activities must be in balance with the resulting increase in life expectancy. At present it is just
stated that this problem constitutes a decision problem which can be analyzed using cost-
benefit analysis as will be illustrated in later chapters of this book.
At present (see Lind (2001)) approximately 10-20 % of the GDP of the developed countries is
being re-invested into life-saving activities, such as public health, risk reduction and safety.
Furthermore, for example in the USA the economic burden of degradation of infrastructure
amounted to about 10% of the GDP in 1997 (see Alsalam et al. (1998)). From these numbers
it becomes apparent that the issue of safety and well-being of the individuals in society as
well as the durability of infrastructure facilities has a high degree of importance for the
performance of society and the quality of life of the individuals of society.
1.2 Introduction to Risk-Based Decision-Making
As outlined in the foregoing chapter, engineering facilities such as bridges, power plants,
dams and offshore platforms are all intended to benefit, some way or another, the quality of
life of the individuals of society. Therefore, whenever such facilities are planned it is a
prerequisite that the benefit of the facility can be proven considering all phases of the life of
the facility, i.e. including design, manufacture, construction, operation and eventually
decommissioning. If this is not the case, clearly the facility should not be established.
On a societal level, a beneficial engineering facility is normally understood as:
Being economically efficient in serving a specific purpose,
Fulfilling given requirements in regard to the safety of the personnel directly involved
with or indirectly exposed,
Fulfilling given requirements for the adverse effects of the facility on the environment.
Based on these requirements it is realized that the ultimate task of the engineer is to make
decisions or to provide the decision basis for others such that it may be ensured that
engineering facilities are established in such a way that they provide the largest possible
benefit and so that if not proven to benefit they are not realized at all.
Example 1.1 – Feasibility of hydraulic power plant
Consider as an example the decision problem of exploitation of hydraulic power. A hydraulic
power plant project involving the construction of a water reservoir in a mountain valley is
planned. The benefit of the hydraulic power plant is for simplicity assumed associated only
with the monetary income from selling electricity to consumers. The decision problem thus
simplifies to comparing the costs of establishing, operating and eventually decommissioning
the hydraulic power plant with the incomes to be expected during the service life of the plant.
In addition it must of course be ensured that the safety of the personnel involved in the
construction and operation of the plant and the safety of third persons, i.e. the individuals of
the society in general, is satisfactorily high.