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By T Atkinson, A Cobb, R AJIington

Risk management is concerned with the whole spectrum of financial, geological, engineering, legal, governmental, social and occasionally ethnic issues, concerned with mining projects. The inherent risks in mining operations are well publicised, but new issues and hazards arrive on the scene and lake precedence, but the older risks still remain, while insurance cover may not he ‘full cover’ in the future. It has long been recognised that quantitative approaches to risk analysis can play a major role, but although these methods are capable of considerable theoretical precision, the lack of sound risk input data and experienced personnel limits the usefulness of theoretical analysis. It can, however, greatly assist in comparing cases, in identifying areas of risk and help in the investment decision process. Its major contribution to a mining project is that it imposes an investigative discipline that also assists in improving the quantitative approach to risk analysis and hence risk management. Risk analysis and risk management also requires sound common sense and major inputs from experienced geologists, mining, mechanical, electrical and mineral processing engineers. The Engineering Council, in 1992, issued a ten point code of professional practice entitled ‘Engineers and Risk Issues’ (The Engineering Council. 1992), covering our professional responsibilities, the law, our conduct, the need for a systematic approach to risk issues, the use of professional judgement, communications, risk management, evaluation of risk, our professional development in this field and the encouragement of public awareness of risk issues. This is a specific area of training perhaps long neglected by our industry and academic institutions (Atkinson. 1983).

Jan 5, 1996

By Andy Thompson, Frank Perrone

"As part of the Metropolitan Transportation Authority’s $10.5bn East Side Access Project in New York, 3,200 m of tunnel had to be constructed in rock, mix face and soft ground conditions beneath one of the largest passenger railroad junctions in North America, handling over 780 trains per day. The use of risk based decision making tools was essential in developing the bespoke contract framework that was adopted as well as making informed decisions once excavation commenced. This paper will outline the risk management process adopted, discuss the risks and mitigation strategies adopted and comment on the impacts of this approach on the as built Project cost and schedule. In particular, the paper will outline the unique approach used to establish the baseline against which the Contractors performance would be measured as the selection of a Slurry TBM to excavate the tunnels was considered to compromise the effective use of a Geotechnical Baseline Report. BACKGROUND AND CHALLENGES Contract CQ031, Queens bored Tunnels and Structures was awarded in September 2009 to a joint venture of Granite Northeast/Traylor Brothers/Frontier Kemper (GTF JV) for $717.6m following a negotiated procurement process. A robust approach was taken with regard to the management and payment for risks associated with the construction of these tunnels. Risk assessments were carried out during the design phase and a risk register was developed prior to procurement. During the procurement phase close attention was paid to ensuring that the allocation and pricing of known risks, together with mechanisms for managing future risks were clearly defined between the MTA and GTF JV.In comparison to the excavation work in Manhattan, which was performed in competent hard Manhattan schist, the tunnels in Queens were excavated predominantly through soft ground with a high water table and complex environmental conditions. Not only did this require the use of pressurized face TBM technology, a first in New York, but also a re-evaluation of the contractual mechanisms used to manage the hard rock excavation contracts for their appropriateness to the soft ground tunnel work."

Jan 1, 2016

By Emily Rose

The concept of risk management is applied to multiple aspects of the mining lifecycle including safety, mine design, business plan—anything that affects getting the ore to the mill for production. However, risk management is not a topic that can readily be taught in universities. Many situations require knowledge gained from experience to know how this impacts current and future operations. Recent graduates, who must develop and apply decisions based on geotechnical monitoring, likely have not developed “operational experience” and may not be aware of options and typical applications. Thorough resources that explain different monitoring systems, and when and how to implement them, are available for geotechnical professionals. Accessibility to this information can often cause information overload, leaving one unsure of where to start, without knowing where to start. This paper is intended to serve as a high-level overview of development practices, levels of risk, and risk tolerance for entry-level geotechnical and mining professionals who do not come from a geotechnical background. Summarized detail on typical monitoring practices, types of instrumentation, and how to communicate what the data indicates to key stakeholders are provided.

Feb 22, 2026

By Iain G. Bruce

The need to improve supply reliability while improving our environmental record during the past half decade of low metal prices has required the mining industry to prioritise expenditures. Quantitative Risk Assessments using third party reviewers and specialist risk management teams have assisted in identifying hazards that can both disrupt supply and impact the receiving environment. Graphical displays using risk ellipses can simplify the presentation of the results in a Probability-Consequence (PC) graph. Development of risk acceptability envelopes using readily available financial data superimposed onto the same PC space assists management to prioritise their risks and focus on risk reduction measures. Development of this system and examples of the successful implementation of the system from several recent projects are described.

