Sharing the Risk Delivers 'More for Less' Risk Management in Capital Work Projects Severn Trent Water

Article excerpt

Severn Trent Water's risk management methodology is an innovative way of dealing with project risk. It has delivered lower contract costs and certainty of outcome for the company. In addition it has enabled the establishment of improved working relationships to the benefit of the company and its contractors.

Faced with a significant reduction in available funding for its capital works programme (20002005) Severn Trent Water had to look for innovative ways to deliver 'more for less' In response STW has adopted:

A non confrontational approach

Increased emphasis on teamworkMore open approach with a reduced contractor and consultant base

Sharing risks and rewards with the whole team To achieve this STW has:

Made significant changes to contract forms and documentationDeveloped specific tools and processes to manage risk

Embarked on a inclusive programme to in educate its own staff, consultants and contractors This has been done to:

Unlock innovation of contractors

Reduce the overall cost of projects

Increase cost certainty by reducing cost and time overruns STW's approach to particular risks has been to assign each one to the party best able to manage them. …