Balancing risk for town centre development
Jacqueline Hughes, senior risk analyst at Equib, discusses how project managers for town centre developments can get their risk management strategy right
Transport infrastructure projects such as HS1 and Crossrail are promising to improve access to major conurbations and support town centre regeneration. However, managing projects in densely-populated areas can bring increased risk.
A robust risk management approach
To optimise results from project delivery, a robust and professional risk management approach is vital at all times, not least when activities are being carried out within built-up areas or adjacent to buildings where large numbers of people live or work. The risks associated with such projects must be carefully assessed and mitigation strategies put in place, whilst keeping a close eye on cost and time constraints.
Factors such as high living costs and the desire for an improved quality of life are encouraging more people to live in well-connected suburbs, on the outskirts of towns and cities. With large-scale transport infrastructure projects such as and Crossrail aiming to enhance accessibility, developers and planning departments are increasingly focused on complementary urban regeneration projects to ensure local communities have the amenities they need.
Among the key challenges involved in managing urban projects is the greater range of risks and benefits that need to be taken into account. Often, these go beyond the common project management ‘triangle’ of time, cost and quality. For example, some urban megaprojects aim to raise the economic status of the local community by providing employment within the labour supply chain.
Similarly, as part of their reputational risk management, projects may need to develop a detailed community engagement strategy to keep local people and businesses updated on the potential impacts of project delivery. This may involve activities such as letter drops, webinars, community workshops and establishing specific lines of communication for any project-related queries or concerns.
Another area which should be considered from the outset of a project is the risk of delays linked to planned disruption of transport and logistics networks, and the need to gain consent from relevant local operators. For example, if road closures are required and a local council will only permit these at night, this could delay progress and increase costs. Timely project delivery may also be put at risk by the need to comply with Section 61 of the Control of Pollution Act 1974, which involves local councils setting strict barriers for noise pollution. This could affect the hours when construction activity is permitted, and the types of equipment that can be used onsite.
Negotiation and collaboration
To successfully mitigate the wide-ranging risks linked to town centre development, strong negotiation skills and joined-up thinking are essential. Such projects often involve and require project managers to get buy in from a large number of different stakeholders, including local MPs and council members, transport operators and local businesses and residents. As well as conducting effective stakeholder mapping, effective communication skills are vital in order to strike a balance between their various needs, and the project’s key deliverables.
As part of this, it’s also important for project managers have a strong understanding of the regeneration project’s business case and specific objectives. While every project will inevitably involve a number of possible risks, some will be less critical to the required project outcomes, which means mitigation efforts and spend could be focused elsewhere.
Risk tolerability calculations, which determine the acceptable level of risk for a particular project, can prove a useful decision-making tool when agreeing how much money should be spent. One method of making such calculations involves scoring a range of risks in terms of their probability and impact, and multiplying the two values to get an overall score for each one. By setting the project’s upper limit, any risk scores exceeding that level will require investment in mitigation measures. Alternatively, project managers can assess the need for additional spend by comparing the cost of business-as-usual activity alongside the cost of alternative mitigation activities. These findings, overlaid with an awareness of the level of perceived risk, can help project managers to decide where to focus any additional spend.
Using BIM to support risk management
Wider application of BIM or Building Information Modelling, which involves the creation of a detailed digital description of every aspect of a building or project, could also help to support risk management on urban regeneration and development projects. Allowing project managers to integrate 3D models with time and cost data, these systems could help to improve efficiency, access to reliable data insights and de-risk the planning process, project delivery and operations. Despite Government’s focus on ensuring centrally-procured projects are at least BIM Level 2-compliant, a lack of understanding about the technology’s full capabilities is still inhibiting adoption.
With factors such as the struggling state of the UK high street emphasising the need for investment in town centre development, the demand for skilled project managers to mitigate the risks associated with such projects is bound to increase. Keeping a close eye on project objectives and considering risk tolerability at every stage, will enable project managers to deliver such projects successfully and safely.
Balancing risk for town centre development