Supporting Templates
Variation across Tiers
For Tier 1 projects, the Project Team should quantify risks using stochastic techniques in order to develop a project contingency allowance. The Project Team should develop a contingency allowance for each shortlisted project option.
For Tier 2 projects, the Project Team is recommended to quantify risks using stochastic techniques; however, this should be tailored to suit the requirements of the project.
For Tier 3 projects, the Project Team is only required to provide a table of the key risks that informed the project’s Tier Allocation, and can quantify risks using deterministic techniques.
Purpose of this section of the Business Case
The purpose of this section is to identify and assess the risks and uncertainties that are associated with the project, understand how they may affect outcomes and identify risk management strategies to reduce or manage their Impact.
The risk analysis process is critical for all investments. The process identifies the risk sources and events, analyses their Consequences and Likelihoods, devises and implements risk Controls and Treatments, and determines an appropriate contingency allowance within the cost estimates to ensure the Sponsoring Agency achieves its procurement and service delivery goals. The Project Team should refer to the detailed Risk Analysis Guidelines for more information on the risk analysis process required for the Business Case and to the Office of Climate Action (OCA) guidance on climate risk.
The Project Team must answer the following key question in this section:
- What are the key risks identified during the risk analysis process? The Project Team should consider risks throughout the project’s life: planning, design, procurement, construction, operations, maintenance and decommissioning. These risks should include environmental and climate risks.
Content required for the Business Case
Within this section, the Project Team should include a summary of the key risks and uncertainties it has identified, with reference to further detail in the Risk Register.
Risk analysis process
This section is not required for Tier 3 projects.
The Project Team should detail the approach taken and the activities undertaken during the risk analysis process.
Key project risks
The Project Team should provide a table in this section which includes the following:
- Description of key risks and uncertainties, including environmental and climate risks
- Implemented and planned Controls and Treatments for each risk
- The Consequence, Likelihood and Impact ratings of key risks (not required for Tier 3 projects)
- A summary of how risks have been allocated (not required for Tier 3 projects).
Appendices required for the Business Case
The Project Team is required to attach the Risk Register as an appendix to the Business Case (where appropriate for Tier 1 projects, the Risk Register for each shortlisted project option should be included). For more information on the Risk Register, the Project Team should refer to the detailed Risk Analysis Guidelines.
Footnotes: