Determining The Consequences of Failure

For every event there will be outcomes. It is the consequences of these outcomes that needs to be identified and quantified so that risk cost can be calculated.

Consequences result in direct and indirect costs, and depend on factors such as damage to assets and property, together with ancillary social and political impacts. The list below shows all of the typical consequences of failure for assets:

Consequential Costs

• Effect on Public Health
• Public and Staff Safety Risk (Workcare/Public Liability)
• Damage to Private Property
• Effect on Business
• Effect on Essential Services
• Damage to other Utility's Property
• Political sensitivity to the organization
• Disruption to Traffic
• Disruption to Public Transport
• Inconvenience to Local Residents
• How many people will be affected by X percentage loss of service?
• Damage to the Environment
• Multiplier effects on the community (the Elderly/Children/Risk Groups)
• Public Image/Public Relations Loss
• Other Legal Liability

Direct Costs

• A Difficulty to Repair Cost (Access)
• Availability of Repair Materials (Spare Parts, etc.)
• What is the cost of providing the service while the asset is failed?
• If the asset fails totally, what direct loss occurs through the Replacement instead of Rehabilitation Option?
• The actual cost of the Repair.