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External `Nonprogrammatic' Risks
Planning
and
Programming
System Project
Monitoring Internal Development
`Programmatic'
Risks
Operations
Project
and
Delivery
Maintenance
Figure 3.1. Existing transportation agency risk environment.
projects. The CEVP is designed to identify the areas of a with "out-of-the-norm" threats/hazards. At the same time, it
project that could be sources of increased costs, assess the must be recognized that the resources required to manage
likelihood of key risks materializing, and ultimately results in these risks will no doubt compete with those needed to revital-
the specification of project cost range as opposed to a point ize and renew the aging IHS infrastructure to ensure safe and
estimate to account for the risks identified. Chapter 4 describes reliable operations for the coming generations.
existing management systems and other analytical tools that
can be used for managing programmatic risks. 3.2 Risk Management for the
By contrast, the history approaches for addressing external Interstate Asset Management
nonprogrammatic risk is considerably shorter. Activity in this Framework
area was propelled by the terrorist attacks of September 11,
2001, and again more recently by a number of significant nat- This section outlines a proposed approach to augmenting
ural disasters. Despite recent focus, development of external transportation agencies' existing risk management activities
risk management activities today lags behind that for internal with a process that helps assess risks of system failure for IHS
risks. Appendix A summarizes the literature review conducted assets. IHS owners could perform the risk assessment approach
as part of this research. The review describes several promis- described here for their IHS assets and any other assets on what
ing concepts and approaches that have been incorporated into they define to be on their highest priority network. The result of
the proposed methodology. Two particularly important re- this approach is a set of priorities for risk mitigation. A descrip-
sources include the AASHTO Guide to Highway Vulnerability tion of the assessment and its results should be included in the
Assessment (5) and the report for NCHRP Project 20-59(17) Interstate Asset Management Plan described in Section 2.0.
currently in draft format (6). In developing the proposed approach the research team
In the context of the aging IHS, where the consequences of has adhered to the following guiding principles:
the failure of a system link are potentially enormous, it is im-
portant that the Interstate Asset Management Framework · The entire IHS (or highest priority network) represents a
provides for a robust analysis of risk of system failure. Such collection of assets of vital importance to maintaining socio-
an analysis must produce more comprehensive mitigation economic growth and prosperity. A transportation agency
schemes that take into account the asset/operations interde- should have an approach to managing programmatic risks
pendencies, and significantly increase agencies' ability to deal for all of its assets. Particularly for the IHS assets it owns, an
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agency also should consider external, nonprogrammatic
risks to these assets that could result in system failure and
determine what mitigation actions could best minimize risk.
· In evaluating risk, ideally one would use consequence mod-
Moderate Risk Greatest Risk
eling approaches which compute/impute risk (both materi-
Increasing Probability of Event
alized and avoided) in financial terms. If possible, one should
try to explicitly calculate the likelihood of a risk occurring, the
impact of the risk in terms of mobility and safety measures,
and the costs of mitigation. When quantitative modeling is
not feasible, the most reasonable, but still performance-
based, subjective method should be used for assessing risk
and prioritizing risk mitigation. Subjective approaches are Low Risk Significant Risk
often required given the lack of necessary data for quantify-
ing costs of a risk in financial terms. For instance, for struc-
tures there are many well-known but poorly quantified risks,
and there are few models available for calculating the relative
likelihood of different risks to structures. Increasing Consequence of Event
· Ideally risk management should be pursued at the pro- Source: Adapted from the draft NCHRP 20-59(17 ) Report (6 ).
grammatic level within a transportation agency. It is an ac- Figure 3.2. Universe of risk for HIS.
tive function and its membership is drawn from all the
stakeholders of interest within the governing agency and its
intersecting stakeholder groups. This is not to suggest that threats/hazards that fall into the
· Implementing risk management requires involvement of other two quadrants are unimportant. However, it is the ex-
all levels of an organization. A basic requirement is that an perience of the industry that risks with high probability of oc-
organization has an organizational structure for identify- currence (e.g., minor incidents, winter operations, etc.) but
ing what risks should be managed. Section 3.3 discusses in- that do not reach the threshold for any of the three conse-
stitutional roles and responsibilities further. quence categories identified above are usually dealt with pro-
grammatically.
The following subsections describe how to determine what Consistent with the draft NCHRP 20-59(17) report (6), the
risks should be addressed in an Interstate Asset Management following taxonomy of threat/hazard types focuses in higher-
Plan, and present a step-by-step approach to risk assessment. consequence risks:
· Unintentional hazards. Unintentional hazards are usually
Risks Addressed in the Interstate Asset created by human-induced traffic incidents, due to insuf-
Management Framework ficient skills or experience in design, operation, or enforce-
ment of vehicles.
