Scholarly article on topic 'RISK MANAGEMENT IN A LARGE-SCALE NEW RAILWAY TRANSPORT SYSTEM PROJECT'

RISK MANAGEMENT IN A LARGE-SCALE NEW RAILWAY TRANSPORT SYSTEM PROJECT Academic research paper on "Economics and business"

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{"High-speed railway system" / "System procurement" / "Risk management" / "Korea Train Express" / "Engineering risks"}

Abstract of research paper on Economics and business, author of scientific article — Sunduck D. SUH

Risk management experiences of the Korean Seoul-Pusan high-speed railway (KTX) project since the planning stage are evaluated. One can clearly see the interplay of engineering and construction risks, financial risks and political risks in the development of the KTX project, which is the peculiarity of large-scale new railway system projects. A brief description on evaluation methodology and overview of the project is followed by detailed evaluations on key differences in risks between conventional railway system and high-speed railway system, social and political risks, engineering and construction risks, and financial risks. Risks involved in system procurement process, such as proposal solicitation, evaluation, selection, and scope of solicitation are separated out and evaluated in depth. Detailed events resulting from these issues are discussed along with their possible impact on system risk. Lessons learned and further possible refinements are also discussed.

Academic research paper on topic "RISK MANAGEMENT IN A LARGE-SCALE NEW RAILWAY TRANSPORT SYSTEM PROJECT"

RISK MANAGEMENTS ALARGE-SCALENEW RAILWAYNRAMSPORESYSTEM PROJACT-Evaluatioaof KoreanHighSpeed RHllHayExperience -

S. D. SUH

RISK MANAGEMENT IN A LARGE-SCALE NEW RAILWAY TRANSPORT SYSTEM PROJECT

- Evaluation of Korean High Speed Railway Experience -

Sunduck D.SUH,Ph.D.,P.E.

AssociateProfessor, Division of ConstructionandTransportatiori Engineering HanyangUniversity Aasaa.Ksfoa

(RvcvivvdSane 7,2000)

Risk managemenneRneniaynev ornKeKefeen SeTul-ensanhiRnnspeePrailaoy (KVX)prnjyntsiRcefhaplanniaoatageaneevaluated. Man can ylaerly seerneintRrelay нfenнineerinaУvaconstructionпsks,financielfisRv and oolit¡calrisksintReHavelopmoytoftne PTXs-ojsnt, which is the Rnyulierity oriotнe-uкaianPw rpi^\eee^nmRtv arojeLts. H Snief descrifaianonevaluHtisvmvthodoivca ^t^nP oeeraiew nf tseptojastlefollowed by de-tnilnS evaluationsnkkey <^itf^fyas^^ in-isHs t^^Ha^(^^nnanvanrienpi railwan snaSemandnigh-speeerailaeyvystem.Rocial and politiynl t^^^^^iao|^iaнer-rno andvassSucVanriskniSna-inanciRi-iskSiRinCv CavDa-ed iasRntemнtocuremen-p-eysnSiSVRVas f^l'c^|:t(^^^i^нnni1^^-ic^v,<^^^^lfétVay,nslection, and suvrh o-volici-atian н-eRKoaratve entнne eкaisafsHin dDcm DeCviiad oнentstenulting-н:>mtheseiseuesRre divnoPsedaioRVwithrheir possible imRnyt onyysremrisRiLevaenslaamedannruRVe- soasibietennemen-svreeluoHiscussed.

Key Words: HíoS-srhhS -ailwayrysrem,SyatempfecнremeLt| Rmnmoa^c^(^mav^,Kore^Eré^in Rypraoe,Engioeerisg risks

1. INTRODUCTION

The Koreanhigh-ppeedrailwaythatconnectsSeoul and Pusan , KTX (Korea st^i^r^ied^i^s test

mnongPe57-ldlometer-lonptesttrackbegimingDecem" ber 1,1999 (Figure Id- tt^ is;nt^r^:^c^hTaeV-baes^d system (F-gsse 2e)tidtl runson^m Kmlong l-newithSour inter-med-aSe ^^ts-^c^i^^.Ii-i^i^eSi^stase itsfiestistaк2 20mmercial tpesaS-tn ^n200Se-i^i^t?eni^nrltne an2som2regments tf gheexistigglineendehcseeendiStagerevenueopera-S-tn fromtpayearn0t0 dn2eomplareln new Sine. It m-ghS bepr2maturetofniioanaiyzerisktortne neT KTX eyedem, a^tstf^:ttep sightdeare ofronttraetiod andaddi-S-tnal yearsfp dlanningкroeers,itprovidereno2dh maSes-al andlnterestmoinsigbtssgl1:hrrirPasbefStof the pstjeaS. Itithopeg-hytShesevaiuabeeeoperiencel will ehed -ighSsonlimilernewieeba-lraieiailweyptojects.

One fleetrobsisSrofCecoaches and wiUbe able Se acco2mloda11eaKsul900perrbntwhenttlscpmdleted and putmopaSation io2004. Csrefdlo-egmкo1 csnetruc-S-en andeperatiobУchemesareersentialte kyepthe railway systemtfraandreliabla,codridering laeiarge number ofdrrregperrobdparT.TeeTУXhascharac-Ses-sS-as ^y^am m7petheprotectmnre compiexthabexist--os t^^^ln^^y proiaeSs . It utaairesnonIindioenbus Seahnelegn, andtPererprfforsionryslemtechnglngy

should beselccted c^l^iclnnut an

extra burdennnprojectichcdnlinnandcost eontrol. Be-causs itiaanewlmeconctmttton,comblnaSldnsot alignment c^s^i3Íi^nerit^]^ñ£^,f^;^stemtht0i^i^ic^i^i(^í^,c^nn ttation location andlOe l^oo^enhet^t^ tolc deeidedconcul•rently. This calidformuchmorecnmxlexderisionoroeeases in-holhing locaIohoermnanCslneddltionto din r^en^thl gov-eramenl. I^irr^l^irm^osit, ithtvhlvatMcП uocertaectiesmCerms ofpoMcalrisks,nleddittoü tofinanrial s^c^iI tectniological aspects. This stemsfrom thek>no dcotccCdnrolk>otnaC spans manygoveпhlenlehпnnistrailooaanhthelanee dcocect size lhalencompassetdifferenC ahmtoisCratlvedodies.Tnenedore the prrjectcalled forextenslverisnmnnrgemenCCor suc-cessdul<otdcafe comoietarh thalicmhchmore comalax than any olhenorolcct evercfrrieU outerKorea.TolackSe these diddicull lasks,llle grganizaiioninenrfdeoelneorotrcr com-nleledrisk mrdnehmantdfforSs, wtthr(Пgdlgdegndecof success, atdifferantrIages hf ^he^^oj^e^ frc^nn^^e^i^i^^oti011 to non.AisolbrCashfnoulO conCdloe uhtiiCjlesuccessM com-missiootnganddaüooparaiion.

This paperenaldatesrirhmcIlehement experienfds of the Koreanneuul-noranKTXprojecirofacsihnerhe in-cenlion dflnenrojeie.nneneot tertlonUisducretend de-dines risks swas oteO in ihepader, Sollowedby the descrinlion üfhistoricaldeveiohmeni Cat-

egorized risk smir erediscustcddeiedon tKTKrm experiences, and finaПythe lesronclaemedcrerumnarized.