May 1, 2003

Risk management has taken on renewed vigor since the economic crisis of the late 2000s. The resources of governments, individuals, and corporations are being stretched to a point where only the most promising projects move forward. Risk management is a crucial part of the decision making process, yet it remains a broad term that includes disciplines from engineering to finance. A collaborative effort will be necessary to ensure that the most auspicious and appropriate projects are the ones moving forward. Risk management can be quantified to an extent by comparing the likelihood of an instance with the result of consequence of the instance occurring. In this manner it is possible to assign risk factors to instances and ultimately, begin to associate monetary value to the instance. Carbon sequestration is an emerging field that has a number of unique challenges. Risk management and mitigation must be an integral part of the overall picture. This begins with the planning and design phase, continues through implementation and production, site closure, and does not cease until termination of liability. The ability of carbon sequestration projects to successfully assess, mitigate, and recover from leaks will be a decisive characteristic of overall success. The costs of mitigation and failure will need to be analyzed on a test level, but will still need to be reliable enough to extrapolate to a commercial level operation. This paper will build a risk management profile based on case studies and field tests in Tennessee and Virginia. These tests are scheduled to commence in late 2013 and consist of small-scale injection tests in unconventional storage reservoirs with an emphasis on enhanced coalbed methane (ECBM) recovery and enhanced gas recovery. The ultimate goal will be to provide a clear and concise direction to move carbon sequestration from the test phase to commercial scale. While it is necessary from a risk management perspective to analyze all risk points, the scope of this paper will focus on pre-injection risk assessment for carbon dioxide (CO2) leakage potential. Despite the differences between the two tests, CBM compared to shale among other differences, a framework for analysis and mitigation can be developed pertaining to leakage risk. The probability of each type of failure will be assessed and analyzed, and plans to mitigate or reduce these risks will be reviewed.

Aug 1, 2013

By Moreno Pescara, Luca Soldo, Piergiorgio Grasso

"Risk management in tunneling is more important today than it was a few years ago, considering increasing demands for safety and environmental and socio-economic sustainability, which are now required by citizens, owners, lenders, and insurers. Moreover, our current risk management philosophy should not only address risk avoidance and mitigation, but should also be used as a means of value creation, benefiting the overall project. Given the strategic implications of risk management, the authors intend to present, in this paper, a comprehensive overview of references and experiences from current practice—e.g., what is missing or weak, as well as possible or necessary developments that can have a key role in implementing effective risk management, particularly for a project’s design and construction phases. Therefore, as God has set some things in broad daylight; as he has given us some certain knowledge, though limited to a few things so, in the greatest part of our concernments, he has afforded us only the twilight, as I may so say, of probability (John Locke) PREFACE Many large-scale engineering and construction projects suffer millions of dollars in cost overruns, delays in design and construction, and operability troubles once finally completed (Edward W. Merrow, 2011). The undesired effects of these problems can become disastrous for large-scale megaprojects (those that typically cost US$1 billion or more), particularly considering that these are increasingly used as the preferred delivery model for infrastructure (Bent Flyvbjerg, 2014), often in public-private partnerships (PPPs). McKinsey G.I. (2015) has estimated that bridges and tunnels average 35% in cost overruns, and roads 20%. Some of the values published by Flyvbjerg (ibidem, 2014) for projects with relevant underground elements are the highest, with cost overruns from 60% to 300%. The analysis of 32 other case histories (from 1994 to 2010) given by Hartmut, R. (2011, IMIA Annual Conference, Amsterdam) indicates an average increase of costs around $55 million, with a 20-month average delay."

