Risk Based Project Governance Models for Large Scale Transportation and Energy Projects in the United States

Abstract Transportation and energy infrastructure projects in the United States are characterized by large amounts of capital investment, long implementation timelines, complex stakeholder environments and risks that cut across technical difficulty, financial risk, environmental sensitivity and regulation. Passive reliance on project governance routines, that do no more than trust in inertia or other such routinized compliance triggers are insufficient, because it does not capture the dynamic and uncertain nature of megaprojects. This article presents a new risk driven project governance framework for large transportation and energy projects, characterized by dynamic decision making, targeted observation and ongoing recalibration of the information on risk. Through a forensic analysis of extant governance frameworks, and with the aid of exploratory comparative analyses to U.S. project practices we tease out governance deficiencies in risk assignment, accountability and interfacing between implementing agencies. The model describes the level of governance intensity required at any point in a project’s life cycle based on comparison between an assessable risk profile for a specific project against a standard (desired) risk profile established through quantitative based risk assessment, and corpus of knowledge associated with stakeholder management and performance measurement tools. The findings imply that risk informed governance leads to better cost, schedule performance and public accountability of infrastructure projects, which yield certain implications for policy makers, project sponsors and delivery agencies.