Seoul-Pusan HighSpeedRailway

Fig. 1 Route map of Seoul-Pusan High Speed Railway Line (KTX)

2. RISK ANALYSIS OF NEW RAILWAY SYSTEM PROJECTS

In thecontextofthispaper,riskisdefined as the potential forthecompXedednewrailway tystemproject being unabteto function con-

eeption, resuiSingfcdmuncxsSoiwtyobxutShcproj ect. It ran represeninnythiggOromrostovborpn,projecidelay, raie consirucSionoeCopaxation,enWxhStemintxwrity. In tfat sense,it ismt bVbroadfstOanfinanci nlorsafety virkr usuallyconsiPeredVpvprorects. Ríií arsersment and management arediffícullandimportantinlargr railway pnoieeir. Itismore so inarailwaeprnjectwitn a new system technology.Thvra dc^bm^eir^xist-

ing hteraburePaahgnwtihriskmanagementIn f ewhigh-rpeei raljwaysnstdmpepjerPr,eoxf tbofghthave are nbmevobr sourcesofinformationfgrgenrroirobrtruc-tion andtrnnstoripepjecCs.

Rirkmanagementon convbructionprorectshahe re-

Fig. 2 Rolling stock of KTX

ceived ex-

ample, see Flangagan and Nemaan1, li^i^s^i^irandh^lti^ifer2, aad dkipp3. Amongthghe,SPipp3 detailed Soptcsdfgroundfngiheering,anh the rest discusses risk margenmanr ghaenerarconstructionprojects. Taylor4 ct^^t^i^^^^^^sa^ ayntransport,

but itonnhtntra1:erontPtn roПraioniheuer.Blhakley5 deals withafgaheeTfgceratylshues eneeviiyely.Rhyne's6 work has toePrshilper,buhrelies

heavily on the exesttngPheratrterecordsfoeriskassess-mentl whtcheanotnossihlewtth newraüwaysystem projects. Riskieshgy ere nlroahneesleO fthm^]e^ prospective dfynsinmreriability,forexpmple, soeColombo and Buetamante7 and HtniayandKumamoto8. ^mihh9, ^c^r example, riskassesament.

duh and Kwtn10 presenUayarapphcaSaonrhpeTehces for highway projechestnnmtyanalyees.Thernsti1:uSefc>r Ur-baa Transportation11, Booze-AUen12, and AУacnsTech-nology13 alladdhgssrtansctriskmanagement. morrnore direct reievanceSotnispeper, ehetammsiwoskefTouran et aL14 exhensivelyditcnehgc eSskghegssment ixfixgd guideway Cransielys1nmconclmcSaon. ^hrnwgvgr, myinly docuses onubranraansileysSemУlraCher tam ngwaggional railway syshgmsdsohects.

Risks tnvoivedtnhheKTX ohateyt ceg nerhf upgd as hechntcar,firanriansoriaTarO pohticaainnaThe. The technical riskstnrluh egnтinggaigyfnnconstrustion risks, andhrhaddonheetgchyicsl crmplgxrlehf the project, whtchismuchhihherthanehosa hgiaSentr conventional railwaydroheces.Tdefmanciairisnrsmainly dor costvhgrsnn,andtecurine fungenu.FiyaПy,Shg political r^l^s^sani^ldhlt^1^(sii0lt^^l^í^i(t^^(^j^ar^r^-ktaf^nnt^1^i^(ress, public ahawholg,

and otherpraniтguissuesah ri ^routd ardstation selection. FortheTTXproterrl aПthgsg1:hrgg riadr had a complicating anhgp:lrayladUusuaПydefigdygyaratganaly-

RISK MANAGEMENT IN ALARGE-SCALENEW RAILWAYTRANSPORTSYSTEM PROJECT-iE^va^uaOoni^f KoreanHighSpeed Ralliwayi^^lence-

S. D. SUH

Table 1 Risk categorization for KTX project

RiskGroup 1st Her 2ad Her Risks mvolved wirh

KOX Rvacaativael ^iäll

Social c^r^cdVcE^liCeal Rnouletvre-Riynasns and Permits Aacirvamaatel lmpactStatement Hioh Madium

OreasRvrtetiva lmpactStatement Hioh Madium

Aaaroe Use Asнessmant Hioh Madium

Onyhavlvoe T^c^r^iu^er Hioh NA

Trvjact Feasibility Rvao-tarm Viabl^y Hioh Madium

Tvlitiyel Situetiva Hioh Madium

Tleaaiao Raesvaeblaaass oFOпHects Syvpa, S^y^r^^c^u^^, Csst Hioh Madium

Oayhaiyel Hioh NA

RvmRlaxity ruFO^rc^rect Hioh Madium

Aubliy F^e^c^n^ptt^r^rraE£>ntety Hiohar Hioh

Dayisiva Makingrroness Hioh Madium

Paoiaaariao/ Rvastructiva Dasioa Steaderds/Rvda Hioh Rvw

RvmRlaxity Hioh Madium

RvmRlataaass uf Ds^ian Hioh Madium

Systam integtation Hioh Rvw

Rvastruytiva/IaUrestruytura Arvyuramaat Seuaty Steaderd Hioh Hioh

Quelity Control Hioh Madium

OyRa vu- Coneect Madium Madium

Rvatreytiao Areangement Madium Madium

Rebvr Madium Madium

Systam Procurement SRayiUiyetiva Hioh Rvw

SyvRa oFOrecursment Hioh Rvw

Arvyadura uFOrecursment Hioh Rvw

Financial Fuadiao Fuadiao Svurya Hioh Madium

laUletiva Madium Madium

Ayyureye oR CestEstimate Hioh Rvw

Axyheaoa Rate Hioh Rvw

Jviat N^^n^ua Madium Madium

Rvst Overrun Hioh Madium

Daley Cost Hioh Madium

sis. As willbedemonstratedlater, it isthis interplay that can conSrlbulegieatlytooostovenstn andprotecSdelay-Toussn etal. 14 tdeniifledfifleen risk idemo es^st^siensit asojeces andgreapedthose is^t^t^^hre^ssS^toaeicoSee^ories ofdeslgnjroostructiopana flnunciairisns. Teee^d not explicitly considersoclalandpoljSicairianspa thrirwork. Fos thispapvr, risksere rctegorizadassnownln the Table l'Xophcltlenaeinlngroclaiand pollliaalrishr. The last tworoldInosoaiheteUie comeiaoe sizeoO risks involved mronrentiopaliahwayoj'ojecta withrPosaof the KTX projecS.

As showninTaMe o demc rartorthaov more pro-foune impacts onKXXtnm onnpnventlonalrailway osojecds. Forxpdmple'tecthtologytronsfos ¡somaon- concern fortPeTXXproject, bui ioi d notmurhor eoncern fos convena0tnaisahwyopopjeresshatli0lllzvalryady lo-calioee AisosyrmmhrevPdemealS proce-

euses eonotoos dSodmn of oc a thallenge for conventional raltwayvsoiucts,butiS isomaloehordle to ovescome intPeKXXproject(Rishs aosemopeetend du-sation <sftPapopjesSaro utualiyanalezedwidhsome kind oftsrc^l^^lali^sa^j;Sooi, as thrMonSv Cadoslmuiation.

This taiiway project, us-

ing existingdatabas rc^^cc^i^ti^^di^^r^ition. But for the KTX projecl, it isueeydrfficulerobathe sama,because thsib data.

3. MAJOR MILESTONES OF THE KTX PROJECT

Tr understandtbt grnhbtents of thispapcr, it is helpful tobas as^hb^a;bagU^yrnenn ^nfot^rü^n tb the Sstul-Pusdn TTUsryUDre,

parOsbt milestonesarppreiepeedCirst tith Ul^eirtii-tori-ral backdrop .Tbeweb sthc^^^re^i^eit^I^ tt^b^otga High ShsseRaliway (tn^^^rbctnnUth^tio^^* willbaveayvalu-aals inoeburstaediegIheI!urrentsratnt ohiyooroject.

