APS1031 Infrastructure Planning
A. H. Hay (alec.hay@utoronto.ca)
11 Sep to 11 Dec 2023, Mondays 2 pm to 5 pm
• “I wish to acknowledge this land on which the
University of Toronto operates. For thousands of
years it has been the traditional land of the
Huron-Wendat, the Seneca, and the
Mississaugas of the Credit. Today, this meeting
place is still the home to many Indigenous
people from across Turtle Island and we are
grateful to have the opportunity to work on this
land.”
Theory, concepts, discussion tutorials & project tutorials
Two assignments, each 10% of total marks
One multiple choice exam, 15% of total marks
(30 questions in 45 mins)
One project, 45% of total marks
(Real task, real client, real time)
Final exam, 20% of total marks
(Two essay questions from five possible in 1 ½ hours)
A Theory of Infrastructure
Vitae system of systems (VSOS)
Each infrastructure system
connected to another, each
asset a component of
multiple systems, each
system a whole in itself and
a component of a larger
system
(… holons?)
Bristow 2015
Vitae system of systems (VSOS)
“A city is a complex concentration of dynamic
and diverse properties – a vitae system of
systems – comprised of operationally and
managerially independent systems, distributed
geographically, which as whole and by parts
evolves, adapts, self-organises and produces
emergent behaviour.”
Bristow 2015
PURPOSE
Value
Strategic/
Unifying
Demand for
service
Operational
Service
Functional
Enables
service
COP
Common
Reference
Models
(how does it work)
Domains
Decision Making
Common
Reference
Decision Support
Wisdom
(COP)
Knowledge
Information
Data
Understanding
PURPOSE
Health … “complete physical, mental
and social wellbeing and not merely
the absence of disease or infirmity”
WHO Constitution
Change in dynamic is a change in value
change ≡ risk
Risk Context in constant flux: identify the trends
Sequence Risk Horizons by risk profile
and derive implications for each
“I know what may be because I understand what is”
Vitruvius
Which is more
accurate?
‘liability ... where an infrastructure stakeholder complies
with the minimum standards set out in laws ... but fall
below the standards of a reasonable person’
Koval & Gherbaz, Torys, 2008
creativecommons.org – Mirari Erdoiza
Provincial Government
EQUILIBRIUM
Strategic Framework
Water, energy, transportation ...
infrastructure networks
Demand
Stress
Enable
Economy
Auditable, Repeatable, Objective
(Evidence-based understanding of the current
VSOS, from which to interpret implications of
different scenarios on your objectives and priorities)
Language of risk is common to all professions,
so use it correctly.
Probability & Likelihood
Effect of uncertainty on objectives
ISO31000:2018
The possibility that an event will occur and
adversely affect the achievement of
objectives
COSO ERM:2004
Hazard Strategic
Internal
Pure
Risk
Arises from property,
liability or personnel
loss exposures
Arises from the effect of
market forces on
Speculative
financial
assets or
External
Risk
liabilities
Financial
Speculative
External
Risk
Arises from trends in
the economy or society
Arises from people,
processes, systems or
controlsPure
Internal
Risk
Operational
Risk Criteria: reference standards,
measures or expectations used in judging
the significance of a given risk in context
with strategic goals
Correlation: a relationship between
variables
Risk Criteria
Exposure: Any condition that presents a
possibility of gain or loss whether or not an
actual loss occurs
Risk Criteria, Correlation
Risk Horizon: the period of exposure
Risk Criteria, Correlation, Exposure
Risk Profile: A set of characteristics
common to all risks in a portfolio
Risk Criteria, Correlation, Exposure,
Risk Horizon
Law of Large Numbers: a
mathematical principle stating that as the
number of similar but independent exposure
units increases, so does the relative
accuracy of predictions about future
outcomes
Risk Criteria, Correlation, Exposure,
Risk Horizon, Risk Profile
Decision-making criteria
Reliability and sufficiency of evidence
Defining the issues
Value at Risk (VaR): A threshold value
such that the probability of loss on the
portfolio over the given time horizon
exceeds this value, assuming normal
conditions.
Risk Criteria, Correlation, Exposure,
Risk Horizon, Risk Profile, Law of Large Numbers
VaR Threshold
50
40
Likelihood %
30
20
10
0
-40M -30M -20M -10M 0 10M 20M 30M 40M
Asset Value $
5% VaR of $30M over 2021Q3
... There is a 5% likelihood of losing
$30M or more over the third quarter of
2021
Organisations covering the risk
must provide ‘economic capital’ for
credit rating
AA standard : 99.95% threshold
0.05% chance of losing more than funds held
Three conditions for loss:
Asset Exposed to Loss
Cause of Loss
Financial Consequence
Four types of loss exposure:
Property Loss Exposure
Liability Loss Exposure
Personnel Loss Exposure
Net Income Loss Exposure
ISO31000:2018 ERM Principles
•
•
•
•
•
•
•
•
•
•
•
Creates and protects value
Be an integral part of organisational processes
Be part of decision making
Explicitly address uncertainty
Be systematic, structured and timely
Based on best available information
Be tailored
Take into account human and cultural factors
Be transparent and inclusive
Be dynamic, iterative and responsive to change
Facilitate the continual improvement of organisations
Integrate with existing
processes
Risk Treatment
Avoid the risk
Modify the likelihood/impact of the risk
Transfer the risk
Retain the risk
Exploit the risk
Optimum risk
Inherent
Impact
Residual
Optimum
Likelihood
Whole Cost of Risk
Cost of the residual risk
(usually the whole cost of loss)
plus the cost of all risk treatments
Risk Evaluation
Study the organization, operation and context.
1. Define your risk horizons
Then …
2. Location risks (Hazard)
3. Operational Risks
4. Strategic & Financial Risks
… and how you might treat them
External
Strategic
1. …
2. …
Financial
1. …
2. …
3. …
Project
Reserves
1. …
2. …
Strategic
Contingency
Operational
Residual Risks
1. …
2. …
3. …
Treatments
Internal
Hazard
Key Performance Indicator - KPI
Provides a measurement of
progress towards achieving a goal
or objective
Creative Commons – York Region
Key Risk Indicator - KRI
Provides warning that an identified
hazard may be realised
KPI & KRI reference objectives & capabilities
When aligned, they provide a true picture of situation
Thank you