Channel Tunnel Construction: Project Management

fetch cut into Construction regurgitate forethoughtThe furrow Tunnel is considered to be the largest private sector infra social organization assure of the twentieth century. It is a fixed link tape driveation outline comprising twin civilise digs with an supernumerary service tunnel each 50.5 kilometres in length. These run below the side of meat telephone circuit connecting England and France. The terminals can be found in Folkstone in the UK and Coquelles, near Calais in France.In 1986, a treaty of Canterbury was signed establishing the policy-making framework for the confound. This intercommunicate issues much(prenominal) as jurisdiction, national boundaries and political involvement, whence defining the role of the Intergovernmental Commission (IGC) and Safety Authority. In the same year, the assignment Agreement was awarded to Eurotunnel (ET), a bi-national company formed by the bestow Tunnel Group (UK) and France Manche S.A. (France) for 65 years. Eurotu nnel subsequently became owner and operator of the advise and awarded the expression contract to Transmanche Link (TML) for the tunnels shape, body structure, testing and commissioning. ET alike became relate to the banks via a give agreement and to national railways via a usage agreement.The scope of the witness entailed the outgrowth of a system to accommodate the transfer of regular traffic with airport-sized terminals onto an entirely new rail system with minimum transit date and shuttles travelling at high speeds with high capacity in a confined tunnel environment. This therefore defined the technology to be used, since a high integration was required amongst works and specific transport equipment, an unprecedented rolling stock which include the heaviest traffic on rails, and the largest real metre data system ever employed to manage shuttles travelling at high speeds.Project Roles and ResponsibilitiesProject SponsorAs the pop was in private funded, the sponsor h ad to raise finance on an unprecedented scale finished bank loans and equity while making shares available to the public. The loan was secured through a consortium of 203 banks worldwide. An increase in finance during the course of the project was obligatory to accommodate for the previously unconsidered needs of the IGC and for safety and environmental concerns as well as the benediction of changes do to the project intent by the manager to address the commissions concerns and the degree of fast-tracking between the several phases of the projects. contr tangible issues had to be resolved during the course of the project, with a revised agreement to that made with TML in 1987 being drawn up. As introduction of equipment progressed, the concern shifted to the information of personnel for the operation of the transport system. Maintaining communication between both sides of the tunnel was in like manner crucial in achieving project success.Project ManagerThe project managers principal responsibility was to plan and organise the project effectively to light upon the sponsors devise and social system specifications while adhering to monetary value and meter constraints. During the building phase, the project manager had to appoint sub- asseverators for various stages of the project, with fixed-price contracts issued to reduce be. Other duties included the exclusivelyowance of the project plan to accommodate for changes in the overlord design necessitated by pressures from the Intergovernmental Commission and accounting for safety and environmental concerns. The project manager also had to ensure that there was effective communication between the French and the English sides of the tunnel construction.Project TimelineCommissioningJan 1990 total tunnel bored reached 50km dec 1986 Geotechnical study of Shakespeare Cliff carried out. Cross channel surveys developed for the 1974-1975 tunnel project were refined using the latest satellite observatio nsNov. 1987 Funds arranged totalling 5 billionOct 1990 Eurotunnel Signs agreement for 1.8 billion additional bank credit facilitiesJune 1992 The installation of complex signalling, control and communication system begins.Nov 1993 Commissioning Program Begins swaggering 1987 Construction work begins on both UK (Shakespeare Cliff) and French (Sangatte) sides of the channel habitus 1 Fast-track programme for Channel Tunnel Event dates obtained from Wilson Spark (1994)Original Project ObjectivesThe fundamental objective of the tunnel was to offer a comfortable, fast, frequent and genuine transportation service that linked the United Kingdom to France via the English Channel. ET suggested that that ii rail tunnels and a service tunnel be constructed. The service tunnel was to be fitted with safety and electronic equipment of the highest standard while the rail tunnels were to be designed to accommodate shuttle speeds between 100 to 160 km/h with an average journey magazine of thr ee hours between not bad(p) of the United Kingdom and Paris.The project was initially scheduled for opening on the 15 May, 1993. This meant that the eon taken between design consideration and completion of the project was decide at seven years. Since Eurotunnel could not start earning revenues until the tunnel became operational, schedule overruns were linked rulely to loss of revenue, and were considered a more damaging consequence than direct cost increases. found on the conceptual design, the budget was estimated at 5 billion.It can therefore be observed that the case of the system was of greatest importance in this project. A compromise was necessary between the coveted quality and the time taken to achieve this quality, since as the time increased, so did the costs (in the form of lost revenue). figure 2 indicates the time-cost-quality relationship for the Channel Tunnel project. The red dot represents the relative importance of quality with celebrate to time.Project S trategyThe scale of design was massive and consequently overturned into several smaller projects that ran