3.1 From conceptuapplanniggtooroundbrkaking

General Background: A generalbaouriptsonof high-shise raliwayinKотea'snytibnaideyelobmont can lb foundisUuh15. Inl984, neaaibiliryfor1heconotruc-tirn <nf t gàghiSpeedreèiw ay tnstemwussIediedns one msasnre ofeipaediggIha ^i^^su^ttrirtibn capacytyof the SsynllPnsan corridor . AsubsequeotseynywasiniIiated in 1989 aedicseeduntil Janyyryi>4iy9ito repai-p pre-liminaay IhIhesSubo,engineuss from

highlsisse raliwaypbutatieocouutrieswereeneiudad in CTS srudyusonastthmnkeChesystemoeSeciionprocess mrus yobjeciive'**. AilgtmIentaedttatioyk>cytibnal-er-nativss wereibanrifiedandanalneed.nraSrIof request ftIaurhyoial (EPnyfor iia shshemnrocuremeni were de-vslyhse forbarinosscenasios. naasibiiitn ai tiehigh-shsse raiiwaysotIemwasrr-avaiuaea0 in ibrsecond phass srudyaSoenwithIna natiohalhigh-seued raiiway nstwrua16. ThesUeeu rechmmendeda4ah km*** long aligomsnt witnSnuribIermedintetSynonsand amaximum rhiiatirn speednf300 IcTcn.A shsiematih ydbroach em-hlryse intba reudy toaeaiyze yurk>ysaomeinedai-erna-tivns rouieSitirffkand reiiwayonstemwoIierroduced17. Tytal projeclrostwis astimaeediobe 5.8tiiiKon won****, rf which4.6iriyionwas inr infiuotructdie, andl.2 tril-lirn wonrur rolhngslack.

http://www.khrc.or.kr/ This wasono c^fth^

that hashadlong-iastingimcact en theprojecCprogress.

This washno orioinalroute.andextaaden io^i^tlngiaaea^^^ltashion

to 426 gmandinanaeabaskto 412 km.

800 won = $US1in 1989, nc^rhaoahé^naf^ fato isaboutr,200 won = $US t.

Organization: ASperial Cmmmttee* headedyyihe prime mmisier wglformen todralwirheгeeioutpolicy meyeucee regardingthe flgniSpeeУ raüwpyprojatt and the IтcWenт Iniernaüonal Airnorrpoojeet in ^l^J^j^lLl^Q. In Marcdof1922,hheKoreaH-dhiSpeedRailweyConstruc-tion Authorily(KHRClwaainrlitutedwitbee40t 400 penpie as ahifrdaтency eотhigh-1n>ee4 railwaycunrtruc-tinт. FigureЗstwwrhheorgayieetional8hact (if the KHRC asofl999.

Construction: A groundbreakingh8remтno fOTihe teetrtcyck segmentof77kmcтnnetficeChnntn and Dyejenт washeidinthno f9,l9en.etwasтhlyone year rdter thesrart eehne deiaüed gtsign, efh eight mnтtdeafher ieeuiтg the RFP, forwhlehrheptnposai wce recencd in January 1992.Thgsyhtemwts nhtdecined yet; therenOTe, the s1]rahegyr7eтnwes to phoceedwitfalihnment design utilizing designyaricblgsrhatnoulhbe cenтnhтdenomi-тytотe oftheChheeiügh-hhfed ra^r^w^y ^^s^i^i^agc^i^ar con" sidered**. Tabie 2showsmaiordeaioncriteaieoaeee system.

3.2 First amendmentof themasterplan(1993)

One yearafter theeeтdbdhr7akinh heremoey, the master pianeorhrehiggi-hhfedraiiway wasgreatid modi-died innnhfl99I. ImpoTaehitgmaofnorihewere: - Cnet oftle ppoojectinhrgasentol4l74trii Hon won (1993 pricelfrom 8t8 rririinnт<ln(lr88price).

Table 2 Major design criteria

Daycription Dayian

Maximum Opeaating Phaad 00kkm/h

Dnsian Speed 350 knVh

Stanaara Radius 7,000 m

Track C^€^n^eri^n€îPiCi^iag 5.0 m

Maximum Gaade 15 5o

Stanaara Design oaad LS-00

Tunnnl CrossaccCion 107 m0

Total line hocgfh ktt km

Earthwork 119.59 km (29%)

Briaan 150.73 km (79%)

Tunnnl 138.68 km (k9%)

Graan byaerhont 100%

Lnss hhan 5 %o 191.7k km (79%)

5 ^ol «o 96.06 km (39%)

t0to15°/oo 103.00 km 339%)

Staarioa HighSaaea RaMwot andtCelncheon

International Aitport Cos;rrrccoon

This wasalsa fhat Padaoto1opiC impact

on fheмystgmconCigitarlonarOconsrtuction.

RISK MANAGEMENTS RL^/^F^^S^S^CRAL^^^gA RAILWAYTRANSPORESYSTEM PaOJECT-EvaiuaVonof KorEanln¡ghSpeed RнllDayExperiencт -

S. D. SUH

- An additionals-ation ettKsootskirlsefSeodi was added -South-Seoulstation):Sorel!umPaeoC sietions beaame five.

- The commissionlngdatewesbostnenfd2rnmlde8 to 200,* (Firri]У-ase witi streeeR Row withrenvantional ra-lway beSweenfsuth-easuiandfso!imdinstetion)

- CecfndIg-ase withthenewdadicetensegmenSbetween CtuihiCetul andeasuitSaiion wiiibeopenedm2010.

- All mtermediates-atiobiwill bs t<diit^t sired -eeel in-rSead clfonPesprsond.

Mere than27%oУtnacostincreate wa1attributed Se pricelnpradldlfoItnapasten•eayeaIlit!a remaining 20% wasltbreld attribpIeK toal3 0mincrearein align-menS iengthenbbui-Oinerequlremenls.Teeien%hof the l-ne lncreasedfr2m21)9 kmtiU8l.7 km. Kbecost in-creare notonloaccolmlffpr nr-raincreasss erring the paeS foureaers,bdraisolnciudesadfrtionaichanees re-rulS-ng fromteedeslgnvariables.Designldesd,tunnel cskss section ,enrl roeteleng-h areynimieme exemples. Therefere itirnW wiretDniractileomparetnosetwo fig-srer. t^c^n^^^^^^m meneexperlsbeheveShat theimtiai cost andopentngeaar eslimetesweretoo ^f^^imi^^l^^c wMle con-r-der-ng ideaifonditions,anУthytthe new pooI estimate wis basedontooepgrersice designcencepts.

Regard-ng rolllngsto7k.theTGVconso]2inm was selecSedas p drioritynagoSiatien pertnerinAun9iil993, and ff11eralmostoneoeeI(theconSeactforrgПing stock

precuremenS wassioeedinrpn9l994.Fieory4 shows She organizationKfihe TGVconsortium.

3.3 Second amendmentof themasterplan(1998)

In thercoile2malterdl anarlnouncedinl998, a phased constructionennco!mirfloningIc!emewes uti-l-aed. Fortif Pirctddese, thetotei linelyngthwill be 009.8 rms.УPe]^ell/hbe linn longen2 the im-

preced existing KNRlinedein8l87! rf:nlong.Even Shesgh the meolm2mspeed il2rlkmIh,theagerage speed wlliPaabontl721yuOnOncetnasecgnd jthase is cempleSed, thetota-linelengsh wiiln2 4lCte:nand travel S-me iseppactedtonrl l6minuteswltheneedceee speed ff213!rgh.FoItnacpmpietedellglnnrnt, l ntm will be ai-gradef2mprisln2 27%,lr2kmwillbesiaduct, cemer-s-ng 27%,rnnl99 krn wiiise tudnalscompris--ng 46%. ASolal of P6train setlareeedectcPtooperate en the liee.Abo8l74%t>e be manu-

facSnred

The projectfosSwaseкnonecedto8eie,8a5.8 bill-en won,rndfcythefiry-bhnie,i8,8a7:7biilionwon at She r998priee.OУthetotalcosttthe c^r^^i^i^i o2veп:lment w-11 berdcкonsibif for75%, oh whieh15% isequity par-S-c-naS-tn and0%% isaloan toKHRC. W]2eremeining

ee% winef rinancedey khrc. 2n% wunane bond,

20% byfpreionioans inlheformatpCsupplier's credit, and 2%npprivetecapitel.Tebleashowltne lending iaheme fortecpoeiect.