Jan 1, 2016

By Kevin Cunningham

"Litigation resulting from neighboring structures with settlement and/or lateral movement or improper pile design and faulty soils engineering analysis, are a multi-faceted opportunity for law firms. These types of claim scenarios are an attorney’s dream, and can obliterate a Deep Foundation Contractors profit and more importantly, can be avoided with a progressive approach to risk management in design and project management.The following (4) case studies will be examined and dissected to discern certain lessons learned for risk management solutions to avoid these deep foundation related challenges in the future.1) Pipe Flotation – Soil Conditions Not Anticipated in Specifications or Contract2) Easement Encroachment – Easement Dimensions Not Recognized Until Completion of Project3) Subjacent Lateral Support – Neighboring Structure Wooden Pile Unprotected Causing Structure to Settle4) Improper Pile Placement - Construction & Design Caused Retail Store to SettleSpecific Deep Foundation project challenges involving: buoyancy calculations regarding subsurface soil characteristics, design factors taking existing subsurface sewer line easements into account, structural instability as result of excavation causing exposure/heavy rainfall to existing wooden piles supporting adjoining building and improper pile location resulting from faulty pile design will be described with risk management recommendations to avoid these challenges in the future.From the very start of construction on any project deep foundation and excavating work poses numerous engineering and technical challenges for developers, contractors and engineers. Dealing with changing or hidden conditions is one of the most difficult challenges facing any contractor or engineer on a project. Relying on incomplete or inaccurate engineering reports is another common problem. Other challenges include dealing with technical errors or oversights that are deeply embedded in the project specifications or bid process.No matter what is the origin of the problem or how it manifests, deep foundation contractors, design professionals and engineers should be ever-mindful of good risk management practices that can prevent serious disputes that can result in costly litigation."

Jan 1, 2015

By M Bezzina

In 1995 Standards Australia International Limited æSAIÆ published a risk management standard titled AS/NZS 4360 Risk Management. It was the first such standard published by a recognised formal standards body anywhere in the world and it put Australia at the leading edge of the risk management discipline. Many Australian and international organisations have utilised the risk management standard and it is one of SAIÆs most important and popular standards. Since its publication in 1995, the risk management standard has gone through a major revision in 1999 and is currently undergoing another such review, which is due for completion in 2004. This paper will chart the application of the standard within certain key organisations since its inception in 1995. A brief overview of the methodology behind AS/NZS 4360 will be presented as well as an overview of supporting and related standards. It is prudent to base risk management and other management system issues on existing and tested standards rather than creating new proprietary approaches. Examples of areas in which the risk management standard might be applied in the mining industry are given, subject to the specific operations of each company: technical, commercial, environmental, informational, and safety and regulatory.

Jan 1, 2003

By A. Moergeli, Philip Sander, John Reilly

"SUMMARY While the basic elements of risk management, including probability, consequences, risk registers, mitigation measures, etc., are now well understood, the process to include correlation, dependencies and linkage of risks and risk scenarios is less well defined and not well understood. To perform accurate and complete risk analysis and risk management, it is necessary to include correlation, dependencies and linkage between risk events, as well as risks that may occur multiple times. In this way, owners and contractors can more accurately determine risk-based costs, risk impacts and risk mitigation strategies. This paper will outline methods to deal with correlation, dependencies and linkage and will consider risks that may occur multiple times. Practical result comparisons – with or without these elements – will be presented. INTRODUCTION We believe the reader is familiar with basic concepts of risk, risk management and mitigation and the use of probabilistic cost-risk processes versus deterministic ones (Reilly et al. 2015; Sander et al. 2015). The probabilistic approach, compared to the simpler and more common deterministic approach (unit prices times unit costs plus a contingency), offers more useful information with respect to the range of probable cost as well as cost “drivers” and better quantifies the effects of risks, opportunities and variability – which improves understanding, leading to a better potential for profit (or loss) for contractors and added value for owners. In this context, a valid and sufficient quantification of correlation, dependencies and linkage of risk events, plus the impact of risks that may occur multiple times, is essential. Components of Cost Estimates – Base Cost, Risks and Other Uncertainties The components of cost that need to be correctly addressed in an estimate include (Moergeli et al. 2015): •,Base costs – the costs that will result if “all goes according to plan” (Reilly 2004) •,Risk costs – the resulting costs of threat and opportunity events, if they should occur •,Escalation costs – costs resulting from normally expected inflation with variability •,Other uncertain costs – costs that result from other events, normally external to the project team’s control, which may include unanticipated events, politically related changes and “black swan” events (Talib 2007)"