To help identify the categories of risk that should be ad- · Natural hazards. Natural hazards include major weather
dressed, one should consider the universe of risk illustrated or geological events that might cause significant loss of life,
in Figure 3.2, and derived from the oft-used risk formula: destruction of assets, or long-term interruption of agency
Risk = ( Probability of the occurrence of an event ) mission.
× ( Consequence of an event ) · Intentional threats. Intentional hazards include terrorist
attacks, crimes, and war. They are less frequent and less
The vertical axis of Figure 3.2 represents the probability predictable and involve active countermeasure evasion by
(from low to high) of a particular threat/hazard materializing criminals and terrorists.
and the horizontal axis represents the consequence (from low · Performance risks. Risk or underperformance of an asset
to high) of the materialized threat/hazard. Any threat/hazard due to design, materials, and construction defects coupled
can be located in this risk universe. with lack of accurate condition inspection or forecasting
The proposed approach focuses on the right hand quad- capabilities cause more-than-expected wear and tear on
rants shaded red and gold. Threats/hazards in these two assets or hindrances to operations. They could also be re-
quadrants have the greatest consequences in terms of: curring events with reasonable predictability (such as heavy
snow fall accumulations, minor traffic incidents, etc.).
· Human safety (injury and/or loss of life);
· Property damage; and Note that performance risks are treated as programmatic
· System/mission disruption. risks described previously, and therefore handled in routine
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asset management and operations planning. Several examples The core elements of the philosophy are:
of these lower-consequence risks are listed in Table 3.1. These
are grouped into a single category, as the focus of the present · It uses scenario-based methods for risk identification;
study is on risks of system failure. However, this category can · It considers IHS and related overall transportation system
be further expanded into a wide variety of different risks that disruption for consequence analysis where feasible;
fall within this category. · It supports and encourages the use of direct and indirect
economic losses resulting from realized threats/hazards as
Risk Assessment Process key focal points to drive investment decisions. However, it
also provides a well established alternative that can be used
The fundamental objective of the proposed risk mitiga- in situations where there is insufficient data to perform the
tion process is to provide IHS owners with a practical ap- calculations, which is quite often the case;
proach to augmenting their programmatic risk management · It considers mitigation measures and their effectiveness as
activities with an approach for addressing risks of system avoided losses in the cost stream; and
failure for their IHS and any other critical assets. The result · It allows for the consideration of benefit/cost analysis
of the process is a set of risk mitigation priorities included in where practical and return on investment metrics to help
the Interstate Asset Management Plan, supplement other identify risk mitigation priorities.
types of asset needs, and can be used as an input to the re-
source allocation process. Figure 3.3 illustrates the risk man- Figure 3.4 presents the proposed step-by-step process for
agement philosophy that forms the basis for the proposed performing the risk assessment. The following paragraphs de-
approach. tail the steps in the process.
Table 3.1. Risk types and examples.
Relative Influential
Risk Type Example Likely Impact/Consequence Frequency Characteristics
Unintentional Vehicular crashes Short-term road closure High Skill, experience,
Hazard enforcement ,
Hazardous materials Loss of life operation, etc.
spill
Potential isolated structural
Oil spill failure
Intentional Threat Terrorist attack Short- or long-term road Very low Access, security,
closure exposure, design
Crime features, etc.
Loss of life
War attack
Potential isolated structural
failure
Natural Hazards Heavy rain Short- or long-term road Low Structure type,
closure location, etc.
Strong wind
Loss of life
Heavy snow and ice
Potential structural failure
Earthquake isolated or corridor-wide
Hurricanes
Flood
Mud/landslide
Performance Substandard design Increased agency and user High Skill, experience,
costs design, etc.
Construction defects
Increased work zone delay
Materials defects
Reduced asset life
Unexpected heavy
traffic
Incorrect
performance models
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Mitigation Measures Threat/Hazard Scenarios
Drives
· Maintenance · Natural Hazards
Strengthening · Unintentional Hazards
· Security · Intentional Hazards
· Move or Add Routes
· Other Creates
Increases Interstate Highway
System (IHS) Disruption
Transportation System
Capacities Creates
Reduces
· Impacted IHS Route Overall Transportation
· Alternative IHS Routes System Disruption
· Alternative Non-IHS
Routes Creates Cost Estimate
· Rail
· Marine Economic Losses
· Air Regional Economic Model
· Direct Repair or
Replacement Costs · Economic Sectors
· Indirect Lost · Inputs/Outputs
Production, Sales, Other · Response to Disruption
Figure 3.3. Overall risk management philosophy.
