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We read last week a CIM annoucement of a Metallurgy and Materials Society (MetSoc) webinar on September 20 about Improving project cost evaluations.
BQE Water President & CEO David Kratochvil will present the seminar.
Our friend David will discuss the shortcomings of conventional Net Present Value and risk assessments applied to water treatment plants. He will explain how to overcome potential uncertainties with the Risk Adjusted Life Cycle Cost analysis approach.
Comparing alternatives for a project requires careful quantitative and convergent risk analysis. Without it neither short term (construction, implementation) nor long term (all the way to closure and wastes of waste) life cycle costs can be rationally evaluated. And long term is particularly important for water treatment plants, environmental cleanups, restorations rehabilitation that are oftentimes foreseen for long service lives.
Riskope has used probabilistic specific methodology for Improving project cost evaluations since the beginning of the 2000s.
We have never stopped pushing the envelope of these developments. Lately, we have used the pelican beak analogy to show how important it is to invest more in preliminary analyses, detailed a priori risk evaluations.
That is in contrast with common practice approaches: their users satisfy themselves with “risk-myopia” and NPV.
At Riskope we bring value to projects by deploying and maintaining an updated risk register using ORE, in order to benefit of the advantages, without incurring in risk over-exposures.
Strategic and tactical planning (Let’s define Strategic, Tactical and Operational planning) will thus be optimized.
Below we have sampled a series of questions from clients and we explain the kind of replies ORE can give.
The example focuses on water treatment processes and plants.
|Conundrums||What you should expect (risk assessment deliverables)|
|How many lines of defence? For example Buffer
pond or not, frequency of sampling, etc.
|Probability of occurrence of mishaps and failures,
with or without mitigations and lines of defence, including Common
Cause Failures and Inter-dependencies.
|Which mitigation and at what costs?||Different risk profiles of an operation depending on the implemented mitigation.|
|Usual Path vs Design Built & Operate?||Quantified life cost for each alternative.|
|Risk transfers, long term risks, exclusions and Force Majeure clauses?||A clear definition (quantified) of each in order to bring value and limit legal liabilities.|
|How to define true construction and lifecycle costs including wastes of wastes, and related risks.||Rational estimates including risks, explicit uncertainties, and possibility to update as new data become available.|
Contact Riskope to know more about ORE deployments and long term estimates. Improving project cost evaluations is possible and brings value.