Jan 1, 2016

By B. N. Conley, K. D. Luxbacher

"The underground coal mining industry in the United States has recently seen the occurrences of several high profile, multi-fatality events. The explosions that occurred at the Sago Mine in 2006, the Darby Mine in 2006, and the Upper Big Branch Mine in 2010 have caused a ripple in an otherwise steadily improving safety record. These events transpired in the midst of an unprecedented level of government regulations and modern safety technologies. The recent increase in fatal events in conjunction with a minimal decline of both fatal and non-fatal injuries over the past decade may signify that current safety practices have reached a level of diminishing returns. Risk management, a safety approach that has been successfully applied in various industries including mining across the world, may provide a means to surpass the safety plateau in the U.S. RISKGATE is an Australian risk management program for mines that shows great potential for application in the U.S. However, fundamental differences between the coal mining industries in Australia and in the U.S. prevent direct implementation. This paper discusses aspects of the RISKGATE body of knowledge that require some adaptation before this program may be applied to the U.S. mining industry. INTRODUCTION The underground coal mining industry in the United States has recently seen the occurrences of several high profile, multi-fatality events. These events transpired in the midst of an unprecedented level of government regulations and modern safety technologies. The recent increase in fatal events in conjunction with a minimal decline of both fatal and non-fatal injuries over the past decade may signify that current safety practices have reach a level of diminishing returns. In order to combat this stagnation in performance, a modification to the manner in which the mining industry approaches worker safety may be warranted. The implementation of a risk management based approach presents a potential method for not only surmounting the current safety plateau but also for achieving the long desired objective of zero harm. RISKGATE a risk management body of knowledge designed for the Australian mining industry that shows great potential for application in the U.S. This paper discusses aspects of the RISKGATE body of knowledge that require adaptation before implementation in the U.S. mining industry. These adaptations are based on differences in operating practices and governmental regulations. This discussion will focus on the three major U.S. risk areas of explosion prevention, ground control, and moving equipment."

Jan 1, 2015

By J. A. Restrepo, K. D. Luxbacher

"The U.S. underground coal mining industry has recently seen the occurrences of several multifatality events that have interrupted an otherwise steadily improving safety record. These events transpired even with an unprecedented level of government regulations and safety technologies. These events may indicate that current safety practices have reached a level of diminishing returns. Risk management, a safety approach that has been successfully applied in numerous industries including mining, may provide a means to overcome this plateau. Riskgate is an Australian mining risk management program that may be successfully applied in the United States. However, fundamental differences between the Australian and U.S. coal mining industries prevent direct implementation. This paper discusses aspects of the Riskgate body of knowledge that require adaptation for its application in the United States. IntroductionThe underground coal mining industry in the United States has recently seen the occurrences of several high profile, multifatality events. These events transpired in the midst of an unprecedented level of government regulations and modern safety technologies. The recent increase in fatal events in conjunction with minimal declines in fatal and nonfatal injuries over the past decade may signify that current safety practices have reached a level of diminishing returns. In order to surpass this plateau, a modification to the manner in which the mining industry approaches worker safety may be warranted.The implementation of a risk-management- based approach may potentially provide a means for not only surmounting the current safety stagnation but also for achieving the long-desired objective of zero harm.Riskgate is an Australian risk-management- based body of knowledge that shows great potential for application in the United States. This paper discusses aspects of the Riskgate body of knowledge that require adaptation for the U.S. mining industry. The proposed adaptations are based on differences in operating practices and government regulations. This discussion will focus on the three major U.S. risk areas of explosion prevention, ground control and moving equipment."

Jan 1, 2015

By J. Duran

Mining at Newmont Mining?s Phoenix?s Mine is currently done by surface operation in the Fortitude and Bonanza pits at a combined rate of approximately 100 kt/d (110,000 stpd). A portion of the orebodies targeted by these pits was mined previously by underground mining methods, dating back to the mid-to late-1800s. Most of the underground workings (voids) are located in the west central area of the Bonanza pit. The surface operation requires excavation through voids, and there is a risk of pit floor subsidence that has to be addressed. This article presents a review of the risk mitigation measures that were implemented to reduce risks to people and equipment working in the area.

By Rob Herr, Irwan Halim, Heather Marsh

This project will expand sanitary sewer within the City of Columbus. It consists of 2.5 mile long, 72-inch finished diameter pipe grouted inside 10.8-foot diameter tunnel excavation in shale. This paper describes the multi-faceted geotechnical exploration to minimize the underground risks. The tunnel will cross below a buried valley with minimum cover of highly weathered rock. The risk mitigation to cross the valley includes contingencies and cost allowances. Provisions to prevent impact on adjacent groundwater resources will be described. Latest construction updates will be provided including contractor alternate shaft support and pre-excavation probing to mitigate tunneling risk below the valley.

