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Milan metro project

Luca Garca-Gallardo
S3FIN460 GROUP 1

WEB
Nantes

Lgarciagallardo@audencia.c
om

Risks
Identify the main risks and determine who among the Concession Holder, Contractor,
Operator, Government and any third party should bear them and how.
Every project needs to have a detailed analysis about the main risk that can confront the project. When I
read the case of Milan Metro project I found several risk that can be very dangerous for the construction of
the new metro line. When we talk about risks we can find different types of issues that affect to the
project.
Time.
The duration of the Project is set before the starting of the construction. So we can say that is a prediction
of how much time is going to last. But in the contract there is a clause that sais if the project is delay the
company has to pay 36,000 per day but cans overdo 14,850,000. So for the company this is a very
huge risk because they are working under pressure if they dont finish the construction the set day.
Money.
Being a huge Project is a risk in terms of money, because it is completely necessary to ask for big loans to
the banks and with the economic crisis that could be a problem. On one hand because the interest rates
are higher than years before, and on the other hand because of the banks, the have less cash than after so
the among of money is lower.
Place.
During the digging the workers can find some archaeological sites or just difficulties because of the kind of
ground. Is very important to make a preliminary study of the past movements of the ground so it could be
easier to avoid this risk. We can categorize this risk as environmental.
Cancelations.
It is possible that the neighbours of Milan are not in accordance with the project of the 5 th line of the metro.
So they could make protests that can cause delayed in the project.
Substitutes.
The Project Company has a lot of sponsor. This is a risk because most of them do the same kind of work so
this can make confrontations between. It is normal that each one has their way of working. So it is mission
of the project company to make a nice relationship between the different sponsors.
Politics.
The laws are always a risk. The mission of the politics is to do everything in the better way and to have the
most number of citizens happy. Also for keep the place nice and helpful. So when a company want to do a
project like this one they have to know what are the patterns to do it by the better way. So the company is
under control at all times.
Change in the timetable.
On a project with these characteristics is normal to have issues during the construction so it is important to
have the capacity of change. The risk of this point is to dont have the knowledge that it is near impossible
to have everything perfect since the first day of the project. It is normal that arise several problems, so is
important to have the ability to solve them the quicker as possible.

Luca Garca-Gallardo

Risks
Majeure events.
There are also risks that no one can predict. But it is important to take into account. Those are no very
common but could happened. Those risks are; earthquake, flood or even a terrorist acts.

Prepare a risk matrix table showing the results.

Project
company
SPV
EPC
Contract
or
Governm
ent
Operator

Excha
nge
rate
risk

Environme
ntal risk

Politica
l/
regulat
ory
risk

Natural
force/
catastro
phic risk

Techno
/
planni
ng/
Design
risk

Construc
tion risk

Operatio
nal risk

Banks

X
X

Luca Garca-Gallardo

Insuranc
e
Cies

Sup
ply
risk

X
X

Supplier
s

Marke
t/
reven
ue/
dema
nd
risk
X

X
X