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UBC Theses and Dissertations

Analysis of the economic risks caused by environmental issues in large infrastructure projects De Zoysa, Garumuni Niranjan Sanjaya


The objectives of the research described in the thesis are the identification and characterization of environmental issues associated with large infrastructure projects which affect the project's economic performance, and the development of a framework that will enable the analysis of the uncertainty in project economic variables caused by such issues. The focus of the research is on the natural environment. The risk analysis framework is developed with the aim of enabling project proponents and other stakeholders to identify, characterize and quantify environmental risks during the project appraisal stage. The risk identification process is based on the use of an extendable checklist or register of probable risks. This risk register acts as the starting point of the identification process, as well as a knowledge base that can be utilized on projects of a similar nature. The risks are categorized into 4 types based on the effect of environmental issues on project work packages. The categorization allows the selection of a suitable quantification method for the risks. Monte Carlo simulation and influence diagrams are employed in developing the quantification methods for the four risk types. Quantification of the economic variables is carried out by considering them in terms of their decomposed primary variables. Adjustment coefficients that represent the effect of external uncertainties are utilized in quantifying the cost and duration uncertainty of work packages subject to external uncertainty factors. Influence diagrams are used both to represent, and as an aid to quantifying such external uncertainty factors. The Pearson family of frequency curves is used to characterize the input distributions to the quantification process while the rank correlations between the primary variables are evaluated by considering their transformations into uniform variables on the unit interval [0,1]. A parameter of the joint distribution between the transformed variables is used to assess the rank correlation coefficient. The information elicitation process developed to obtain the information required for the quantification process makes use of decomposition, the use of directed questions, and appropriate feedback to elicit information of high quality from experts. The uncertainty associated with the economic variables is represented in a form suitable for incorporation into the overall project decision making process. This final output of the framework should help to enable the effective appraisal of the risks posed by environmental issues to the economic performance of the project.

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