Banedanmark Signalling Programme

Banedanmark Signalling Programme Managing risks in the Signalling Programme IDA Risk Conference 6th of June 2013 Gunnar Lohmann and Lars Frisk Te...
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Banedanmark Signalling Programme Managing risks in the Signalling Programme

IDA Risk Conference

6th of June 2013

Gunnar Lohmann and Lars Frisk

Teaser

How has Risk Management been an integrated part of the Signalling Programme, which saved 4,8 billion DKK during contracting – and how will Risk Management be used further on

in order to secure the savings remain.

Agenda •

Introduction to the Signaling Programme



Key risks to the programme



Procurement strategies



Procurement execution



Outcome of procurement



What are the key risks today?



Presentation of applied Risk Management Process and System.

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Danish signalling needs to be renewed now Banedanmark is the owner of DK railway infrastructure: • Replacement • Maintenance • Operation 60% of all signalling will exceed absolute final service-life within 15 years Life of DK- ATC expires in 2020 It takes 10-12 years to renew all signalling assets. More systems have risk of serious breakdowns even today. 50% of today’s train delays are due to signalling failures.

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Two different systems Conventional network (Fjernbanen): •

ERTMS 2 and modern centralized signalling infrastructure and onboard

S-banen:



Modern metro/urban system - CBTC

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Time schedules Phases Fjernbane and S-bane

2009

Fjernbane 2021

S-bane 2020

2010

2011

Procurement (2.5 years)

Procurement (2 years)

2012

2013

2014

Design (3 years)

Design (2 years)

Test (1.5 years)

2015

2016

2017

Test (3 years)

2018

2019

2020

Roll-out (4 years)

Roll-out (4 years)

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2021

2022

Financial key figures

Total renewal of all assets

Central government reserve 30% Total costs

Fjernbane

S-bane

11,4

3,1

3,4

0,9

14,8

4,0

All figures in Billion DKK

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Activities improving the infrastructure are closely related

The Signalling Programme



Enables new projects



Influences timing of other projects



Reduces costs of other projects



Potentially delays other projects



Must be planned in close cooperation with other projects



If delayed: serious risk for other projects in general !!

In focus the coming years–in addition to the SP

Copenhagen – Ringsted Landworks in relation to Fehmarn Belt fixed link Freight corridor between Sweden and Germany Electrification The ”1-hour Model” The side lines

Key risks to the programme Top of mind in the programme and procurement phase •

Achieve political buy in to the SP



Build an organisation within BDK, capable of executing the SP



Achieve real competition during tendering and high quality contracts



Failure in system integration



Poor collaboration during execution



Delays in safety approvals

Procurement strategy •

Early dialog with suppliers and supplier analysis



Functional and performance based requirements: let the Supplier supply existing well proven systems



Minimum development risk approach.



New operational rules: remove national monopoly barriers



Negotiated procedure



Keep all prequalified bidders in the game until the end



“Sell” BDK as reasonable customer



Strong mindset of transparency and equal treatment



Risk must be placed with the party best able to mitigate it



BDK overall responsible for system integration



Large contracts



Fixed scope/time/price contracts

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Procurement strategy - continued Design Build Maintain contracts – 5 to 25 years of maintenance •

2 Contracts on main & regional lines (East and West). Possibility of same supplier for East and West excluded



1 Contract for on-board main & regional rolling stock

In addition a number of other contracts (GSM-R, Civil work etc)

TMS Coordination by suppliers

East contract

West contract

All supply & implementation from track to TMS

Rolling stock contract

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Procurement execution The tendering process a.

Prepare tender material, including peer review

g.

Adjustment of tender material

h.

BAFO (Best And Final Offer)

b.

Prequalify bidders

c.

First Negotiation Tender

d.

Evaluation

i.

Negotiation with each awarded supplier

e.

Clarification meetings

j.

Contract signing

f.

