Execution Risk
Enbridge’s ability to successfully execute on our organic growth projects may be influenced by capital constraints, third-party opposition, government approvals, cost escalations, construction delays and shortages. Our significant growth plans may strain our resources, and are subject to high cost pressures that prevail in the North American energy sector. Early-stage project risks include right-of-way procurement, special-interest group opposition, crown consultation, environmental and regulatory permitting. Cost escalations may impact project economics. Construction delays due to slow delivery of materials, contractor non-performance, weather conditions and shortages due to the overheated energy sector may impact project development. Labour shortages, inexperience and productivity issues may also affect the successful completion of the projects.
To mitigates these risks Enbridge has a clearly-defined management and governance structure for all major projects. We also mitigate capital constraints and cost escalation risks through commercial agreements. In addition, we have developed strategic relationships with suppliers and contractors, and use cost tracking and centralized purchasing on all major projects.
Our emphasis on CSR promotes positive relationships with landowners, Aboriginal and Native American groups, and governments. As well, we have aligned compensation programs, communications, and the working environment to attract, develop and retain qualified personnel. In early 2008, we changed Enbridge Inc.’s senior management team structure to further support successful project execution.