Managing operational risks key to infrastructure projects

Poor management of risks puts life of people at risk, exerts great economic costs

NORTHAMPTON: The recent horrendous train accident in Pakistan which took 70 precious lives shocked the nation and made news waves across the world.

This has been one of the worst accidents in recent years. Pakistan Railways has encountered many accidents in recent years. History reminds us of the worst incident taking place in the village of Sangi near Sukkur on January 4, 1990 where 307 people were killed.

Poor management of some of the operational risks not only puts the life of passengers at risk but also exerts great economic costs. This article outlines some of the strategies that the policymakers involved in all forms of public transport facilities should take into account for ensuring safety and economic sustainability.

History of Pakistan Railways

Pakistan Railways came into being during the colonial era in 1861 when the rail line from Karachi to Kotri became operational. Over the years, several railway companies began laying and operating track in the current day Sindh and Punjab.

The country’s railway system was originally a patchwork of railway lines including the Scinde Railway, Punjab Railway, Delhi Railway and the Indus Flotilla. Over the years, several other lines were built and later merged into the North Western State Railway in 1880.

It was the North Western State Railway which continued its services in independent Pakistan.

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During the British rule, the railways were considered as ‘productive public works’ and a lot of emphasis was laid on different aspects of their performance. Every year, the Secretary of State for India published the Administration Report for Railways in India, which contained a wealth of information about railways in terms of passenger traffic, goods traffic, capital outlays and railway accidents.

The report laid out in detail which railway line was involved in accident, the reason behind the incident, the number of people killed and injured, and the economic loss (in terms of number of days that the train operation was stalled and the cost incurred in bringing it back to operation). This was public information and important statistics of different aspects of railway performance were published in major newspapers of the time.

Going through the current Pakistan Railways website reveals that yearbooks for only the past three years are available for public information. Moreover, no data exists about its operational performance. How will any strategy be devised, and economic and operational performance enhanced when no data is available?

Operational risks

Operational risk often receives insufficient attention until it impacts adversely and substantially the everyday life of society. Success of infrastructure performance is measured through the absence of major disruption to everyday life.

In a paper by Roger James Allport published in Proceedings of the Institution of Civil Engineers - Management, Procurement and Law in 2010, interviews were conducted with experienced industry practitioners on the operational risks in the lifecycle of an infrastructure asset, their management and issues faced by the different parties involved in mitigating them.

Some of the major insights from the study are that operational risks can significantly increase if they are not managed on a day-to-day basis; infrastructure-specific characteristics matter (operational risks for water projects would be different from those of rail projects); ownership of the particular asset class matters as public and private sponsors differ in their approach to risk management, thus impacting operational risks.

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Strategies for mitigating risks

Several strategies can be adopted to mitigate operational risks in infrastructure projects. The academic literature and policy practice have defined four key strategies for safe and efficient infrastructure performance.

First, when formulating strategies for transport infrastructure, interdependencies between different sectors should be taken into account. A case in point is that when planning transport systems for cities, road and railway networks should be planned together, particularly in cities where they compete for traffic. Second, objectives and operational performance criteria should be clear and appropriate. Effective objectives should be linked to the operational criteria.

Third, operational performance should not be linked to political short-termism and lastly proactive asset management is the key to delivering continued operational performance.

All these strategies must go hand-in-hand for delivering the operational performance promised when the project was first initiated.

The writer is a doctoral candidate at The Bartlett, UCL

Published in The Express Tribune, December 2^nd, 2019.

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