Negotiations divided into topics

No short listing

Determining negotiation strategy Listen – explain and find solutions together Cable ducts Hidden installation

Risk for theft and vandalism Collateral

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Procurement execution - continued Structured price feed back •

Preliminary tender prices evaluated



6 bidders, each providing a bid for the East and the West contract



Benchmark: average of the 3 overall cheapest bidders



Process cleared by Kammeradvokaten

Step 1: Analysis of all prices submitted Step 2: Meeting all suppliers to ensure consistency between price submitted and contents of each cost figure are comparable Step 3: Analysis of each supplier compared to the benchmark

Step 4: Meeting on all major cost items with suppliers. Cost and tech experts. 10 meetings per supplier

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Procurement execution - continued Structured price feed back - what did suppliers say Above benchmark: Clear challenges Below benchmark: Good news ! But the benchmark will move downwards. Feed back: •

Clear pointers of where the price challenges is



Cost team used this towards their internal departments



Management shared the feed back to top management



Some areas lead suppliers to do more analysis and optimize the bid & price

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Outcome of procurement



2x6 competitive bids submitted for the Main Line (Fjernbanen)



Well below target budget. Contract signed January 2012 with Alstom for East and with Thales-BBR for West



5 bids submitted for On-Board. Within Target budget



Contract signed with Alstom March 2012



There is a high degree of similarity between the contracts, enabling good contract management



Post contract signing a consultant within procurement has assessed one of the contracts and reached the conclusion that the contract is well drafted and very comprehensive

Overall: A reduction in the overall SP budget of 4.8 billion DKK has been made, to a large extent due to savings from the Fjernbane contracts

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What are the key risks today? •

Failure in System integration



Rolling stock is not ready in time



Failure in education of TOC personnel (e.g. train drivers)



One of the Suppliers (East, West, On-board or CW, GSM-R, STM, FTN, ESB) is delayed impacting other Suppliers



Interdependencies with other projects (e.g. Electrification programme and 1-hour model)



Duration of level crossing approvals are more time consuming than expected.



Delays in safety approvals



Development of advanced functionalities

Presentation of applied Risk Management Process and System.

Agenda • Overall Purpose of Risk Management • Risk Objectives and Basis

• Risk Organisation • Risk Ownership • Risk Management Process • Risk Register • Risk Reporting

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Overall Purpose of Risk Management



Identify risks, that may have significant influence on a given projects objectives



Reduce the risks



Put risk on the agenda



Risk acceptance

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Risk Objectives and Basis •

Cost (budget and life cycle cost)



Time (delay)



Quality (channel punctuality)



Based on the principles from Prince 2 and MSP (Managing Successful Programmes)

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Organisation to handle risk management in SP Fjernbane Railway Programme Dir. incl. Sec., Programme and Contract management

Programme Risk Manager

Fjernbane Project East

Fjernbane Project West

On-board Fjernbane incl. STM

Supplier's

Supplier's

Supplier's

Risk Manager

Risk Manager

Risk Manager

Project

Project

Project

Risk Manager

Risk Manager

Risk Manager

EMO, ESB, FTN, MCP, Safety, GSM-R

CW, OI, PMO, SPOR20, OHS, Training

Project

Programme

Risk Manager

Risk Manager

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Principles for risk ownership

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Risk Management Process –

All external risk reporting outside the Signalling Programme is controlled by Programme Management.



All internal risk reporting is only controlled at project level.

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Main view – add/edit risks and opportunities

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Fjernbane status (2013-06-05) Risks

Controls (risk reducing measures)

New

67

Open

178

Closed

179

Discarded Total

78 502

Possible

159

Planned

127

Ongoing

325

Done

748

Discarded

118

Total

1477

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Risk reporting 1. Monthly one-page risk status from each project. 2. Monthly risk status at programme level to Programme Management. 3. Quarterly risk status report

to Programme Board 4. Risk status to Ministries when requested.

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Lars Frisk ([email protected] and [email protected]) Gunnar Lohmann ([email protected])

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