All capital projects have an element of risk and uncertainty. In today’s business environment this requires more than just simply adding 10 percent contingency to the cost estimate to cover off project unknowns. Before sanctioning a project for hundreds of millions of dollars, Board of Directors need to know what possible cost and schedule outcomes exist in order to safe-guard shareholders’ investments. Contingency assessments must be:

• Risk-based

• Project Specific

• Repeatable

• Defendable

• Cost effective

Six years ago, Enbridge grappled with these issues and realized it needed to adopt a new method of assessing both cost and schedule contingencies. After evaluating options, Enbridge set upon developing an in-house parametric modeling solution for its contingency assessment needs.

This paper will:

• Identify various options for assessing contingency

• Review the Enbridge process

• Demonstrate the value of a simplified risk register

• Identify required data inputs

• Illustrate calibration and accuracy of assessments

• Discuss business advantages of parametric modelling

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