ABSTRACT
When faced with design problems that have significant uncertainty attached, geotechnical and tunnelling professionals use the instrument of the Observational Method. The decision to apply the observation method, or not, to a given tunnelling design problem can be complex. This leads to debate amongst practitioners, who approach the choice from various angles, due to the absence of any agreed-upon decision criterion. To solve this, a framework is proposed using principles of economics, probability and decision theory. The framework uses the theory of Expected Utility, allowing for both tangible and intangible construction costs to be accounted for. The framework is tested using case study data from a recent Sydney tunnelling project. Following a survey of practising tunnel Project Managers, a new factor is introduced termed the Cost of Uncertainty. The proposed method is a sound starting point when choosing between implementing the observation method or not.