Step 1.a. Identify Hazards/Threats. The process begins Step 3. Estimate Scenario Consequences. The scenario-
with the identification of threats and hazards of relevance, as based analysis considers each asset or asset grouping (i.e.,
well as their respective magnitudes, probabilities, and spatial groups of assets with similar characteristics) and determines
distribution across the jurisdictional area based on actuarial the consequences of exposing them to each of the threats or
data, experience, or judgment. Hazards/threats identified in hazards identified. Consequences are measured in terms of
this step should include, at a minimum, any natural or man- safety and mobility metrics, e.g., human safety, property
made disasters for which mitigation is feasible that have been damage, and system/mission disruption.
encountered on IHS assets in an IHS owner's geographic re- There are two approaches to performing the consequence
gion. For instance, it is important to consider the potential analysis. The first, consequence modeling, is more objective
for hurricane/flood damage in coastal regions prone to and results in the computation/imputation of a financial cost
flooding. IHS owners on the Pacific Coast and in other seis- that will result from each scenario under consideration. The
mically active regions should consider potential for damage consequence modeling approach requires a larger input data
from earthquakes. IHS owners nationwide should consider set to support the analysis and is more rigorous. In return, it
potential risks to bridges, particularly bridges that have no provides a more quantified estimate of consequences for ma-
reasonable detour available, are fracture critical and/or sus- terialized threats/hazards. This provides an economic benefit
ceptible to scour. value, which in conjunction with estimates of countermea-
sure costs, makes the option of establishing risk mitigation
Step 1.b. Identify Critical Infrastructure Elements. Con-
priorities (Step 5) on a benefit/cost basis possible. Moreover,
currently with Step 1.a, an IHS owner must make a set of
policy-level decisions to identify critical asset groups and in- consequence modeling can be used to study the impact of
dividual assets for analysis. Bridges and tunnels should be materialized threats/hazards on the disruption of network ef-
identified, at a minimum, but an IHS owner may wish to in- ficiencies cutting across transportation and other related eco-
clude other asset types, depending on the types of risks identi- nomic sectors.
fied and available data. The alternative, more subjective approach, uses the conse-
quence threshold technique proposed in the draft NCHRP
Step 2. Develop Threat/Hazard Scenarios. Combining 20-59(17) report. This approach involves identifying the lev-
the results of Steps 1.a and 1.b, the IHS owner should next de- els of certain transportation asset characteristics, at and above
velop a set of threat/hazard scenarios. Each scenario should which the agency should consider taking action specifically to
have an associated magnitude, probability, and location. mitigate one or more catastrophic risks. Examples of the types
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Data Sources
Step 1.a ID Hazards/Threats Step 1.b ID Critical
· National/Regional Natural Hazard Infrastructure Elements
Databases
· Unintentional Hazards · Pavements
· Natural Hazards · Infrastructure Management Systems · Bridges
· Intentional Hazards · Tunnels
Probability, Location, Duration
· Agency Led Intergovernmental
Expert Teams
Step 2 Establish Threat/Hazard Scenarios
· Magnitude/Severity
· Probability
· Location
Step 3 Estimate Scenario Consequences
· Human Safety
· Property Damage
· System/Mission Disruption
Establish
Consequence Modeling Consequence Thresholding Consequence
Thresholds
· Direct Economic Loss · Identify If Scenario Results in
· Indirect Economic Loss Unacceptable Consequences
Step 4 Identify Risk Mitigation Strategies and Countermeasures
For each combination of initiating event and asset and asset groups analyzed.
Step 5 Establish Risk Mitigation Priorities
Figure 3.4. Risk Assessment Process for the Interstate Asset Management
Framework.
of characteristics that must be considered in each of the three Appendix A describes several example applications of the
areas are: consequence modeling approach. An example of the conse-
quence threshold approach (also referred to as "thresholding")
· Human Safety--Numbers of people killed or injured by a is the New York State Department of Transportation's Bridge
particular event; Vulnerability Rating described in Appendix B of NCHRP
· Property Damage--Replacement cost of the asset(s) de- Report 590 (7). This process, developed during the 1990s, de-
stroyed; and termines each structure's vulnerability by combining the like-
· System/Mission Disruption--The product of ADT, per- lihood and consequences associated with different events, and
cent trucks, detour distance and duration of outage. uses the vulnerability rating as the basis for prioritization.
These values must be estimated or calculated for each of the Step 4. Identify Risk Mitigation Strategies and Counter-
critical assets or groups of assets identified in Step 1.b to see measures. The next step in the process is the identification
which ones should be the focus of Step 4, during which risk of effective risk mitigation strategies or countermeasures for
mitigation strategies and countermeasures will be identified. each combination of initiating event (i.e., threat/hazard of a
