CASE STUDY ON CHUNNEL TUNNEL PROJECT
Team 5
Overview:
•
•
•
•
•
Designed to create spur in Economic Development
Improve the trade relations with alternate high speed transportation
One of the largest privately funded construction Project between two countries
51.5 Km long double rail tunnel.
Project was initially estimated at 5.5 Billion dollars on completion the cost increased
to 14.9 Billion dollars
French and
British Govts.,
Chunnel Tunnel Group/French
Manche (BOT basis)
Transmanche Link
(TML) (Construction)
Scope Management
Rating :
2
Inception
2
• Lack of defined
scope
• Scope defined in
Lump sum basis
• Difficulty in
Resource
planning
• Formation of
IGC
2
2
Development
Implementation
• Enormous scope
• Measures to
prevent the
scope creep was
not put in place
• Project
Planning, cost
estimation,
Funding was
affected due to
scope change
• IGC had major
control over
scope
• Frequent
change in scope
• Door and A/c
System
contributed to
major scope
changes
2
Closeout
• Even when the
tunnel was
deemed to
complete, there
were
discrepancies
over scope of
some works.
Time Management
Rating :
3
Inception
3
• Hasty Bidding
and concept
development
• Not enough time
provided to
complete
detailed design
studies
Development
• Change in 3
requirement by
IGC caused delay
• Approval of
drawings
mandated from
both
governments
• Very good
tracking with
hefty status
report
2
Implementation
• Faster Tunneling
• Rail and car
systems were
delivered late
• Alteration of
passenger door
sizes caused
delay for 9
months.
Closeout
2
• Cascading effects
of previous
phases
• 19 month delay
• Project
management
team could not
be held
responsible
Cost Management
Rating :
2
2
Inception
1
• Estimated cost
of USD 5.5 bn.
• Initial Cost
Estimates were
not detailed
out.
• Financing
arranged via
equity and
capital market
Development
Implementation
• USD 2.25 Bn
claim against
Eutotunnel by
contractor was
not anticipated
• Use of
sophesticted
equipment not
anticipated
• Unnecessary
use of costly
technologies in
some cases like
grouting.
• Wrong
selection of
TBM.
2
Closeout 1
• Efforts were
driven towards
settlemnt of
claims rather
than analysing
on sources of
cost overrun.
Quality Management
Rating :
5
5
Inception
Development
4
• Difference in
standards ->
Higher
standard
• Latest laser
and computer
technology
proposed to
bore the
tunnel.
Implementation
Closeout
5
• Good PAC was
framed.
• No margin for
errors
• Formation of
IGC
• Stringent
requirements
from IGC
• Very high
accuracy
maintained.
• Quality
parameters
achieved
were above
industry
average.
5
Human Resources Management
Rating :
3
3
Inception 3
• Team work
envisaged
• Good structure
with proper
responsibilities
formed.
Development
• Every British
team member
had French
counter part
2
Implementation
3
• Managed
15,000 workers
in good
manner
• Workers from
different
cultures were
engaged with
high level of
efficiency
Closeout
• Most of the
persons were
demotivated
due to non
settlement of
claims.
• Win-win
situation was
lost
Communications Management
Rating :
2
Inception
• Difference in
languages of
two countries
3
Development
3
• Limited
communication
between two
teams since
both of them
were trying to
meet in
middle.
• This lead to
difference of
opinion at later
stages
2
Implementation
• Delay in
communication
regarding
specification
change.
Closeout
1
• Negotiations
not proper at
Closeout since
bankers did not
settle for
claims.
Risk Management
Rating :
2
2
Inception
• Technical risk only
considered
• Process and
approval risk were
not envisaged
• Both governments
denied to provide
financial
guarantee.
• Social cost benefit
analysis not done.
2
Development
• Over management
of risk – advanced
techniques
considered
• Contingencies and
margins were
barest mimimum.
• Contractors forced
to consider best
situation.
• Risk assessment
plan was not
made.
Implementation
• Fast tracking of
design and
construction
processes done
without risk
analysis.
• New unproven
technology
increased risk
• Banks were
involved for
minimising the
risk, however IGC
was controlling.
Closeout
2
• Courts ruled in
favour of
contractor.
2
Procurement Management
Rating :
2
2
Inception 2
• Rigorous time
constraints
caused hasty
procurement
plan/contracts.
• Procurement of
rolling stock and
associated major
equipment
finalised on cost
plus percentage
fee basis
Development
Implementation
• Procurement
delayed since
scope/
specification was
changing.
