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June 2014
Volume 66    Issue 6

Risk related to PPP tunneling projects for design professionals

Mining Engineering, 2014, Vol. 66, No. 6, pp. 111-111
Hatem, David; Munfah, Nasri


PREVIEW:

Tunnels and underground projects are inherently more risky than vertical projects, which typically utilize more conventional design and construction approaches and are undertaken in the context of relatively ascertained and defined conditions. On tunnel and underground projects, there are a host of special risk factors, including unknowns and uncertainties as to the physical and behavioral characteristics of the ground, the inextricable interdependence and necessary interaction of design decisions and construction means and methods with those ground conditions as well as the manner in which risks are allocated among project participants for unanticipated subsurface conditions. Public-private partnerships (PPP) projects, in their own respects (and independent of any major subsurface component), pose significant risk for all private sector participants. The main driver of owners to procure projects using PPP is financial, as often all, or substantially all, of the design and construction risk are transferred to the private sector consortium, including the design-build (D-B) team. For a concerning number of those public owners, that risk transfer regime includes rather onerous and aggressive contractual terms that allocate to the private sector participants substantially all risks associated with the encountering of unanticipated subsurface conditions. These aggressive risk allocation provisions, while directly impacting project participants upstream of the consulting engineer, have an indirect and corresponding risk intensifying effect upon consulting engineer professional liability exposure. 



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