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

2 2
2
Inception Development Implementation Closeout
2
• Lack of defined • Enormous scope • IGC had major • Even when the
scope • Measures to control over tunnel was
• Scope defined in prevent the scope deemed to
Lump sum basis scope creep was • Frequent complete, there
• Difficulty in not put in place change in scope were
Resource • Project • Door and A/c discrepancies
planning Planning, cost System over scope of
estimation, contributed to some works.
• Formation of
IGC Funding was major scope
affected due to changes
scope change
 Time Management
Rating :
3

Inception 3 Development 2
Implementation Closeout
• Hasty Bidding • Change in 3 • Faster Tunneling 2
• Cascading effects
and concept requirement by • Rail and car of previous
development IGC caused delay systems were phases
• Not enough time • Approval of delivered late • 19 month delay
provided to drawings • Alteration of • Project
complete mandated from passenger door management
detailed design both sizes caused team could not
studies governments delay for 9 be held
• Very good months. responsible
tracking with
hefty status
report
 Cost Management
Rating :
2

2
Inception Development Implementation Closeout 1
1
• Estimated cost 2
• USD 2.25 Bn • Unnecessary • Efforts were
of USD 5.5 bn. claim against use of costly driven towards
• Initial Cost Eutotunnel by technologies in settlemnt of
Estimates were contractor was some cases like claims rather
not detailed not anticipated grouting. than analysing
out. • Use of • Wrong on sources of
• Financing sophesticted selection of cost overrun.
arranged via equipment not TBM.
equity and anticipated
capital market
 Quality Management
Rating :
5

5
5
Inception Development Implementation Closeout
4 5
• Difference in • Good PAC was • Stringent • Quality
standards -> framed. requirements parameters
Higher • No margin for from IGC achieved
standard errors • Very high were above
• Latest laser • Formation of accuracy industry
and computer IGC maintained. average.
technology
proposed to
bore the
tunnel.
 Human Resources Management
Rating :
3

3 2
Inception 3 Development Implementation Closeout
3
• Team work • Every British • Managed • Most of the
envisaged team member 15,000 workers persons were
• Good structure had French in good demotivated
with proper counter part manner due to non
responsibilities • Workers from settlement of
formed. different claims.
cultures were • Win-win
engaged with situation was
high level of lost
efficiency
 Communications Management
Rating :
2

Inception 3 Development 2
Implementation Closeout
3 1
• Difference in • Limited • Delay in • Negotiations
languages of communication communication not proper at
two countries between two regarding Closeout since
teams since specification bankers did not
both of them change. settle for
were trying to claims.
meet in
middle.
• This lead to
difference of
opinion at later
stages
 Risk Management
Rating :
2

2
Inception Development Implementation Closeout
2 2
2
• Technical risk only • Over management • Fast tracking of • Courts ruled in
considered of risk – advanced design and favour of
• Process and techniques construction contractor.
approval risk were considered processes done
not envisaged • Contingencies and without risk
• Both governments margins were analysis.
denied to provide barest mimimum. • New unproven
financial • Contractors forced technology
guarantee. to consider best increased risk
• Social cost benefit situation. • Banks were
analysis not done. • Risk assessment involved for
plan was not minimising the
made. risk, however IGC
was controlling.
 Procurement Management
Rating :
2

2
2
Inception 2 Development Implementation Closeout
3
• Rigorous time • Procurement • Fixed price • Cascading effect
constraints delayed since contracts with of
caused hasty scope/ several implementation
procurement specification was contractors created 17
plan/contracts. changing. • Differences in months delay.
• Procurement of goals since many • Non settlement
rolling stock and contractors were of extra claims
associated major having equity.
equipment
finalised on cost
plus percentage
fee basis
 Integration Management
Rating :
3

2 3
Inception Development Implementation Close out
3 2
• Various • 46 contractors • Huge resources, • Teams not
international were deployed for huge scope of integrated due to
agencies took part design work were poor
for • 7 Lakh managed in best communication.
conceptualisation. shareholders, 220 of industry • Each party tried to
• Mistrust among Lending banks standards. focus on their own
agencies since were involved for • Logistical and interests.
both govts didn’t financing. communication • International
provide guarantee challenges. chamber of
but placed commerce
requirements. engaged for
dispute resolution
 Rating Scale - Summary
Project Inception Developme Implementa Closeout Average
Management Area Phase nt Phase tion Phase Phase

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
3 3 2 1 2
Mgt
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
Experimental work on both sides of the Channel started but soon idea was
1882
abandoned citing national defense security.

1975 A UK–France government backed scheme that started in 1974 was cancelled

British & French govt. agreed to common safety, environmental & security
1984
concern, prior opening up the project to bidder
1985 British & French govt. asked for proposals.
Project awarded to Eurotunnel on BOOT basis with 55 year concession
1986
period with initial cost of US$ 5.5 billion.
June 1988 In France, first tunneling was started
December
Tunneling operation was started in UK
1988
Tunnel was formally inaugurated & started functioning. Project was
May 1994
completed with cost & time over run.
 Major Area of Strength Managing this Project

• Quality management was implemented successfully.

QUALITY • Technical expertise .
MANAGEMENT

• Excellent team work between two groups.

• Construction of tunnel completed 3 months ahead of schedule.
TEAM WORK • Project office support was excellent.

• Accidents below industry average.

SAFETY • 15000 workmen, numerous engineers, handled precisely.
MANAGEMENT
Major Opportunities for improvement from Management P.O.V

• Detailed Functional requirement & Technical specification

SCOPE
• Consideration of Scope contingency
MANAGEMENT

• Applicability of Single Contract to both group.

CONTRACT
• Coverage of risk exposures
MANAGEMENT

• Communication protocol preparation

• Protocol for escalating unresolved / pending issue
COMMUNICATION
• Tracking & monitoring
MANAGEMENT
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