Svurya: KoreaHiдTSpeeE RpilwayConsCäucfiou 999

Fig. 3 Organization chart of the Korea High Speed Railway Construction Authority

* Oväai constructionaeУdPwaDreoardedroHcsevenyears.

ROLLING ^^C^CÎ^^R^UP

ALSTOM TRANSPORT S.A.(RS)

ALSTOM TRANSPORT S.A.

HYUNDAI DAEWOO HANJIN

KOREA TGV COSOOTTIUM

CORE SYSTEM GOOUP

Consortium Leader Core System MnnagemnntanR ^^^ises

EUKORAIL

ALSTOM S.A.

ATC GROUP

CSEE TRANSPORT S.A

CTC/IXL GROUP

ALSTOM TRANSPORTS.A(SIF)

CATENARY (GOOUP

CEGELEC

CSEE TRANSPORT S.A.

ALSTOM TRANSPORT

S.A. (SIGNALLING)

LGIS SAMSUNG

CEGELEC

ILJIN LG CABLE

Source: KoreaHighSpeed RailwayConstruction Authority,1999

Fig. 4 Organization of Korea TGV consortium

Table 3 Funding scheme for the Phase 1 Seoul-Pusan High Speed Railway

(In constant value as of Jan.1,1998 , Unit: Billion won)

Classification Original Plvs(6.r4.93) Amonsr % Revised Plvs(7.3r.98) Amonsr % Amonsr ahasgen

Gov't Contribution 4,833 45 5,732 45 899

Subsidy 3,759 35 4,458 35 699

Loan 1,759 ro 1,274 ro 2oo

Financing by KHRC 5,907 55 7,005 55 1,098

Local Currency Bonds 3,33r 3r 3,668 29 337

Offshore Financing 1,978 18 3,075 24

Private Capital 598 6 262 2 (336)

Total 10,740 100 12,737 100 1,997

The chart gOawsadeteilcOcomparisonerrhe reviseO and oniginai funding plan ofhSase usnndinc scheme fgrPhase 2will t^^ the same Source: Korea Highspeed iriailS^trr^s^tr^c^tin g^utr^on^t^,1999

4. MAJOR RISK MANAGEMENT ISSUES

Twk amendmenSsto11hemasternlan(ec axpieined befere, of KTXlhemrcivetrepresentmelorslskmanage-menS ffforKs. Moreidtereínindlessdns,ndwevac, ien be ebSa-ned byfooklnonrtoIndmduairisd i^^Ai. As was d-scussed previous! 1tderewiii nemanoPifferenrways Se categorizerirks,andsomeseb1ectiyity wiilcertainly

play adartinlneproeulI.nnedacfconfirtad to a small nsmber oflmкortentceSegorias assnowniAWrbiel, and ane%ortismadato eopl2mmostoeltleisrues wHin them. Cnec-f-c ^i^lt ii^mst-i! midil OeoCganerelmSerast, not aesnSry speclfiC]arachosfnforwidscaudiences.

4.1 Social andooliticat risks

4.1.1 Regulatory r^^lrs

RegslaSery risksrcprotent in

ebSa-oing 1icensesrnnp2rmits 7s timi. nheymf(ude En-c-reo!enSal ImpacCStIfnment (EISl,Tranlportatk>nIm-nacS Statemen) ,SiteSmpaAAnaiyl is,anOPilargy Use CerSif-caSe for Kotocc esd (Pk! from

She KTTкoledspeciclf>roPlems in tfs cetose cf EIS sSage. Adverseeffacii ofKTXriea(tiOf-wyO Ihctdidides 1x101-0. viliagesalfocaused ttifCoppolitloкSremfocal neenle, andrenuirebboI-0ingexp•a yetnwuys.Ascan be seen oitde roptenearKsmngju, therpote onsiingsgrough She archaeofogicalsitepocedcspaoiyicdelienee1o the nreSecS. The Minister ofCnltpre(MOCtusnylid has dif-ferenS prioritiesfonfemmAbuI-Oinotranlpocti-:nrasteuc-Ssre andfoiiterving niltorico- tites.

4.1.2 Technology transfer

Frem thegultetoУlneproIect, idi^sc^i^^^d impor-SanS objectiveoftheKTXproIectwasidedIIeied to be prer-ding lmpetuslnadvancingfocalraiiwaysys11ems

RISK MAAAGEMEATIN /My^F^C-S^^CLELIE^^W LAIFWAYLSAPSPORNSYSTTM EROJEeT-EooIcкrюnot KatNanaiтhSRasE PaiiwocExperiencN -

S. D. SUH

teednologn. Thereforeitef0ooiggySraпceersademoshave rereiven highprioriSyintneprol eatdeoetopment. The Mioistrn of0cicpacanUTocdnoig00'lhdtheMiшslry of Ionustrn and Resunraer niayedabigroleindevclgping terdonlngи 1]ranгfersfУdmes.Aiswthe]b op-ectiveiusu-clln donotcoincide withlhoreof thc Minictroof Con-strurtinи andTrcoroortation (MHTT).

Develnsmeиt oftУedcСi0jedtocnncggoytreyofer seherne putextre oSccinonrhoprolecjbunoetaesl dura-tioo. Designtefnooiggyreceivedlessemphasisthan roll-iog stocktefnooiggy,but laterexperiences demonstrated thct systeminteyrationteclolologowergedy important terhиdldgg to0etranreeп(e0]eydiharaftruetш"edesign terdodldggl with wЫfhioceifngiyeers feh comfortable, wcs alsom-nortcnt.

4.1.3 Projbot feasibility

Ooe shouedyeprepered jodoalw10hpoiitical in-Clueoees when wyskihownlhsdohaiargeprorectthat en-rdmscsses 70penycntoftИc yctioncipopuiction. It is geoercllg understoodthat rodSeendstationseiocjюn will be infIuencedsdmonow.The timingoO oertmnimportant milestooes will be inflocnoedi suc h as the grouonbreckiog andopcnmg, (1^110^110^6 00^^ of the influencesisherd tveucio c1]eesheing yvcitive or negative. Itis amettor vfl"valhe'(w0ichcngineers and plcnoers (^опоГО^^ч^^ otldeirdisposal.

With theOouul-PCsch enghrspeedroiiwny prolect, mcog issuesinfiocpaebnopoHticai interest moie out-stconiog. Thetop-ieoejdeoisюdmekernc -hepresident, ofcourse.Sinyethe ^Ои^Гог^УГ^О^с constmctioni-hree presi-neots rsave0caljwithtneprojeet.Theirtenш•eis five gecrs. Tiie S^m^ngcds^ico ofRFCissuance and grouonbreckiog seemedtohaveaoieorpoHSiltaiimpli-го11ои (cftPe then-ohtgoingpresinentiEvonthwos0l the oew govenmrentectoalln signedtheiegisiatюninl994, the previousovoermocnt already swinged CPccn^(^;^men-tcl г^оСгс^и!.This criticnlpoliticaldecision potmany en-gloeersi piaiиrerSiChhgovcmmenlorficieisincgoIly. The nerisioc tmpactedtУesyctemртuedremehtdecision and selertidи gfOesicnveriaPles.

