Risk management in water supply

It has been acknowledge that the decision-making process involved in water supply project appraisals have not been free of risks. In order to optimise project investments and resources in the context of objectives and targets, all financial, managerial and technical resources need to be systematically controlled through risk management procedures. It is essential to identify the most significant risks and apply the most effective mitigation measures. The CASPAR (Computer Aided Simulation for Project Appraisal and Review) Risk Management software package is applied to a case study project to evaluate the role that risk management can play in improving the commercial viability of water supply projects over extended project horizons (typically 25 years). Key risks are identified and the financial implications of risk mitigation measures for such risks are evaluated.