PurposeThis study introduces the heritage city risk dimension of the urban rail transit (URT) projects. It aims to identify the risk factors affecting URT projects within the unique context of heritage-rich cities, exploring their interrelation and evaluating critical factors.Design/methodology/approachThe research adopts a multi-case exploratory study to identify the unique challenges faced by URT projects in heritage-rich environments, followed by a comprehensive risk assessment framework integrating Fuzzy Decision-Making Trial and Evaluation Laboratory (DEMATEL), Analytic Network Process (ANP) and Risk Interaction Network (RIN) analysis to assess identified risks in the context of Kathmandu Valley. Additionally, a risk response action is simulated using RIN analysis.FindingsAbout 16 risk factors were identified from the case studies and evaluated using the proposed risk assessment methodology. The study reveals a highly interconnected risk environment, with heritage impact-related factors exerting the strongest causative influence on cost and social engagement factors. Community opposition (R8) shows the highest betweenness centrality, indicating its central position in risk propagation across the network. Cost-related risk, social demand contingency (R2) ranked as the most critical. Simulations of a targeted risk avoidance strategy showed that addressing only three key high-betweenness centrality factors (R5, R8 and R15) reduced overall risk interactions by 46%, simplifying the risk network, reducing project complexity and improving manageability.Practical implicationsThe findings emphasize that project managers, urban planners and policymakers should integrate heritage preservation concerns when planning and executing URT projects in heritage-rich cities. Moreover, the research highlights that effective community engagement serves as a key strategy for reducing risk propagation and plays a crucial role in overall project risk management.Originality/valueThe study contributes to the underexplored context of URT projects in heritage-rich cities, providing a comprehensive risk management framework for identifying and assessing project risks intersecting with urban development imperatives and heritage conservation objectives.