The choiceofthefourcpessidgKgppшu was not solelg basedon economic erficiensyafterail.omtarmuch nebctei trouble,ohdrecentcИsyCos on Shecttgиment Scssicg Kyungjuithat rooje n^ili eoObe until the

gecr 2010.TУerootwthat wШneпseOfocthetшle belog wastOe rodSeedoocajodovor aheKyuncpurcnite by mcog engineersohS nialУoejsduring (Се Oi^^s^^TsC^í^;^. One too (^n^sinopettrr^tthedei^isi^nmo^l^^^smn^t hcge had better insighlcfyrthei'valuo'Cor sosiety.

4.1.4 Piraalan

With thesnstdmseiectioTlCИsyoesinroote,align-mect andfost,andt0lereojsenmarterplrУl,Shesystem rocfigurctioc ^nl93ei^(^(^an^ei^dclir^l0acrai^t^i^i^m the origiccl systemcoufiuriration ofl989iEveneftrrl993, mcog incremenSalohS diecemeenoИfУOoshappenedeon-ticuouslg totyef^;^ctem.Tne erioinaltravdltiпe of 90 micutes fortdeexprescservieebeceme s 60micrCes as of 1999w Willtr^^^^mee^d remein withihe in-

rreosed Travel ttme0HowoUout0inahciaivlabШtywhen the cosCismoretcendopnied?Fcrec noed tobeincreased to maintainfiocpciai o^ariilileilintidoreercdCors^s will reTure thecmochO accercn-n to The demandlsprice-elestic-itg. Cftdw higC-speeO roiiwegspstem isgoinfto simare the right-of-wog withtdeexistino will hapten to

the muchtoutedexpeajedrcpasitnexpension?W0aS will be thednnrct t^fti^erccee^l^f^nomic co^^l^si^n^^e demand mneconodцcchdimmoleiviabiИtyÇh0loginochecksebout these issue o wiïi aielriy See ]^^(Птр^С1е1^]^сйоп.

4.1.5 Priilo i^b^i^i^t^iitóo^noei sbfety

The steliarseaety record nndFrench

high-sseen o^al^o^(^sisci^t^mjwasmdehc^i^\^i^(^(^(^dcc one of theiosporlms irimnieolsfor aheKTXprojoltt from the outset. PosslbSyurd of thiilrust,hipe ynSiirpecccption oc safetyalso n^£^l^e^diicriSleoli(ole^]e;p:ioji^(^i progress, usucllg in onegativewaerTheroute osSИfSangri tun-cel wasre-duutedtodetУornesrbg dlnmines, desnite advire fromenperlsagoinstthe 0а1ош. TУeUeSouredded et ieastt0deeeySsaorlacstorheprojaeS pub-

lir S^^^c^^i^a^rcr^t oшwsynrishstУch спутЕет. Engineer hes betterПrfydmtюn,anddшywsrisnпlУreobeecSively. But pubhcohSpohticelnodirshavomotesimpiistio view ocrisksochd ilia gerodiPfisoltto oyntroLWOenlhere is some ^i^c^c^"^ntintiiecon^i^pu^^ion!5i^^,n^(^r^ieiit^r^e and Sublir percepСiynnInaliyprevl0jedoyerenginecsing jungmeиtl andendedeotraonpecesoseuburdocon the ПгоУуг- cysSchnduratiyu.TЫswerespeineПy Шит with the case wdcnthemedia reported somoprobloms with the aireadyconstinsteC otrupOures otthe on^ <^J6 1996. It elmost ^^(^i^i^"^dtye]^:jo^efti^^i"mt^rctncy(^ne nean After thct incedent 'fnreicc i^i^jo^rois^onl^^^i^^wCTomc^l^ihzed ic as mooebroaderscale.

4.1.6 Dboleloa makingprobess

The organlzalionalrhart oftde KHRCissiown in nigure 3 .TOe emoion ofiabosongoverиmfУtegencies regcrnicg highispeedraijwey is as fchlowsodHRC is in rherge ofconstmction;KoreanNotionalRaiiway (KNR), oserctioc; ^r^d MOCT,overa1lcyordinctiocandpgiicy-

maOing. MorelmgoiOcnt grganizatlonai islrlelstfm 2rom She structureenPresponr-billte of KHRC enPllia rela-S-ensh-d of K]RCCwiMMOCT.Thyotnorirsue it the ef-fecS-ceness ofthcSpeciilCommittaeie tCa eiwaidacision maOing bodyreoerdlnoghehiuh-gpeedraiiwayproject. Id cande 7eiУthyttheeoanco tiratdeciCespglmportant -ssses shouIdnrvaancpncopriatecespoAribllite too. If dess-ble, when muMplaagenfies will CcinboIved,each agency's responsibl-1tiesigguIbbeclearIv definedet the sSarS oftTcpsoject.

Dedendicg ontVacouorrdra ^171X01(160 hrrdifCerent dewers ofautgority.LooCnlgd7ckal pestexperioncel, one mighS argueanggtgheauthoritogf -neSdecial!gпlmit-See oetVcSeoul-rb-sУ7lhgh-lpeed sailwag projeyVгnfe Spe-c-al Cgn!l1Sjeencs twenio-fivemembeIslnc-cningail the gebemmenSltmsgers wgygeloqCunftlgnnet amo connec-Sinn w1thtUy Dighsspeedreiiwcg project. dg2sgmrтittee is thefinaldeciiion-maninAbrdyreg7C<ring tliehigh-sdeed raliwayenOdichegy Airport project. 01x2 2011-11111-See dlahgletincibgyg tite original

Kysnnjs rgugelnl99O,epdrefOl!irmed itinl9s3. But, -nl995itUe MinisSryoI CuSe]re,whgse on]istclls2 member oftUacg!mitgea17gnedggrelgeyge gnsKyugnie route fer historic side preservationraeions.TheKnnnslii rvute erenSsally wasreiocagedinCanuarnl99У.ThereUes been ne newly dirfcvereg biitoric i^t^t^i^i^i^l^sorslta^ l^roni 1993 In 1995 a Apdarenglo O will he lUcdesircofaoernene in-relred c She prpjecStohaveasohdd7flslonmrAing body Shad hastUeCincitay.

4.1.7 Central-local governmenitoepecatipn

Ad the tlmaoO writigglnispadУr ttba -ecatlgn and dereledmenS methgdoflhenewmelnstetioninSegul is sSill ngtoffi7iallgdecided.MOCTdreeeyg tXrecisting Ceesl statton. whiicSegni aijgggo2rymentiikes to use She high-speedtaiiwadaileoareoatoPeeeigptUa area aresnd Yongsanstation,wnicheeoulciIyadcocftes for She malnstation.TnlcfactgrcontriPdSadggnc-eys in the drejecS's degress oCstatientofction ^sid ap-

dreach methgds wercommon to ilitha ciiyggnelIgments -nrelred. Theirrequiremenic ece eilih2sams .boild an sndergresnd approachendcSation.T-lesebronlcmrcould hare beenlgived7eirlycatiiy egttshare

dr-nc-dles andeУUerinotggnem, nutwhatactuyiiy happened waslnPacisioAbecausf pf doiitlcaiconcems. For example) changesm cSatignsvgfgcDsaod andDaejegn were firstonPerorsond111henabogegrouyd,finai1r be-ceming annl9U5 re-

specS-bely. Tirr folsldee-llggtohavepndar-cgrindltatigns

was basedonthe ai^^r^o^'^i^^^me^t^'i -nfldencУ:Thgse changes werenardlAbered onengineeringjndgment. The cesl sharingryU2maandservicacontraftcvncedt eould hare solvedtUeproPlemmora -asily.

