Managing Interdependence-Induced Systemic Risks in Infrastructure Projects

Abstract

Complex by nature, infrastructure megaprojects rarely meet stakeholders’ expectations. A key characteristic of such complexity is the interdependence among different project stakeholders (e.g., contractors) where disruption of one contractor’s work may instigate (system-level) systemic risks, resulting in poor key performance indicators (KPIs) of the whole project. Attributed to the lack of appropriate analysis and quantification tools, managing the systemic risks resulting from such interdependence remains challenging. The current study fills this knowledge gap through proactive systemic risk management (i.e., early identification, analysis, mitigation, and continuous monitoring). The study enhanced and operationalized a previously developed conceptual framework, in which interdependence was quantified through employing complex network theoretic measures. Specifically, the current study correlated contractor interdependence to project KPIs in order to assess associated project systemic risks. Subsequently, a metaheuristic optimization technique was employed to reorganize the project’s schedule—effectively managing interdependence-induced risks. To demonstrate the utility of the developed methodology, a power infrastructure project was considered. Finally, the study provides valuable insights to improve the performance of complex infrastructure projects through proactive systemic risk management, ultimately enhancing the overall project’s hyper resilience (i.e., to interdependence-induced disruptions).