LARGE ENGINEERING PROJECT RISK ANALYSIS

This paper describes the current status of SCERT (Synergistic Contingency Evaluation and Response Techniques). SCERT is an attempt to provide a systematic approach to the planning and financial evaluation of large engineering projects involving significant risks. Its mathematical basis is a decision tree/semi-Markov process representation of a project. This basis is integrated with qualitative risk assessment procedures. The emphasis is preplanning positive responses to potential contingencies, the need to get approximate answers to the right questions, and the need to integrate specialist expert opinion of various kinds and more general seasoned intuition. Discussions have suggested the need to synthesize the main methodological features of two projects undertaken during 1975. One was an assessment of the risks associated with alternative construction schedules for a gas pipeline from the high Arctic to the Canada-U. S. border. The other was an assessment of the risks associated with alternative bid packages for a fixed price contract to construct a thermal power station in Iraq. Development during 1977 has centered on a test-case application to a North Sea pipeline project.