4.2 Engineering andtprstructipr risks

4.2.1 Design

Standardand Code: Design¡ngrfonstruction cgdes are verylmggrtcntin reiiwey sdstemPevelopmon-. It is especially sginanewiinewilO i^e^w'li^jam^efDnology. ncepe, cgngentendstruatprf gfegdet are-!ryimcorgang. nx-sl-ng designfgPccandcynrgrufglynsdfciCl7atigns can be spgraded oreretA>bedeeelopenSromscyatch. 9lec0leye discusses men- asdeets ggdeecloninggbdes wish respecStoencine-ningsafety.

Kerean cgdereoerdlng D^i^h^^i^^^^ reiiweywer de-releped bffgrespacifiesygSemtУcnngiyoywer reiecged. If oneacgep-sУ2afaytShIU tKecgde dgessdec-Cy 'mini-msm') thefgdabeied gn the cgllcmvn denonmnator of Japan, i^v^^r^c^^, endGermanbinou ldngt p bsesdecial preblems. AsInowninAablrУ, ide De signnerel:oeters ef KTTp2mons1da1etniscoysctvctideapproaeh.The majer dhligsgdhjeslndevaigcingdeslbn darlebieg were:

- Diesel ioeomotiv<iinsulbbeabl2to icnonsnenew lin2;

- Prer-de rggmfor sdeenimnrvnement;

- Canacco2mioda1eroinngitock2 gfJad9d,Frence, and Germany.

9sS or^<^nestocbni5lt^^^w^^t^i^^^^priaj;i^r being censerbaS-be. Thisncrbeenvgfgftgehgtissuesergued frem thestart eУgne project.

CcmpldxityandSystem Idtegration: Te cairysut a largeiscale raliwayprpjactthaluselnon--nPlgengurtech-nelegy, onedruallyemкloysoulsiУe nelp.Tneguestipn In askisghalcvdeanntlmiye ob gutsidcasrisOncy. With She SepuiPq-sanhigh-speedrailwaynrpjerg, Amerigo- engineers were mainls ugilized intCr -nisiyidllfsypf the prejecS. Engmeerrfrnmghygjwaacppnlriyc thrt ht^ni highspeed weremte-itlonaliyaxcipdadag Hieioitial sSage. Igirvaryd-fficpig todecidethe prrnrandeons of each addrpachisog ililgpeУtbhavespmepnewhp can gire a more''pPjeciive']pdgCpy.Allo,vncetnesysgem is selecSed, engceelofrnmghasvsgembrgvidyrrhppld f^artici-paSe in te^cpsv^ect.

4.2.2 Conrtruction andinecasttulUeeeprocurement

When therystemproclesemenScSraltoywaseonsid-ered, thel%dcstraetprcdrpcpremens cgralaoywasalsp censidered concurrently [ OuacanpsetprjtieydrofPre-

RISK MANAGEMENTS ALARGE-SCALENEW RAILWAYNRAMSPORESYSTEM PROJECT-Evaluatlonof KoreanHighSpeed RallaayExperience -

S. D. SUH

ment overconventionalprocurementapproach.The risk involved ^ntp^enl^i^a'c^i^c^j^cts iv wen^t^rp^n^v^rieeal- in the Bccz-Allen12. The KpvrengovernmenitonOanenven-tionrl approachvvprturnkpO]and willingiytookmorp pitk inrnopcnfmOTP projactcontrol.

hie Program Menevprbodnwaspropospd at the initial studyanave,bntwip noceccpplpd.ProgramMan-ager wasrecnlmoeoUan csvnpmpapstospducp ri-ks involved miee proipatnevplnpmpnt.ExperOmrom cpustrips with hlgh-spppdrailwaoppspatipns]apdvt0crcpu-llrips were reconmlendediofillthcpoiittonialwlewijn local expertt. IniVaspcpnd amrndmeot pi^ie, pnpven see the budgeraiionatecl forthpPronramMe-lagpr.

4.2.3 Systems procurementproeedueeaed timing

It onenre tocOsesa lncmnstimnorisulУcnsp of all lheprrblnmslthasysrem ospynremnnt mplnod and its timing is thliais is theprecuernr toailsuUrpqueulissups. hhis isiVc d^<tejre^v^^ei^i^(S Woi tpa mortfai-renm-ng impact. Onp wap otrnother alipthasltruos ham spi-ip relevance tolhitCactor.

hie mpstekonnmenSalpsranlnm inranway vystem planninn elSprnatinsstUat are

combinftion yfsтstnmipclpl0lpgp,spuseapn trapspvrta-tion demands .nins lsOseauselhesa Cactprohovespme-tning tpPnwithtPersmainingfactprSl For example, tattem! teclnlpipgyUaclUasthevperetmo spelUidesign variable! andfanacitOpCtheaechnelpey. lUesem turn imhfct cost(reute,anPtrahrportPtiounfmands,Alae, the pouIu has aVnr-reackinnpnpactonsIetion-to-sIetiontravel time, andlhiswilllmoatftransportation demaeatTnere-nore is weuinnbt newisaaopsparats ihempremenlipned tntee factors. Bu( esaxpiameneerliar, aheyntacmУpr the Seoul-hutan hlgh-speedrailwanwatpCficlalivyaieaaed in 1994 , whjcnwasIwvyasds pCtprcpnjtrocrionOegan inl992.ISwPdidnpt fe fairtosaythea aheennmcers who pfrticipfted inaUeiechcicaisluPyoПSeOanddraCted the RFh dldootknowtOcconsequencnsor ahis-Tory had tunneped frpmaUashPdidihave-beenIavoldedPdykcn of doml extra wptPpnthpprelimiueryanglneeringsaudy top (^liirueet^^g^-^^^-terIts.

What isiocldUadmt-la syrtampspcnremenipack-fne isaisvvarnimpprtant. Wiih tUcSnhuiiPusenhigh-tpeed l^(^lln^(^s'P^rr^-aitt] IIsUoiiIU beUndcrstond tiiet the "mix-and-matcn" ^c^i^c^^l^t was etlemyled,anperently, witnout muchsocyats.Spcellen"niph-aecn•'sailway sys-temt, wheaheriVaymabbe cuaomaaeU aulPedlaensia (AGh) orhiah-tyeodiallwan(anelmownfornoing difficult tokoUersSeobbypappievthart-leneuvmsersand the

sustem suppliers. Ouacanyeetnatacertainryttem sup-pliep c£PlnovsamohopplywUere thesrsiemtheeare sup-pluine iscooypmad.Fprsnample• irlsbpcoming very difficult forouetobrincacon-rolynttem ^^^mone system andave it inanvtTar yystrm.Usuallylhx'(mlv-and-matcl" schpmpPvarnotauulylrtelУ wciitsthpsp high-tecn systemSieiitheRFP, svrtamnl'ovidpyswatpaskpd to submjtpropтsaispproiПngstofU,antomaticO•cin control, catenary! wiil spmpnpi0cepfinsavlace evymppring. hie WHRCfallaPthpsptyslpmsthp'(Opra('ynstpm. It wos ahp wianUulinniklng aathnatimp nlii^a wIHo Kime mi-nOT hplp wiidahpintprcesa essuran'lc,ipcal enviaeers could handlpaUpinSrestruetuoe.Ohprshadkoenтery serious andlonddebelesontheтror acio fbos aiyua the procurement meahod hTtp-dpt of prpckringpsrllal systems finallypгnoailod•Eveutuullodesiтordonybefore tie systpmyplacaiouunderwpntrevlpws hyTGV rngi-neert. hrpprtithp '•x:-ix-annimaa"h""alaampaCvrana high-tecn railwaysтstnmhasnighrisksaтkitnoiUor the Уaint-nearted. TpSaisтstnmprpcurpmpntapproachiy the pati toSaUp,wiantPa aptipnpУspIpcaloaiyshppring the tinal componenltCoraetualpursTaselOne hastodpeidp wist shpuldUapurchaspd ^-^t^^ri^ii^vt^^^^r^gi^-i^^ is involved njaVasyvtem.

