Risk Planning and Management for the Panama Canal Expansion
Revista : NSF Construction Engineering Conference, Blacksburg, Virginia, September 2010.Tipo de publicación : Conferencia No A*
Abstract
In April 2006, the Panama Canal Authority formally proposed a major expansion of the Canal
to increase its capacity and make the Canal more productive, safe, and efficient. This proposal included
cost and schedule estimates for completing the expansion and was supported overwhelmingly by the
citizens of Panama in an October 2006 public referendum. Given the conceptual level of design at the
time of the proposal and the inherent uncertainty in a project of this magnitude at the early stages of
engineering, a comprehensive risk analysis was performed to develop a contingency model for the
total expansion program cost and schedule. This contingency model is based on a Monte Carlo
simulation of the cost and schedule estimates taking into account the most significant risks identified
for the project. The resulting model provides contingency assessments for duration and total cost and
sensitivity analysis of the risks; it also allows for multiple scenario planning, and ultimately supports
overall risk management. This paper presents a project case study that focuses on the contingency
model development and the resulting risk management and contingency resolution processes.