Effective January 1, 2022, David Nagy, MBA, P.Eng. has been appointed Associated Engineering’s National Practice Lead for Alternative & Major Projects and will help lead and support our continued success in pursuing and delivering on major and alternative delivery projects with our public sector clients.
David originally joined Associated Engineering in 2015, as the Manager of the Bridge group in our Calgary location. He holds a Bachelor’s degree in Civil Engineering and a Master’s of Business Administration. Over his 18-year career, David has completed many transportation projects, including bridges, roads, tunnels, and airports, and also provided engineering on water intakes and treatment plants.
We cannot avoid the need to manage risks. With continuing growth, aging assets, the pressures of climate change, and limited resources, managing physical assets has become ever more challenging in both the public and private sectors. We intuitively know that these circumstances create risks – economic risks related to asset failure and inability to fund essential maintenance or service and environmental-related risks such as interruptions to water supply, loss of use of facilities, or pollution events and contamination of the environment.
Our brains have been wired to evaluate risks, understand trade-offs, and make decisions about course of action. We process this type of information every day, for example, when and how to cross a busy street or whether to send our kids to school during this COVID-19 pandemic. Clearly everyone takes a different view of risk, as you see a variety of behaviours with regard to these activities. We each have our own risk appetite or internal risk threshold. We make different decisions because we individually have a different backdrop of experience and knowledge. These can significantly influence the decisions and judgement calls we make.
As risk machines, we are not all equipped to deal with the complexities of today’s society. In our own lives, we often make decisions on the fly. However, when we are responsible for more extensive asset portfolios, like a process facility or an entire town or city, the level of complexity has increased way beyond what most of us can process in our heads.
We can say to ourselves, “it worked last time so I am sure it will work again” and allocate budgets based on what we did last year. Or we can process what is front of mind – “The homeowners just told me about the ponding water on their street, we should go fix that storm drain”.
The reality is, this intuitive risk management approach to decision-making not only creates public health and safety concerns, but may also cost society more money. We may not notice the risks slowly building up. For instance, in a pump station, there may be a number of human behaviours that mask the risks. Consider an operator who has lovingly cared for a facility, keeping it running smoothly, managing all the little nuances of operation, putting in overtime or being the hero when things go wrong. The operator may also be masking a risk that could cause significant impact when they go on vacation or retire. Or the operator could be masking avoidable costs, that have just become the norm.
Back to the storm drain, what if we spend money fixing it, not realizing there is another drain in far worse condition, that will have far greater impacts, and cost ten times more to fix if we don’t do something immediately.
To see through these complexities, we require more evidenced-based systematic approaches to manage risks to our assets. If we want to provide transparency to customers or the public, we need to provide evidence and information applied in a consistent and clear manner in our decision-making.
In our next edition, we will explore how organizations can manage the complexity, use information, and make informed risk-based decisions.
About the authors:
Owen James, M.Sc., ENV.SP, CWEM, MIAM is our National Practice Leader for Asset Management. He has over 25 years of experience developing and implementing Asset Management capability for organizations in Canada and the United Kingdom.
This is the continuation of a two-part article. View part one here.
ISO 31000, the International Standard for Risk Management, provides a clear framework for managing risks, prompting us to think about the scope and context of the organization, what is important, and what we are trying to achieve. From that starting point, we can assess risks by identifying them, analyzing causes, extents, vulnerabilities, likelihoods, and consequences. With that information in hand, we can begin to evaluate whether risks need to be mitigated, how to mitigate them, and whether the mitigation strategies are a good use of public money. Of course, nothing changes without action and the implementation of risk treatments.
ISO 31000 also prompts us to consult with others throughout the process, communicate relevant information, monitor and review the effectiveness of our risk treatments, and record and report how well we are doing. This is, of course, all common sense, but how often do we systematically carry out all of these actions?
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AE Staff-Toronto/Markham, ON
Some risk principles are hinted at in the international standard, but more explicitly documented in other frameworks: in ISI’s Envision framework, some key principles associated with risk management make a significant difference in the robustness of the approach. These include:
Risk = Likelihood x Consequence: Likelihood, probability, chance, uncertainty – whatever you call it, this is a key dimension representing the level of uncertainty in risk. Consequence, extent, and impacts all represent the size of potential impacts. These two concepts are fundamental to risk assessment.
A Common Currency of Risk: While still not widely applied, humans are so used to dealing in money that it makes sense to express risk in economic terms. We continually hear about the cost of the latest disaster or the cost of congestion to the economy. We are able to more readily evaluate risk expressed in economic terms to the very tangible costs of dealing with risks. It makes sense to express risk in dollar terms.
Integrated and Holistic: Risk is a complex thing. We recognize that the causes may be many and varied and the consequences could be far-reaching. More robust approaches to risk management take a broad and integrated view of risk, and consider the economic, social, and environmental (or triple bottom line) implications.
Application: The opportunity to use this systematic process exists in almost everything that we do, whether it is community planning and management, asset planning, project delivery, or operational and maintenance activities. Project managers know it makes sense to apply a systematic approach to understanding potential project risks. Investment program managers need to be able to effectively prioritize capital programs that best manage the trade off between costs, performance, and risk.
AE provided upgrades to the 100 year old Scott Street Pump Station, including study, design and contract administration services.