Jun 23, 2024

By Wayne W. Murdy

Since 1993, Newmont Mining has been growing through the development 'q of three major foreign mining operations with a fourth under construction. The first project, Yanacocha in Peru, began operating in October 1993. This occurred at a time when political and business risk in that country was considered high. In 1995, Newmont began operating the Muruntau joint venture in Uzbekistan. It is the first mining project of its kind in the Confederation of Independent States (CIS). In early 1996, Newmont started operating the Minahasa Mine in Indonesia. In early 1997, Newmont began construction of a $1.9-billion project in Indonesia. The company is also completing a feasibility study with its partner for the development of a gold operation in Mexico. All of these projects have been considered "risky" by most standards. Newmont has been successful in all of them through risk mitigation programs. These programs include using strong and successful in-country partners, concentrating on developing a strong national workforce with minimal expatriate employees, using World Bank, European Bank for Reconstruction and Development (EBRD) and International Finance Corp. (IFC) financing and building and maintaining strong ties with host governments.

Jan 1, 1997

By Wayne W. Murdy

Since 1993, Newmont has been actively growing through the development of three major foreign mining operations with a fourth under construction. The first project, Yanacocha in Peru began operating in October 1993 at a time when political and business risk in that country was considered high. In 1995, Newmont began operating the Muruntau Joint Venture in Uzbekistan, the first of its kind in the CIS. In early 1996, Newmont started operating the Minahasa mine in Indonesia. Now, in early 1997, Newmont is undertaking the construction of a $1.9 billion project in Indonesia and is completing a feasibility study with our partner for the development of a gold operation in Mexico. All of these projects have been considered "risky" by most standards, and Newmont has been very successful in all of them through risk mitigation programs including utilizing strong and successful in-country partners, concentrating on developing a strong national workforce with minimal expatriate employees, utilizing World Bank, EBRD and IFC financing and building and maintaining strong ties with host governments. This paper describes in more detail, some of the risk mitigation programs that Newmont has used to successfully grow the company through development of major foreign mining operations.

Jan 1, 1997

By P. Sander, M. Spiegl, J. Reilly, A. Van Droogenbroeck

Although the outdated idea of calculating risk as the deterministic product of its likelihood and impact is not entirely a thing of the past, a multitude of organizations have adopted the usage of probabilistic methods for risk analysis, as they better reflect the inherent uncertainty of cost and risk estimates with ranges. But are these advancements sufficient in a complex environment such as tunnelling projects, where inadequate modelling of cost and risk can result in estimate discrepancies that run into millions of dollars? This paper explores two advanced probabilistic modelling techniques for tunnelling projects. The first one demonstrates how the cost and schedule uncertainty related to changes in excavation and support classes can be modelled with correlated variables. The second example models the risk related to explosive ordnance clearance on construction sites using a probabilistic event tree.

Dec 1, 2022

By K. Bounou, K. Komnitsas

"Risk quantification may be used as a sustainable development index in the mining industry, since it encompasses both economic and social factors. In addition, it may assist in the development of a framework, which is also indirectly related to sustainable development, to prevent accidents and improve health and safety standards. However, risk quantification in the mineral sector involves diverse activities and is considered a very difficult task. Although statistical data report accident severity rates, incident rates and accident frequency rates, none of these allow for accurate risk calculations. In this paper, two risk calculation formulas, which may be used to quantify risk, as well as to identify hazardous activities in a workplace, are proposed. Numerical examples are given based on statistical data available through the MSHA database. Also a combination of a decision/fault/event tree that allows risk quantification is presented."