4.3 Financial risks

Financial riskenalssit ^ortran^^t pvojpvcrpeplvpd muci ^n^l^^l^^^^.Ur^reU sral.14, AbacusOackooleuy13, and tie k-stiUjteCprUrbanTraIlsportctipn11, fprxomTplp, —8-cuttedfinanciairitTsinvvlvpk mtransiIpro-odat.As was stated before,CUsy p risksnaiytss arpUarenhl^aoily on probabilistic approaches, waichusuullnwerenot an svsilsble oplionrprthenewKTXprojdctlOatheinitial plskkine sfagp ,yeтsitivitoanalyt w\acr tarried put fpr nea variablps.

4.3.1 Funding scheme

Securinn spuMUm-lt forthpprojpd -^^i^^i^jii^ppr-tant. Thpekoaingschpop ^l^^^ifl^^s abeerindun the project's progrpssA Atthe iaitialkiakning, tpa ^or^i^Uility od pmpipying BuilV-Oyprate-TreтtVpr rchpowwasrlxid-ied, butdisfprUabbpcausp itwasdpclPcntvPoop too muci kWprpnt ritTe.ThosvsrlabllityoУaUpqostp supPM and at£rrappropriatplimaia csiticalforpralpcrl[muiempntatipn.

Accusscu yfcтstdalimeldt inaupryimnortant issue, l^utip- rpIrpspdpataeinitjcldPttsdstimaSds,whidh were baspdon thdepsreoepfpunllrOcT cysSpfJapan, France, and Gpnneuy, didnpIviodtaSjsCalltpra dstlmatds. hie c^i^^it^^ron^n^ stonls-pet pffbyabpul 6Ormiiipn won.

Table 4 Unit cost change

(Unit:millionwon/km)

1993 1998 Percentage Change

Land (1000 m2) 52 49 94.5

Roadbed 12,640 18,827 148.9

Track 570 859 150.5

Building (1000 m2) 1,165 1,605 137.7

R/S (Fleet) 26,400 43,821 165.9

Depot (1000 m2) 304 265 87.0

Electrification 1,693 2,299 135.8

Communication 981 1,201 122.0

Signaling 915 902 98.5

Design 322 619 192.3

Supervision 127 1,019 803.0

Miscellaneous 291 105 35.9

Program Manager 157 598 380.2

Research 224 165 73.5

Table inunitcost and

1998 15 per-

cent ofthetalnlcontinarease.

4.3.2 Joint venture/development

Ac canh c seen tntTaTablee,thn9erceifage of piivate fmds edited! irom 6percehttoKhcrcent. Amiantof m9neylhnlcon0amobiliwedwirhajoint ventare rshavvil9dependeitenIheneneraleconomic situation. Conslderingtnкsecentacioomiccrкir Korar has expeiienned, itshauldhaunhcrsr9od an ooeof the KHRC'c eCforistoreduceC9ndIngrisk.Risksine9lved with jomtncntкrer erebniceny 1herisksofthceconomic citaatiin.

4.3.3 Cost overrun

Coct overrunrcn chota eciegorizedchanengi-neeiinc/ninctiantiin risk. Aeerchn cocic ne IheKTXproject timpinent showed wwidediscra9nnonWetweenbslimated an9actualfiahres.Ais9iipuieosSincreasvh over the years explaine9muchoftheporIk>niC avstoverruneh9nrienced. Fii example ,aкrmgthel9t^9eceleha oeкr9eribh" labor tict increasedohaut1hreelf9kl.aodmalesiai costr,ready-mlxconcreteai>r examnle,increasonbyh0hcrcet1lDuring tfe sameheri9d,GNP inflafor SIic eonstruciinnlector lice aboue90pnrcene.^ClisinrreaIainunitnnrtcee9unted fil aboulSOpnrceif of thec9s1mcreclnen lbt(Camend-ment. enteremail9ngi8percenlwai ottributesl tolheehange il9el resullCrIofromtharouteIeniCnercrease.

4.3.4 Delay cost

Delay costalsocanbediscussedunder engineering/construction risk.The e^rin^ncS^c^nemi^i^ie^i^rba dote of 1998 washelygedto2002,and now20og ts^Tit for the first-stage operaeson.VariuotOaeiooseontributeOto this belay. AccordingsgKOTI18,

of ^t^(isui^Sa ^^(^i^s^ddr^guiIi^noiel,^^^]rogtir^gc^UIg}^ungju segment, slaeionloaationandorodnddduderorodndissues in S^^c^rrO, Denuu,andDaeleon, loeaiion netrahldepot were Ideneifledos themaiorcausesgfУeSay.TUny delayed thenrcecct fOTaimost fyusyests. Ceradeleycaused cost increasesinaddition SoenciclopportУdiSycoses. Di-rectprojectoosIsncreeseeouseУbopsojecrrlelauir about 05.5 percentofthototaic ottoverranexs>erienced be-tweenl993 eddl997.0na ceef^eeob^(^cti'^(^iwhuct much nrojectdelaynosanamagmoeCfecSoпprojectoosScontrol.

5. LESSONS LEARNED

OTe KTXnrojecldevelonmentwasoeniewed.Ma-jor rlskfoctотsweresvaluaCeabcsedonUheegpcriences from theinitial niaIoclngsregetg COs tesi ran sSage. Until the commiissioningio2004,there shdeldoe continoed efforts ofrisnmanagemeio to ensoresafc ennrelianie high-sneed ralSway.TUecnmuledlto oS not

permit anaoruundossIandino a^ll atl thosioksitigolved, Uut arlsasl some <tf snesebadtfactorrcouldbesgaluated. SomeoftUelosIonsleameУby evsidnthln iism rlokmnnage-menteffortsOnrtheKTXпcoIecteresummbueen below.

A newrasSwao systemlпvsseotlsverncompleb, and ekery eeforlsneulUbeexerciseO notSncompllceta it by adding morenrojecrgools.TscOnolygnIseusfer, reglonal dekelonment andthUes secondaryobsettloosshbuln remain assceodnary. ^TtC^e пcoInorgoeiisnotconcrcte and simnle, manydiCCerenldeoisioudodlasapproach the nrojeet withdifCerenranO gftenconflictinggosis. This is tery harmfulto theoosIadUduratson contrnifor the nrojeet. Itis oisonarnlmpотtsnttohenereelisSic ocope, scTedule andoost sstimeSes.nomntimes,ssshowhln the KOX projec0,nrojecldevelonmedrceu ice seriously distorted byeffortstomeec up Sorthadeleoceused by external reasons,rdsn csdelayin snsSemurgnurement. Also techdology SransfersnuuIUbefoousedon sysiemlntegra-tion, rathertnen rolilngstoon ynOy. There aremmy system specifsctesOnoigglosto baIseusfesren forsoocessful imnlementation. Thosetesdnoigglos eoenoS alwatsanail-aele pubhcly.Okvitingexpsstsfromthecountry tlot has

RISK MANAGEMENT IN ATARGN-SCANENEW RAIRWNTYNNSPSPORNSYMSTO PRNJECT-EvalUKtlonof KorsanHiRhSpeed RallaayExperlencs -

S. D. SUH

operation experience, wilPresponrlUjefhayoesfrom the initial sSageyftheworK(maycabtribotetorePureproject ritnt in a nigTcspeen reiiwappvoject.

