification

Risk Type Risk Evaluation Score
10 Design Inappropriate 25
Quality Poor quality, overly complex or simple, 16
Adequate – moderate risk 9
Good robust design 4
Excellent design, robust, well thought out, easy to apply 1
11 Specifications Very Poor, lacking in insight to works 25
Poor standard for job at hand 16
Intermediate – moderate risk 9
Good quality 4
High quality, state of the art, well thought out 1
Cannot or will not be applied 25
12 Implementation No design representation on site 16
of Design and Specifications Intermediate – moderate risk 9
Reasonable representation on site – likely to be applied 4
Original designer specifically employed on site to implement on site 1

VII Complexity of Works

Risk Type Risk Evaluation Score
14 Access or Ease of Spoil Very poor access – large risk 25
Disposal; (consider access via High access difficulty 16
shafts and long tunnels). Intermediate – moderate risk 9
Reasonable access – little risk 4
Good access from multiple locations 1
15 Layout / Highly complex – multiple faces 25
Number of Working Faces Complicated 16
Intermediate – moderate risk 9
Reasonably simple – no significant risk 4
Very simple 1
16 Number and complexity of Highly complex – high interference likely 25
Interfaces Complex works 16
Intermediate – moderate risk 9
Few interfaces – no significant risk 4
None 1

VIII Tunnelling Methods

Risk Type Risk Evaluation Score

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 17 Ground Control Extreme – outcome uncertain 25
Requirements High risk due to difficult ground 16
Required – likely to be effective - moderate risk 9
Some GT required – likely to be effective 4
Not required 1
18 Support/ Large Span Unprecedented, extremely wide or difficult 25
Difficulty Large span / high difficulty 16
Intermediate - moderate risk 9
Low to intermediate –little risk 4
Small diameter – no risk 1
19 Excavation Extreme difficulty e.g. mixed faces 25
Difficulty Difficult to excavate 16
Intermediate – moderate risk 9
Little difficulty or risk 4
Very easily excavated 1
20 Degree of Sophistication or Extreme – very high risk 25
Mechanisation of Works High 16
Intermediate – moderate risk 9
Low – small risk 4
None – very simple 1
21 Applicability Incorrect method (s) 25
Not considered to be best method available 16
Reasonable method but others also applicable – intermediate risk 9
Likely to be best method 4
Considered to be only method applicable 1

IX Precedence/
Experience
Risk Type Risk Evaluation Score
22 Precedence of Type and Unprecedented internationally 25
Scale of Works Unusual internationally and unprecedented Locally 16
Not Common – moderate risk 4
Common – no significant risk 9
Very common 1
23 Contractors Experience of None internationally by contractor 25
Type and Scale of Works None locally by Contractor 16
Some experience by Contractor – moderate risk 9
Contractor has reasonable experience – no significant risk 4
Contractor highly experienced in works 1

X Management
Risk Type Risk Evaluation Score
23 Management No formals systems in use 25
Systems System developing with partial implementation 16
( includes System implemented but results not obvious 9
management of Developed, practiced with some results 4
sub–contractors) Developed, practiced and produce results 1
24 Site Culture Autocracy. Limited communication. Not following company/site procedures. 25
Little leadership or communication and compliance with company/site 16
procedures
Average leadership, communication and compliance with company/site 9
procedures.
Good leadership, good communication and pursuing continual improvement. 4
Learning organisation, good communication, respected leadership and 1
continuous improvement part of culture

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 XI Contract
Risk Type Risk Evaluation Score
25 Quality of Very poor, inappropriate for job, allocation of risks unclear 25
Contract Poor quality – many ambiguities 16
Documents Just Sufficient – moderate risk 9
Good standard 4
Excellent quality, well structured, clear and easy to implement 1
26 Partnering Partnering is not allowed - strict pursuit of contract conditions. 25
(general attitude Parties accept partnering in principle but reluctant – strict focus on contract rather 16
towards mutual than problem solving.
co-operation) Client passively involved in partnering – but lacking experience. 9
Client actively involved in partnering but lacking experience. 4
Client participates in partnering and encourages broad involvement. 1
27 Risk Sharing All risks are transferred to the Contractor 25
Risk sharing occurs but biased in favour of the Client 16
See McFeat– Equal client specified distribution of risks 9
Smith, 1986, Risks are allocated to party most able to manage them 4
1998 Client assumes all risks 1

XII Commercial A
Risk Type Risk Evaluation Score
28 Cost of Project Relative to Extremely high 25
Funds Available to High 16
Contractor / Client Intermediate 9
Intermediate to low 4
Low 1
29 Value of Project Relative Extremely high 25
to Previous Works High 16
Undertaken by Contractor / Intermediate 9
Client Intermediate to low 4
Low 1

XIII Commercial B &

XV Programme B (33 Construction Delay Risk as a Percentage of Overall Programme)
Risk Type Risk Evaluation Score
30 Commercial Risk as a Very High 51 – 100% or greater 25
% of Tender High 26 – 50% 16
(From Risk Assessment) Intermediate 16 – 25% 9
Low Risk 0 - 15% 4
Nil 1

XIV Programme A
Risk Type Risk Evaluation Score
31 Quality: No programme / prepared by hand 25
Level of Detail and Poor quality or inappropriate 16
Mode of Preparation Intermediate – moderate risk 9
Good programme 4
High level of detail and understanding - state of the art software 1
32 Contribution to Client sets programme with only one person input 25
Programme Insufficient - few people with limited consultation 16
Intermediate – Moderate risk 9
Input by involved parties with distribution of responsibility 4
Contractor or collective group with collective responsibility 1

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