The third stage of evaluating risks
determines the size of the risk, preferably
in quantified terms. For each identified risk
there is a need to determine the magnitude
of the frequency of occurrence for the
consequences and the magnitude of the
consequences. This includes identifying
the probability of the initiating event
occurring, and the probability that it will
lead to business consequences, as well as
the identification of the chain of causes,
leading to a root cause. It will also identify
existing controls in place to control the risk.
The tool leads the user through a series of
steps to rank risks for treatment evaluations
and to identify treatments to eliminate root
causes or to control risks.
More Risk Management Resources
A risk management framework for water quality assessment is
presented in the Foundation report, Application of HACCP
for Distribution System Protection (2006, order #91131/
project #2856). The Hazard Analysis and Critical Conrol Points
(HACCP) system helps utilities focus resources on key risks
to improve emphasis on operation’s processes and controls.
Twelve sequential steps are used to plan and implement a
HACCP system. For each significant hazard identified, the
utility identifies critical control points in the process where
consequences of failure are irreversible. Critical limits are
established for the critical control points, monitoring is
established, and corrective action plans are developed.
A risk management methodology for capital maintenance
in the water industry is presented in the Foundation report,
Applicability of Reliability Centered Maintenance in the
Water Industry (2006, order #91138/project #2953). Reliability
centered maintenance (RCM) is a process used to determine the
maintenance requirements of an asset in its current operating
context. It is a scientific and systematic approach to ensure
the right maintenance task is done at the right time and the
maintenance dollars are applied in the most effective manner.
In following the RCM process, the identification of the failure
consequences helps the utility identify the potential risk of asset
failure, which helps to prioritize maintenance requirements to
The fourth stage of identifying the options
includes identifying and evaluating available
treatment options and establishing the ones
that are viable for implementation. The tool
allows treatment to be ranked in order of
financial benefits or overall risk reduction.
The tool allows users to choose their
preferred options, rather than forcing the
calculated best option to be selected.
The fifth stage of risk treatment is the
funding and implementation of the
treatment. Treating a risk does not usually
eliminate it, but rather reduces it to a
lower value residual risk. The tool allows
identification of residual risk from the initial
risk reduction provided by treatments.
Monitor, review, communicate, and
consult are identified as necessary for each
of the five stages and involves checking
the treatments that have been delivered,
evaluating tolerated risks, and reviewing
The report, Tool for Risk Management of
Water Utility Assets and the accompanying
CD-ROM that contains the tool are available
to Foundation subscribers as order #91246/
project #4126. In 2009, the electronic
tool was integrated into the SIMPLE:
Sustainable Infrastructure Management
Learning Environment (order/
project #4013) Website under SAM-TOOLS.
The research was funded by a group of
members of the Global Water Research
Coalition (GWRC). The lead was United
Kingdom Water Industry Research (UKWIR)
and the other funders were the Water
Environment Research Foundation, the
Water Research Foundation, and Water
Services Association of Australia. Mott
McDonald was commissioned to develop a
framework and tool for risk management of
water utility assets.