VENEZUELA NATIONAL RAILWAY PROJECT Venezuela National Railway Project

VENEZUELA NATIONAL RAILWAY PROJECT

Venezuela National Railway Project Controlling Project Costs and Risks Summer 2008 Kugan Panchadsaram Projecto La Torre Incorporated Raisa Spector, Omar Mahmoud, David Saavedra, Mark Sanbower, Roberto Mosciovecchio, and Suzanne Smith

Project Background Our company, Projecto La Torre Incorporated, has been contracted by the ministry of infrastructure of the government of Venezuela to construct 5 miles of railway embankment at a remote location in the state of Guarico (8 hours Southwest of the capital city, Caracas). This project is part of the initiative by the government of Venezuela to expand the national railway system as stated in Venezuela’s constitution of 1999.

Project Requirements and Characteristics 5 miles of railway embankment constructed Recruiting workers for the project Construction of temporary infrastructure (dorms, cafeteria, office, and storage) 9 months to complete the project Financing the project $4, 000 budget

Venezuela Republica Bolivariana de Venezuela Capital City: Caracas Language: Spanish Area: 353, 841 square miles Population: 28, 199, 822 GDP: $335 billion (30 th in the world) Major Export: Oil Popular Sports: Baseball and Soccer

Railroads in the Jungle

Team Contract Our team contract states how we will work and communicate with each other on the project. All team members helped write the contract and all team members signed the contract.

Project Scope Statement Scope statement is a document that defines the project and lists what must be accomplished. It states the boundaries of the project - what will done and what won’t be done on this specific project.

Work Breakdown Structure (WBS) and WBS Dictionary The WBS divides major project deliverables into smaller, more manageable components. The WBS was done to level 3. The WBS Dictionary explains all terms, especially potentially confusing terms, to anyone reading the WBS. The following slides contain excerpts from our WBS and WBS Dictionary

Work Breakdown Structure (excerpt)

WBS Dictionary - Excerpt

Excerpt of Project Schedule

Risks on the Railway Project Our project offered us a unique opportunity to learn about a variety of interesting risks. Here are some of the risks we faced: Business in Venezuela involves fraud and corruption. Venezuela has a strong rainy season that may vary in length. Natural disasters, including storms and mud slides, occur frequently. The political, economic, and financial situation is unstable. Crime, particularly robbery and kidnapping, is common. Internet access is not reliable in remote parts of the country. It may be difficult for us to obtain skilled workers.

Risk Strategy Our risk strategy consisted of the following: Create a preliminary Risk Checklist. Create a Risk Breakdown Structure. Built on the checklist using quantitative risk analysis to create a more developed Risk Checklist with risk causes, probability and impact numbers, and risk scores. Used the probability and impact numbers from the developed Risk Checklist to create a Probability Matrix. Create Risk Ranking based on risk scores for each risk.

Risk Breakdown Structure • Similar to a WBS, the RBS provides a visual way of systematically identifying risks in detail. • Risks are organized into categories and sub-categories. • We used our developed Risk Checklist and the categories we identified to create our RBS.

Developed Risk Checklist

Risk Probability Matrix Using our risk scores, we developed a Risk Probability Matrix. The matrix serves as a visual tool for determining which risks fall into the low, medium, and high risk categories. We decided on the following ranges: Low = < 23 Medium = 24 -44 High = 45 <

Top 10 prioritized Risks

See You On The Railroad!

The Members of Team 3 Raisa Spector – PM Roberto Mosciovecchio Mark Sanbower Omar Mahmoud David Saavedra Suzanne Smith