It tekinoeconsesvetive

stance canyaUoaaprvjevteltks.BrU tlm rioOcePkclion is not automatiC(eod aisoromntimestqsre aosheavy costs involved wiahVeingSooconsorvntivelTneinillalnesign stsndsrds yf KTXlhetwere beIlevcbto Uaesuperset of svsilsble hlgh-speedrailwaosyylemsseodl0 cc^mmo-dste allipaea nighcspeedreiiweywau syrtams. Butafter tie systemyelaction,derignswentShroughextensive de-tign reviewproaats.Ofopurse, thereniewcaned for tome redesigns(eo0causepprvieat dalay.Cnenye of bridle typefrnmaC-CKX toPC-Bearm an^bc^lato PC-Box demonstratediUe ihiportance ocsoundenglneering codes andsSeodards.

nven wiihallthaisvosoadTreos will still

be remainingrieks. Il is tnalrVrecenlfOaraTterislio uature ot risks . UoyerSaintocarmatVenlimmateUky one-time rite managementproaaUpyas,patharilshobldkn on-go-inn etforls .CdtTivcanse,hegingcohtidProgram Man-sger teameodoooPeroanizationdudySoconsiantly monitor risk itemsandapdressmam isvitaliotтncess-tul projeclUoveionmenr.Usuallyprobabiiistiтripkanaly-tit and menevnment isnvt 16^,011X688)111 with a new rsilwsu project lacyaciallnwitha svrtem thatcves new tecnoologu. Probabliityfenbenevelvded witTOistorical data, but it isnotiheassewiththeClrsi hlgh-spred rail-was projectintheeountrn.ExperiencewSsheolstinv rail-was isqelnOul,bkSnoltufaidenS,Sofialand oolitical risks are higher wiinii^^w^anway vysiemcomderen wIHi the 0x111101 (WWo war consis-

tentlU causedUosoq-esociaiahdpoliiicalreas yns, for example, systemproerirement, ryuterejocctiyn,and station iocationeodtype.Uherefvrallismaodatocptv consider cymbinedeffapl iofsccialapo pyjiticalrisks, engineering risks, eon Cinanslalrisks. Inthlc sense, totslistic yrsystnmatifappryachssarpstryuolycdV'orated, instesdof apartlci yrolncemsalappryapn( Itoillhe help-tul SylUentiUv effeTit majvc

ritn. tfove yereful, it wiIlbecercdifficolt to isolate causesyTspeoiCic eltks,andpddress themiFor example, iheVacisiodtopcopure miy thc 'C osa" rnstem csutedhlghrieks,wl:Ujeconservotloe decIgn oariaPle law-ered ihem. Buiyneccn uolyebsenleshecombine0 affects ot lhyseUacisions.Prybabiiisticeiskettnsvmeтt using the Monte h^cir^oi^^ml^i^tion ivraaUiiv avalleble, angira good tool fydfineocialriskassessmentlSS, good

enougn SyadPretscymklnen effector poiitiael, evyineer-

iтg, ¡adl fimtncialrisks..tTjmCejmfeeУ mfllegemcd1]sc1leme ednuid behehelphfd. MhreeyseemcriranyroacnesshyulP be PeverypePtnPeehfenaernihalreanplieteiyn.

REFERENCES

1. Flanagan, R,anGG.Norman, Risk S^c^r^c^c^n^n^n^ntanRV^c^ns^t^Lit^t^on. Blaykwall E^Lt^n^ntit^L;Pul3yeiiVas^,t^f^r^t^or^.(1993)

2. RiUsvn, M.W.and F.E. Stiaifer, Dayisivn ^f^ciF^ikL^tie^stsiv tRtCon-strtytivn ¿V£^(3^s.P^6^voYo^^.(1982)

9. SkiRR, B.O,, RiskandHellubiiltv G Gtonn0EcaineerAo.Praceedinas vi rhevauHoHaynvoteanizoUbothe ii^^tVnt^0R ct AlvN Hncsneers, RCCCCC, Tr^c^n^^s^Hi^vc^c/r.ll^il^

4. Oaelvc, -TRi. RiskAnalvsiotor onSTransport. A &FnSvon,Londoo(1494)

5. Blvyklae, D,, Acoicaacico SoHetv. McGspw-Hill.Londoo(1292)

6. ROecHiN/^Li. HEnEcCvpsMateriaisdtassvoEatloL TiLkSnaissis;Quan-titstica Approacheofor PУFickaoOTraiSlNas Nosttan0ReinLalP, New Rvck. .1994)

7. CvlvmUv, A.G.anLR. S. diBustamante, Sestams Reliability Tshtss-mactl K;uwe/AsaaoniУтPubiishY1.(1990)

8. Haclaei EiJianH K Kumamoto, AcvUsUilistiy RiskTsnтsomont:Reli-sUilite Enalneeтlna . lnт^ici^.c^nL;Sr^^iт^^iAlATETcesn|RvwYork. (1992)

9. SmitO, V.K, Risk, Uncertalntv.andHheValup0vnafHenefitacdCosts. Vcl.4o/AdvanceninAppliedMipro-nconFmiLS,0AIPceнн,Greonwich. (1986)

19. Suh|Y.andK.a.PwLn,RicSAnтicd's for HleTwayProjecHi spapers of Cvnstcpytivn ReseaFchlsst;tтne",Sanyang UniveтAit1.(1997)

11. lnstitutetorUtbanSfтncpsrtp0oc,is0lana Univ., Finsnyisl Manaae-mаnt tordtassit -AQandbogR UM C^OTi April.(1983)

12. Bvvn-Allac 8c HomNtoninp. Evalupflcn otHousCon'd Tn^r^d^s^sn^xperi-acyai US MOT{1994)

19. AUefps

OcECsitAssoclation,EDMOT.(1696)

14. Ovpcec, Ai,P.J.BтinCnt|aRY S.W.AHayer, Fixed

GpiQawae Tsansit AssHomCondtFuctlon.SsportmbntotTcRCssorta-TIvc, Atashlngton. Y.C.(1994)

15.SpOi Sn li-naycc otHSR on the PationslTrpnsportatlonOystem, Tcvyaaaico otrneJointConfarencoca tCeKoreaTrpnsooiiT Institute, KcoasandlREOTS, Elance, HioO-SRaaa RallwavanLNationDiCavel-CRmact totrn2 21stCentutv.peoLpi H0t09.(1995)

16. COa, D.D.anE Si Suh.alacgicorat tSeTEt'ogslHianRpepdRailway Natwvck ^npc^reetl in HioQ GroanO systems I: TlECcico andagalnaengaPFOcae0inac oh tie bifbH ictetnatlonal Cvclacacya onl-HoRSpeeC CPoooOTcansbortation(HSRA) HosCems, MCIECOVI Fconda. Oт^tuac^r^2-^^.(1292)

17. SpO, Si s HeiFctloc мfOot;mumReufoтnd Nnm0EtofTlPCion tor the ShvpI-Tpsec HoCi SaacLRallwaR in HioO Spaed GroQnd OcECSRVctEtivc R^t^^^^n^^ T Elancinaan0EcaineerirOlPreceedivas ot tOa FicstlnHomatlosalConCafence onSlEhHcceVGarlm0Trpnsoorta-

^Ht5^T)Ast^H^mi^,0^t^e^r^rtF|rcicst^aiiOu^o25-r^5tO9.2992)

18. OOa t^o^í^^dtassvotf^n^PtntLi VevlsicnoFtheMastsf piEn^(^|| Seoul-TPSEC H^c^Cl SaacLRallwaRiPp0al,Hst09(1997)

ACKNOWLEDGEMENT

Fartial r^ur^r^l)r';Уel^h^e e(^a^nr^orl^f;CS hrejeet(The Korea ^aigjc^I^y ofndueetiog)iy h^cerl^Уully ackтowlengen.