simultaneously to achieve the overall objectives.Realistic time estimates for the project were obtained from detailed schedule planning during the inception phase of the project. This included activity definition, activity sequencing, and activity duration to develop a service line project schedule. During the course of the project, monitoring and re-evaluation of the time estimates were performed by the performance of a hierarchical planning/control system. This allowed overall strategic planning, proper account to management and detailed logging of day-to-day activities using a computerized reportage system to monitor the progress on all aspects of the project.According to the Channel Tunnel Treaty, Eurotunnel had to obtain funding for the project from private sources, without government assistant or loan guarantees. Hence, financing was obtained through equity and loan ca pital markets.The Intergovernmental Commission (IGC) was put into place to ensure the quality objectives were achieved. This included implementation of a Safety Authority which was responsible for monitoring and specifying design procedures, specifications, construction and issues related to the environment, operation and safety. Since the project was bi-national in nature, the IGC mandated that if there were differences in the standards of the dickens countries, the higher of the two should prevail. The Quality Management plan included quality planning, quality assurance and quality control.Contracts played an essential role in defining the scope of work, cost, timeline and rules of engagement (or penalties).Contract StrategyDuring the conceptual design phase, Eurotunnel contracted TML for the construction of the tunnel. The contract agreements were based on estimated costs since at this stage of the project, detailed design was incomplete and hence, fixed prices were not availabl e. Based on the estimated costs, the contract had three facetsLump sum works for the construction of terminals and installation of mechanical and electrical equipment in both tunnels and terminals.Target works, for all tunnelling and related equipment such as the tunnel boring machines. The arrangement was that if the actual cost was less than the target cost at completion, the contractor forget receive 50% of the savings, while if the actual cost exceeded the target cost, the contractor was required to pay 30% of the excess, up to a maximum of 6% of the target cost.Procurement items for the rolling stock and its associated equipment on a cost reimbursement basis with a procurement fee.Project Manager Type and airET comprised mainly of banks and contractors. Throughout the project, ET was largely criticised for its approach to design and management. This resulted in trouble to deliver the project according to the sponsors time, cost and quality objectives. Additionally, since ETs organisation was bi-national, a sole project manager could not be place.Organisational StructureEurotunnels organisational structure can be described as functional, but its two maturate system made it unique. This is depicted in Figure 3 below.Figure 3 Eurotunnel Management Structure Joint-Board System (adapted from Stannard (1990))/In retrospect with the original project objectives, the Tunnel was not opened until 6 May 1994 at a cost of approximately 12 billion. Additionally, original specifications for the rail system and tunnel quality were revised in order to keep costs down.Many reports have analysed the Channel Tunnel project in an move to determine what went wrong in such a massive construction venture. From its inception, it was plagued by financial and technical woes, blown schedules and super public battles between the company managing the project, ET, and its contractors, TML.One of the chemical elements responsible for the cost overruns stem from the short time al located for bidders to place their proposal for the project in the inception phase. Due to time constraints only a conceptual design was presented and priced. All detail design was to be completed during the construction phase after the bid was won (an example of fast-tracking in the program). Consequently, a number of design problems were not identified from the onset of the project and no provisions were made for them in ETs initial cost estimates. A typical example of this was the need for air-conditioning in the tunnel, and therefore, an additional 200 million to accommodate this new design aspect. Later on, this subscribe to to disputes between ET and TML about who was responsible for these cost overruns.Another important factor to consider was the poor communication between the British and French teams, in addition to ET and TML. Project communications was an important aspect in project planning, especially for a project of this magnitude. The multi-national team of approxima tely 15,000 persons included the politicians, governmental workers, bankers, lawyers and analysts who were responsible for obtaining an approved proposal plan and financing, and the construction workers, machinists and engineers who were responsible for the actual implementation of the project. With a task force of this size, an executional communication plan was necessary to address horizontal and vertical communication channels.An analysis of the Risk Management revealed that focus was on engineering risk as compared to process and approval risk, such as IGC safety decisions and approval, while the business risk was addressed via contractual agreements.During the project life, several key members of the ET team resigned and TMLs management also underwent significant change. Strategies were adjusted given the depreciating status of the project. Organisations involved such as the banks, Safety Authority, environmental issues, local authority and public sagaciousness interfered stro ngly and permanently in this project that was constantly under media scrutiny.The Channel Tunnel was able to withstand all these delays and cost overruns principally because of its highly robust future income stream.