Jan 1, 2005

By Salam Moubarak, Thomas Camus

"INTRODUCTION Since the introduction, several decades ago, of the first concepts of tunnel boring machines (TBMs), the unremitting increase of mechanized and automated tasks and the reduction of manual tasks carried out by human operators have gone hand in hand with the continuous improvement of these machines. In the present state of TBMs, the replacement of worn cutting tools is a critical, tedious, and dangerous manual operation especially for earth pressure balanced (EPB) and slurry TBMs. For such pressurized TBMs, hyperbaric interventions are used. They consist in replacing the pressurized soil/mud inside the chamber with compressed air that balances the face pressure. The operators can then ""dive"" into the chamber; however, because the human body cannot naturally undergo pressure changes, they have to follow strict procedures that have been developed for subsea divers, based on decompression stops. Indeed such interventions are actually quite often performed by professional deep-sea divers. The pressurized TBMS are consequently equipped with a manlock that allows for the required compression and decompression cycles. Hyperbaric interventions increase risk to the operators and require long decompression procedures that increase the TBM idle time and reduce its efficiency. At higher pressures, over 3.5 bar (ITA Report No 10, 2011), specific equipment and special gas mixes and/or saturation techniques are recommended (Lamont, 2012). Such procedures are even more expensive and time consuming although the duration of work in the pressurized area can be very limited for health and safety reasons. Contractors are therefore increasingly interested in automating these operations to reduce the risks to human workers and improve the TBMs performance. Moreover, the demand for new, ambitious and challenging tunneling projects (very deep, high pressure boring) is ever increasing, but the supply of suitable TBMs is limited and the risk from working in the hyperbaric environments becomes increasingly unacceptable. Impact of hyperbaric interventions The UK Health & Safety Executive has analyzed the consequences of working in intermediate pressure compressed air. The retrospective study of decompression illness (DCI) indicated that at certain pressures its incidence was around 2% of all exposures. More worryingly it showed that over 20% of the exposures commonly undertaken by shift workers in tunneling (those over 1 bar pressure for 4 hours or more) resulted in DCI. It was concluded that on some contracts up to 50% of shift production workers experienced DCI at some time during the contract, a situation which was considered to be wholly unacceptable (Lamont, 2006)."

Jan 1, 2016

By David J. Hatem

Tunnels and underground projects are inherently more risky than vertical projects, which typically utilize more conventional design and construction approaches and are undertaken in the context of relatively ascertained and defined conditions. On tunnel and under-ground projects, there are a host of special risk factors, including unknowns and uncertainties as to the physical and behavioral characteristics of the ground, the inextricable interdependence and necessary interaction of design decisions and construction means and methods with those ground conditions as well as the manner in which risks are allocated among project participants for un-anticipated subsurface conditions. Public-private partnerships (PPP) projects, in their own respects (and independent of any major subsurface component), pose significant risk for all private sector participants. The main driver of owners to procure projects using PPP is financial, as often all, or substantially all, of the design and construction risk are transferred to the private sector consortium, including the design-build (D-B) team. For a concerning number of those public owners, that risk transfer regime includes rather onerous and aggressive contractual terms that allocate to the private sector participants substantially all risks associated with the encountering of unanticipated subsurface conditions. These aggressive risk allocation provisions, while directly impacting project participants upstream of the consulting engineer, have an indirect and corresponding risk intensifying effect upon consulting engineer professional liability exposure. There are many factors that result in increased professional liability exposure for consulting engineers involved in PPP projects. The more prominent and prevalent of those factors fall into the following categories:

By Eivind Grøv

"INTRODUCTION Tunneling and underground excavation is related to handling of uncertainties, risks associated with geological conditions are significant and ‘unexpected geological conditions’ often claimed. This fact was brought to the table long ago, and ITA (the International Tunnelling and Underground Space Association) published its 25 Recommendations on Contractual Sharing of Risks in 1988 (Ref. 1). This public-cation constitutes an important asset to the tunneling industry in terms of being a guideline for those working with contractual issues, even today almost 30 years after being published. A more recent document is the ITIG code of practice for risk management of tunnel works from 2015 (Ref. 9). Various countries or geographical regions have their own view and tradition on risk sharing and tunnel contracts. In Scandinavia unit rates contracts are most commonly used with bid-build model, it shares risk between owner and contractor, owner retains the risk for geological conditions while contractor carries risk for performance efficiency. Rock strengthening is determined assessing rock mass quality encountered at tunnel face. Grouting is applied to stem water. Actual quantities may differ from the contract’s BoQ but a flexible contract with remuneration is installed to enable adjustment of actual quantities. Variations of quantities involve a clause to adjust construction time. Unit price contracts deals with expected and foreseen still ‘unexpected geological conditions’, if the ‘unexpected’ element results in variations in quantities. Work activities have quantities and ‘standard capacities’ for regulation of construction time. Variations in quantities are expected in tunnelling and hardly deserve the term ‘unexpected’. If truly unforeseen geological features necessitate work not included in the BoQ, then the contract must be supplemented and can be said to be inappropriate. Fixed price contracts may not provide the intended predictable cost and is as such also inappropriate in the view of a risk sharing principle, once the geological baseline proves to be incorrect. ‘Adjustable fixed price’ contracts, combining unit rate and fixed price, may prove suitable."

Jan 1, 2016