In Connecticut, Has Risk Management Gone Awry?

Connecticut has always been known as the Land of Steady Habits. Last week, however, it also became known as the Land of Miserably Unhappy Commuters.

That’s because the high voltage feeder cable that powers the New Haven (Connecticut) to Grand Central Terminal (New York City) commuter train line failed last week. Stranded passengers were told to expect little or no train service for up to three weeks.

So why is this a prime example of risk management gone awry? It appears that the Metro-North rail system has always maintained a secondary electrical system. But two weeks before the failure, engineers removed the secondary system from service for maintenance upgrade work without replacing it with any other temporary resource. Thus, when the primary feeder cable failed last week, there was no other system in place to power the train line.

Regrettably, Connecticut Governor Dan Malloy noted that Metro North officials appeared to have been taken by complete surprise. He said that “there appears to have been little plan(ning) for this type of catastrophic failure.”

The discipline of Enterprise Risk Management (ERM) embraces a few key principles. Organizations must identify potential crises before they occur. For crises that are relatively likely to occur, preventive controls must be implemented to reduce the likelihoods. And for events that will be relatively costly if they occur, crisis response functions must be implemented to contain the costs of failure.

Did the folks at Metro North follow these principles? Because a failure of the primary feeder cable could inflict so much damage on commuters, one may question whether the secondary system should ever have been removed without the temporary implementation of another crisis response function. And because the severe aging of the electrical fleet and infrastructure makes such failures relatively likely to occur, one may ask whether the primary system (as well as, or perhaps in place of, the secondary system) should have served as the focus of preventive maintenance work.

In other words, Governor Malloy’s own observations reveal that the public transportation agency was following a risk management plan that was bound to go awry. And now the commuters of Connecticut are bearing the brunt of that failure.