Transcript Winnipeg’s Water Treatment Plant

Managing Risks for
Winnipeg’s
Water Treatment Program
Presented by
Tom R. Pearson, P. Eng, Project Director
Agenda
Background
Project Profile
Project Status
Winnipeg’s Policy on Risk Management
Key Issues
Initial Risk Assessment
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Process
Outcome
Ongoing Risk Management
Management of risks – Examples
Benefits of risk management
Questions
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Background – Council’s Decision to Treat
In 1993 Council
- Accepted the recommendation to undertake
water treatment within a ten year time frame
- And established a Water Treatment Reserve
Between 1995 and 1999 a comprehensive
program of monitoring, pilot testing and
engineering studies was undertaken
In 2000, Council adopted a recommendation
that Winnipeg proceed with a water treatment
program
This decision was supported by public
consultation, public health officials and the
opinion of an “expert panel”
(low risk – high consequence)
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Background - Specific Objectives
Reduce the risk of a waterborne disease
outbreak caused by chlorine-resistant
microorganisms
Reduce chlorine disinfection
by-products
Meet the Canadian Drinking Water
Quality Guidelines
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Background - Plant Location
Winnipeg River
Natalie Lake
ONTARIO
Pinawa
Winnipeg
Assiniboine
River
Deacon Reservoir
Ross
Falcon Lake
Shoal Lake
Watershed
Intake Boundary
Kenora
Main Aqueduct
Red River
SHOAL LAKE
(Indian Bay)
McPhillips Reservoir
and Pumping Station
MANITOBA
Tache
Booster
Station
MINNESOTA
Bra
nch
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Wilkes Reservoir and
Hurst Pumping Station
MacLean Reservoir
and Pumping Station
Deacon Reservoir
and Booster Station
Main
Aqueduct
Branch II
Existing Water Supply System
Figure 3-1
exsys2bw
0512_cgs
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Background - History
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Profile - Our New Treatment Plant
Located at the Deacon
Reservoir Site.
Design Life projected to
be 2040
Maximum Finished
Water Production– 400
ML/d
Average Finished Water
Production – 254 ML/d
Minimum Finished
Water Production – 100
ML/d
Total cost now
projected at $300
Million
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PROFILE - AERIAL VIEW FROM SOUTH WEST
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Profile - The Water Treatment Process
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Project Status
Detailed Design is underway,
concurrent with construction
Design will wrap up this year
About $55.3 Million spent
Overall, we have committed about
$192.2 Million to date
The $300 Million budget projection
appears to be “secure”
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Risk Management in Winnipeg
In June, 1999 the City Auditor recommended to Council
pursuant to a review of the Main Norwood Bridge, that
“We must ensure a corporately focused and risk-based
approach to managing major capital projects.”
Policies and governance concerning risk are the
responsibility of the Chief Financial Officer
Administered under the auspices of the Corporate
Controller
All large projects ($10 Million or more) must report each
quarter to the Committee on Fiscal Issues, outlining
project status, emerging risks and steps to mitigate
Reports are reviewed by a Major Capital Committee
before submittal to the Committee on Fiscal Issues
Risk management is identified as a deliverable in project
Terms of Reference
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Key Issues
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Environmental Issues
Organizational Issues
Market Conditions
Schedule
Finances
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Environmental Effects Assessment
An Environmental Effects Assessment study of
the effects the water treatment plant identified
no adverse effects.
The study was voluntary –not required by
regulators.
The results were shared with stakeholders and
Manitoba Conservation.
Two Public Open Houses were held in
Springfield;
All substantive issues were addressed.
The Environmental Effects Assessment study
reduced project risk, and improved the quality
of the project.
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Organizational Issues
This is a large complex project with four major
consulting firms working from geographically
diverse locations
Coordination/communication through
“ERoom”
Construction Management and “Fast Tracking”
lead to risks and cultural issues for City and
Consultants
Hiring and training of certified operators in
time for commissioning and start-up (2008 by
Council mandate) will be challenging
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Market Conditions
Many large new projects will be going
to market over the scheduled
construction period
A period of high inflation within the
construction industry is forecast
(time = money)
A shortage of qualified contractors and
personnel is anticipated
We must make this an attractive project
for contractors
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Aggressive Schedule
April 2005
Finish preliminary design
and environmental effects
study
Spring 2005
Started building the water
treatment plant
Fall 2008
Start testing the plant
End of 2008
Begin operating the plant
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Finances
The original water treatment program budget was
$214 million to build the WTP and $12.75
million/yr to operate
Council has approved an additional $13.3 million
for risk mitigation initiatives and $2.8 million for
shops/staff consolidation (Total budget now at
$230.1 Million)
The current rate model will provide about $117
Million in cash financing
Projected cost is now $300 Million and additional
borrowing will be required
Once the plant is up and operating, revenues from
water sales are sufficient to cover operating and
debt servicing without extraordinary increases to
water rates
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Initial Risk Assessment
Undertaken after preliminary design,
before starting detailed design
2-day workshop format
Pre-workshop preparation;
survey of participants’ concerns
orientation concerning risk assessment
methodology and terms
Facilitated by S.M.A. Consulting Ltd.