• Fixed price
contracts with
several
contractors
• Differences in
goals since many
contractors were
having equity.
3
Closeout
2
• Cascading effect
of
implementation
created 17
months delay.
• Non settlement
of extra claims
Integration Management
Rating :
3
Inception
2
• Various
international
agencies took part
for
conceptualisation.
• Mistrust among
agencies since
both govts didn’t
provide guarantee
but placed
requirements.
3
Development
Implementation
3
• 46 contractors
were deployed for
design
• 7 Lakh
shareholders, 220
Lending banks
were involved for
financing.
• Huge resources,
huge scope of
work were
managed in best
of industry
standards.
• Logistical and
communication
challenges.
Close out
2
• Teams not
integrated due to
poor
communication.
• Each party tried to
focus on their own
interests.
• International
chamber of
commerce
engaged for
dispute resolution
Rating Scale - Summary
Project
Management Area
Inception
Phase
Developme
nt Phase
Implementa Closeout
tion Phase
Phase
Average
Scope Mgt
2
2
2
2
2
Time Mgt
3
3
2
2
3
Cost Mgt
1
2
2
1
2
Quality Mgt
4
5
5
5
5
HRM
3
3
3
2
3
Communications
Mgt
3
3
2
1
2
Risk Mgt
2
2
2
2
2
Procurement Mgt
2
2
3
2
2
Integration Mgt
2
3
3
2
3
Rating Scale : 5-Excellent, 4- Very Good, 3- Good, 2- Poor, 1- Very Poor
Key Dates
Year
Key Developments
1802
Albert Mathieu put forward a cross channel proposal
1875
Channel Tunnel Company Ltd began preliminary trials
1882
Experimental work on both sides of the Channel started but soon idea was
abandoned citing national defense security.
1975
A UK–France government backed scheme that started in 1974 was cancelled
1984
British & French govt. agreed to common safety, environmental & security
concern, prior opening up the project to bidder
1985
British & French govt. asked for proposals.
1986
Project awarded to Eurotunnel on BOOT basis with 55 year concession
period with initial cost of US$ 5.5 billion.
June 1988
In France, first tunneling was started
December
1988
Tunneling operation was started in UK
May 1994
Tunnel was formally inaugurated & started functioning. Project was
completed with cost & time over run.
Major Area of Strength Managing this Project
QUALITY
MANAGEMENT
TEAM WORK
SAFETY
MANAGEMENT
• Quality management was implemented successfully.
• Technical expertise .
• Excellent team work between two groups.
• Construction of tunnel completed 3 months ahead of schedule.
• Project office support was excellent.
• Accidents below industry average.
• 15000 workmen, numerous engineers, handled precisely.
Major Opportunities for improvement from Management P.O.V
SCOPE
MANAGEMENT
CONTRACT
MANAGEMENT
COMMUNICATION
MANAGEMENT
• Detailed Functional requirement & Technical specification
• Consideration of Scope contingency
• Applicability of Single Contract to both group.
• Coverage of risk exposures
• Communication protocol preparation
• Protocol for escalating unresolved / pending issue
• Tracking & monitoring
Major Opportunities for improvement from Management P.O.V (cont.)
• Project process & approval risk was overlooked.
• Not prepared to handle the degree of IGC supervision & change
management controls.
RISK
• Contingencies for known & unknown risk & a strategy for handling
MANAGEMENT
change management missing.
• Use a standardized change-control management to eliminate cost
considerations issues imposed by out-of-control-change management
control processes.
• Specification and validation of functional and technical requirements at
COST
front.
MANAGEMENT
• Replacement of material, equipment with alternate option of same
specification.
• Project Stakeholder management plan was not prepared in detailed and
also not followed throughout project life cycle. By implementing this,
STAKEHOLDER
variance in cost, schedule and extra claims could have been minimized.
MANAGEMENT
Major Project Management Lessons learned
Review past engineering studies & take
them in consideration
Technical as well functional aspects of
project management should be given
equal importance
Detailed risk analysis required in
inception stage & needs to be tracked,
monitored during PLC of project
Major Project Management Lessons learned
Maintaining communication throughout the
life of project yields better operational
project results.
In large international construction projects of
the involving countries, Govt. support &
communication channels should be roped in.
Whole hearted effort to be made right from
the inception of project in order to avoid
adverse situation at the end
Conclusion:
• Time Over run – 19 months delay
• Cost Over run – USD 9.4 Bn
• Trail of unhappy investors and stakeholders
• Key learnings
• Modern Engineering Marvel
• Undoubted Public benefit