The Channel Tunnel

Implementation Phase

BACKGROUND

Construction of a 32 mile underground tunnel connecting England and France.

Provision for a high speed transportation system connecting two countries.

No government involvement Largest privately funded project; funding underwritten by bankers Final bid - US$5.5 Billion. The country with highest standard would prevail.

4. Closeout Phase-Reflection on overall performance, settlement of claims, financial status, and post-project evaluation.

1. Inception Phase-Historical background, overall objectives, political climate, and pre-feasibility studies.

2.Development Phase-

Overall planning, feasibility studies, financing, and conceptual design.

3.Implementation

Phase-Detail design, construction, installation, testing, and commissioning

Inception Phase (Drawbacks )

No interference from government to avoid government economic pressure on Estimation of Cost.

Scope was not Planned well – Budgeting, Estimation and Resource Planning became difficult.

Complex Schedule and Lack of logistic planning.

Risk Impact not taken into consideration.

Quality and Specification issues

Scope was not clearly defined which lead to scope creep and consequently caused increase in project cost.

Interference of IGC in approach, construction , operation and safety of tunnel lead to loss of control of scope.

Scheduled planning was not done ;activities related to definition, sequencing and duration were not defined.

Development Phase

Started in 4th Quarter of 1987

The concession contract was awarded in response to the Channel Tunnel Group (CTG)/

France Manche (FM)

Project Ended on 15th December 1994, with handing over the project fully functioning.

Winning was made under a BOT arrangement, granting (CGT/FM) the concession to run the

project for a period of 55 yrs .

Having won the request for proposal (RFP) , CTG /FM awarded a “

design/Build/commission” construction contract to TML

PARAMETER RATING

Scope management 2

Time management 2

Cost management 1

Quality management 4

Human resource management 3

Communication management 2

Risk management 2

Contract management 1

1-Very poor, 2- Poor, 3- Good, 4-Very good, 5-Excellent

Scope Management

Rating - 2

SCOPE CREEP

Reasons:

Doors were widened from 600mm to700mm on IGC recommendationwhich led to a 9 month delay in theproject.

Tunnel air conditioning was also takenup much after the contracts wereissued.

Time Management

Rating - 2

DELAYS

Reasons:

There was a 9 month delay in the project due to the alterations made to passenger doors.

It took 19 months more to finish the implementation phase which resulted in elevated project carrying cost and lost revenue.

Cost Management

Rating - 1

LACK OF FORESIGHT

Reasons:

The French used advancedequipments for grouting while theycould very well have done the samewith simpler and cheaper equipment.

The initial bids that the contractors made were very low and when later provisions were to be made for doors and tunnel air conditioning , they incurred heavy losses.

Quality Management

Rating - 4

GOOD COORDINATIONReasons:

Both countries followed different specifications and it was decided that the arbitration on any detail would be done by considering higher of the two specifications.

IGC came up which certain strict safety and quality measures which were to be followed without questions.

Human Resource Management

Rating - 3

ABSOLUTE FOCUS ON QUALITYReasons:

The boring of the 3 tunnels for 32 miles from both the borders across the channel was completed in 3.5 years, which showed how efficiently the Human resources functioned and were managed.

Politicians, governmental workers, bankers, lawyers and analysts were instrumental in merging historical perspective and economic challenges into an approved project plan.

Communication Management

Rating - 2

INADEQUATE COMMUNICATION

Reasons:

Communication was prevalent on a formal level which is evident from the quarterly meetings that were held between the 2 countries and the concerned authorities.

Since there were a large number of parties involved , the project structure became complicated and many logistical and communication challenges arose.

Risk Management

Rating - 2

UNDERESTIMATION OF SCOPEReasons:

Decisions made in the inception phase were not assessed for risk management.

Engineering risk were focused more upon than the process and approval risk.

Involved authorities were not prepared to deal with level of IGC oversight and change controls.

Fast tracking of work was proposed and practiced which greatly increased the risk.

Contract Management

Rating - 1

IMPROPER FORMULATION

OF CONTRACTS Reasons:

TML issued fixed price contracts under pressure from the government to vendors and sub contractors. To win these the contractors bid very low without judging. This led them to incur losses in the long run.

There should have been one contract in one language and based on one legal system with clear dispute resolution.

The contract given to TML was a BOT one which ultimately did not help generate the required revenue.

To avoid large international construction projects if the involve countries do not share a common interest

Sufficient government support and communication channels are required.

All share holders must have common interest and detailed understanding.

Coordination between partners, subcontractors and investors is required.

Risk and Change management should be properly practiced.

Lessons Learnt

Why the project was success from project management point of view?

The tunneling it self was completed three months ahead of schedule .

Quality management was a success.

Team work was commendable.

Better commuting facility improved quality of living.

In 1996 the American Society of Civil Engineers identified the tunnel as one of the Seven Wonders of the Modern World.

Loss of Six month revenue due to delay in opening.

Service disrupted due to technical problems.

Market impact , damaged customer confidence.

Why was the project a failure?