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Workshop Participants
23 in total, in addition to SMA staff
City – 9
Earth Tech – 5
UMA – 5
EPCOR – 3
TetrEs – 1
Participants were divided into 5 groups
that considered specific types of risks
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Group Assignments
1: Identify potential problems with the design.
2: Risk analysis focused on design of treatment
processes, and mechanical equipment etc.
3: Risks analysis focused on operations including
commissioning, resources, operations, responses
to disastrous situations, contingency planning etc.
4: Risks associated with project coordination,
project management, schedule, staging,
estimating, cash flow, and external factors.
5: Risks associated with constructability,
underground work, construction logistics, staging,
tie-ins, and contracting strategies etc.
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Quantifying Risk Factors – 4 Steps
1. Determination of the likelihood of the
factor being encountered (e.g.
probability, or a subjective descriptor)
2. Determination of the magnitude of the
impact if the factor is encountered (e.g.
dollar value or a subjective descriptor)
3. Determination of the overall severity of
the factor by multiplying the likelihood
(1) by magnitude (2).
4. The factors are then grouped based on
the overall severity score and risk
responses are developed
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Step 1 - Determination of Likelihood
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Step 2 – Determination of Magnitude
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Step 3 - Determination of Severity
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Step 4 – Develop a Risk Response
Possible actions include:
Reduce uncertainty by obtaining more information.
(This may lead to a re-evaluation of the likelihood and
sometimes the magnitude.)
Eliminate or avoid the risk factor by partial or
complete modifications to proposed ideas, a different
strategy, etc.
Transfer the risk element to other parties.
Insure against the occurrence of the factor if possible.
Abort the project if the risk is intolerable and no other
means can be undertaken to mitigate its damages.
A planned response must be developed for all
risks.
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Outcome
120 risk items were identified by
workshop participants
These were synthesized into 44
project issues and 33 design issues
by the Risk Consultant.
Some of the risks were “Serious” to
“Critical”
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Ongoing Risk Management
The risk management plan defines
specific tasks to be undertaken to
mitigate the risk
Responsibility and timelines for the
tasks are assigned
Follow up on the risk factors is
undertaken on a regular basis until the
project is complete.
Risks are monitored on an ongoing
basis by the project risk team and
reviewed at monthly meetings
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Risk -Public Involvement
The public open house (or action by a
resident or RM) could result in additional
requirements to mitigate perceived risks
or nuisance or the need to file an
Environmental Impact Statement. Then
the project will be impacted.
Assessment: L: 10; M: 50; S: 500
Recommended Action:
1- Open House
2- Environmental effects assessment
3- Continued communication
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Risk – Impact of Floodway Operation
Floodway operation may impact early
stages of Construction particularly bulk
excavation. Impact is increased
potential of base heave from till layer;
increased pore pressure affecting slope
stability.
Assessment: L: 20; M: 15; S: 300
Recommended Action:
1- Stop excavation at 50% depth
2- Install pump wells
3- Pile first / excavate after - cost
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Risk – Long Duration Power Outage
If a power outage occurs then the DBPS
pumps will stop and water supply to the
city will be harmed
Assessment: L: 10; M: 50; S: 500
Recommended Action:
Could add backup power for partial UV and
chlorination (chlorine - $2M at deacon,
backup power $3). Come up with boil water
strategy and potential for delay with
regulators.
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Outcome – Chlorine
Risk analysis: The probability of an
accident resulting in a catastrophic
release of chlorine gas from a rail tank
car is very unlikely, but the
consequences are disastrous and may
include injury or death to City personnel
and the general public.
Recommended that this risk be
eliminated or reduced. Additional capital
funding of $7.3 million required for onsite sodium hypochlorite generation,
and operating costs will increase by
$74,000 per year.
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Outcome – Power
Risk analysis: The probability of a long duration
power failure which would cause depletion of
potable water storage and result in the need to
supply untreated water is very unlikely, but the
consequences are severe and include the need
to boil water to ensure health safety during the
power outage.
Recommended that the risk be eliminated.
Additional capital funding of $6.0 million
required for increased standby generation
capacity, and operating costs will increase by
$90,000 per year.
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The Benefits of Risk Management
Quality
Credibility
Cost
Value
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Questions?
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