Poland’s A2 MotorwayOperational Risks

Team 2: Yusuf Akkoca

Tom Bloom Karen Delton Shweta Hire Eric Johnson

David Mahzonni

Operational RisksDefined:• “The risk of loss resulting from inadequate or failed

internal processes, people and systems, or from external events” - Basel Committee

• “A form of risk that summarizes the risks a company or firm undertakes when it attempts to operate within a given field or industry. Operational risk is the risk that is not inherent in financial, systematic or market-wide risk. It is the risk remaining after determining financing and systematic risk, and includes risks resulting from breakdowns in internal procedures, people and systems”.

- Investopedia

Heat MapConsequence

1 2 3 4 5

Likelihood

1

2 2

3 3 1 4

4 6 5

5

1 OC Managing/Operating Motorway - Lack of Experience

2 Toll Revenue - Affected by alternative routes

3 Toll revenue impacted by national economy

4 Poznan bypass not completed

5 Can operational income fund maintenance and debt

6 Toll charge too high or too low

Operational Risk # 1

• Risk: - Operation Company (OC) managing and operating

the motorway poorly.• ID & Assessment

- No, not considered• Risk Bearer

- Autostrada Wielkopolska, S.A. (AWSA).• Mitigation

- Closely monitor management of operations

Operational Risk # 2

• Risk: - Toll route negatively affected by alternate

transportation routes.• ID & Assessment

- Identified & Assessed• Risk Bearer

- AWSA • Mitigation

- Government concession agreement to not build or improve competing roadways.

Operational Risk # 3

• Risk: - Toll route negatively affected by the national

economy.• ID & Assessment

- Yes, identified & assessed.• Risk Bearer

- AWSA, Government & Banks.• Mitigation

- Insurance

Operational Risk # 4

• Risk: - POZNAN bypass not completed by the

government.• ID & Assessment

- Identified and assessed• Risk Bearer

- AWSA• Mitigation

- Concession agreement with government

Operational Risk # 5

• Risk: - Will operational income fund maintenance and

debt services?• ID & Assessment

- Identified, but do not understand full ramifications.• Risk Bearer

- AWSA, banks, shareholders & citizens.• Mitigation

- Close monitoring and management of toll prices.

Operational Risk # 6

• Risk: - Toll charge priced too high or too low.

• ID & Assessment- Identified & assessed, but not accurately.

• Risk Bearer- AWSA, banks & government.

• Mitigation- Reiterative evaluation and flexibility of toll rates.

Cash Leakage

• OC income from a fee not from tolls, so tolls may not be gathered.

• Lost tolls, or more expensive maintenance will reduce debt service.

• Toll booth operators pocketing tolls money.

Thank you!

Team 2: Yusuf Akkoca

Tom Bloom Karen Delton Shweta Hire Eric Johnson

David Mahzonni