Operationally, we may choose to apply the principles of risk in HAZOP (Hazard and Operability) or FMEA (Failure Mode & Effects Analysis) studies to improve operational and maintenance activities and better manage risk. More importantly, if we can take our inherent ability to understand risk and apply it to our day-to-day jobs, we can create a culture of more effective risk management. This has the ability to transform the health and safety culture of organizations, radically improve supply chains, and generate significant investment efficiencies or performance improvements.
At Associated, we bring our expertise to help organizations begin to understand the jargon and navigate the common-sense application of risk management that may initially seem complex. With a better understanding of risk and the ability to articulate risk, we can have a more convincing conversation with stakeholders, more robustly defend our decisions to the public, and more readily access funding from agencies that ultimately want to know we are doing the right thing.
About the authors:
Owen James, M.Sc., ENV.SP, CWEM, MIAM is our National Practice Leader for Asset Management. He has over 25 years of experience developing and implementing asset management capabilities for organizations in Canada and the United Kingdom.
The St. Paul Street Transformation project included five phases that transformed the road from a one-way street consisting of five lanes of traffic into a vibrant place with an improved pedestrian realm and spaces for patios. It demonstrates a complete approach to transforming the urban environment by also coordinating built form and investment. The phases included a performing arts centre, an arena, and Brock University’s School of Fine and Performing Arts; restoration of historic buildings, a pilot program for pop-up patios; and reconstruction of the street with wider sidewalks, patios, streetscaping, street furnishings. and pedestrian amenities.
“This streetscape gives more than it takes. It is a case study in placemaking – the design represents an incredible transformation to this section of the downtown. The project goes beyond streetscaping to embrace cultural and economic drivers that have revitalized the downtown.” – Jury
“Combined with recent investments and buildings, the St. Paul streetscape prioritizes the pedestrian and urban experience. Visitors and residents are rewarded with a lively atmosphere, wide, tree-lined sidewalks, and restaurant patios to enjoy the growing restaurant scene.” – Jury
Our involvement on the project was delivered out of our Niagara office, with key involvement by Mark Belanger (project manager) and Mark Mascioli.
The Water Security Agency is responsible for managing water resources to ensure safe drinking water sources and reliable water supplies in the province of Saskatchewan. Over the past decade on the M1 Canal project, the Water Security Agency has been rehabilitating and upgrading the capacity of their water supply canals surrounding the Town of Outlook in west central Saskatchewan, southwest of Saskatoon.
This work was led by another consulting engineering firm, with different reaches being completed each winter. Associated Engineering has been heavily involved on other projects for the Water Security Agency. Valuing this relationship, the Water Security Agency asked Associated Engineering to provide assistance in developing an approach for engineering services for the $6 million Saskatoon Southeast Water Supply System Rehabilitation project. Associated Engineering responded, offering a modified design-build approach to fast-track the project to rehabilitate the water supply canal.
“The Water Security Agency respected our trusted relationship. Together, we worked through the challenges of a tight schedule and unique project delivery approach.” – Project Manager, Doug Thomson
The Water Security Agency’s prime objective was to upgrade and rehabilitate the existing canal which was originally constructed in 1969 and partially upgraded in 1995. They also wished to bring the canal up to current standards and increase the existing capacity from 6 to 8.2 cubic metres per second to allow more water supply to reach downstream users. The canal provides water to 20,000 acres of irrigated famland, six reservoirs, three potash mines, five towns and villages, and a provincial park. The canal is operational from May to October annually; therefore, all construction had to be completed outside of that time frame.
Our team began design of a 3.2 kilometre section of the canal in July 2020. We completed the 80% design Issued-for-Tender drawings the following month.
Project Engineer, Kristin Gray, says, “The original canal had two different surface treatments, unlined grass and a geotextile liner. In the rehabilitated design, in areas where seepage was a concern, a high-density polyethylene liner as well as gravel armour were used to extend the life span of the canal. In areas where seepage was not an issue, only armour was used.” The rock armour protects the canal from erosion, creating a sustainable design that will have a long life span.
This project informs the much larger Westside Irrigation project that Associated Engineering is delivering as an integral team member
To help fast-track the project, our team included representatives from the Water Security Agency in our weekly design progress meetings, which enabled them to provide timely review and input into the design. This collaborative approach helped to deliver a workable design and issue the tender within six weeks.
The tendering was unique as the contractor had to include an engineering firm in their bid to complete the design and provide resident and general engineering duties during construction; Associated Engineering was identified as a potential firm to complete the design. The selected contractor included Associated on its design-build team as we had completed 80% of the design. We were thus able to continue the design and construction phase through to substantial completion.
The main challenge faced in this project was the timeline. The usual timeline for the M1 construction season is for the contract to be awarded between July and August, allowing the contractor to secure land easements, borrow material and strip the site, so when the water is turned off at the end of September they can start construction.
On this project, the contract wasn’t awarded until late-October, with construction starting in early November. We worked closely with the contractor and the Water Security Agency to streamline the construction start process, so work could start immediately to move as much earth as possible before freeze up.
“Working with the contractor, our team determined design optimizations that could result in shorter lead times to get materials on-site, but also to improve upon the design/components that were used in the M1 canal rehabilitation.”
The contractor also provided important input on value added/engineering efficiencies to enable construction in the limited time window, leading to a working canal by Spring 2021. The Water Security Agency was very happy that the project was delivered on time and within budget and water flowed earlier than initially expected.
Our key personnel involved on this project included Doug Thomson, Kristin Gray, Jim Kells, Brady Marshall, Evan Latos, Nick Dodds, and Doug Olson.
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