Table of Contents

1. Long Term Benefits..................................................................................................................1

2. Challenges................................................................................................................................2
3. Gaps..........................................................................................................................................3
4. Suggestions...............................................................................................................................5

1. Long Term Benefits

• The Channel Tunnel facilitates trade worth £91.4bn per year, representing a quarter of all
UK trade in goods with the European Union

• It has changed the way transport and logistics operate across the continent. Since opening
in 1994, the world of manufacturing has been transformed: continent wide logistics,
integrated supply chains, components moving across several borders, products sold
across member states without tariffs.

• The Channel Tunnel project has driven transport infrastructure improvements of the road
and rail networks in France and the UK that connect to, and are associated with, the
tunnel. Of all designs proposed, Eurotunnel also offered the least environmental
disruption, due to the tunnel being dug 40 m under the seabed, as well as less health risks
from pollution (compared to an automobile ‘drive-through’ tunnel, initially preferred by
the UK Government); lower vulnerability to environmental disasters; and better
protection against the risk of terrorism.

• With just-in-time and just-in-sequence production being the norm, food and drink is
delivered fresh any time of the day or night to meet consumer needs. Express deliveries
are available for on-line shoppers within 24 hours; medical treatments can be prepared
one side and delivered on the other the same day; tourists and business people benefit
from fast and frequent travel options.

• A journey from London to Paris emits 90% less greenhouse gas emissions than the
equivalent short--haul flight, according to Eurostar.
• It finds that 30% of UK exports (£43.6bn) to the EU and 22% of imports (£47.8bn) from
the EU depend on the speed ease and reliability of the Channel Tunnel, with exports
through the Tunnel alone supporting 220,000 jobs in the UK.

• The Tunnel also transports 21 million passengers a year via Eurotunnel’s Le Shuttle
service and Eurostar trains.

• This facilitates inbound tourism via the Tunnel worth £1.7bn to the economy, supporting
a further 45,000 jobs in the UK and 840,000 business trips which keep the UK’s services
sector competitive.

• The UK’s trading relationship with European countries continues to develop, regardless
of Brexit. This means that the Channel Tunnel remains vital to the UK, to connect it with
Europe and beyond and it will continue to form a key part of the UK’s transport
infrastructure. One of the most striking aspects of this report by Ernst and Young is the
geographical range of companies who rely on the Tunnel to do business. The Tunnel not
only serves companies in London and the South East but right the way through the
Midlands, the North of England and beyond.”

2. Challenges
• During the development phase, the scope was not fully assessed and the proper
precautions to prevent scope creep were not put in place.

• This project involved 7 lakh shareholders, 220 International banks, construction

companies and suppliers causing significant logistical and communication challenges.

• The interdependency of these stakeholders made it difficult to address issues to

everyone's satisfaction.

• One of the challenges is that decision-making was somewhat fragmented.

• Fast tracking the process of overlapping design and construction under pressure of
bankers and investors made it riskier.
 • It was the misjudgment of HR department to hire 15 thousand workers on the project.
Below the ground thousands of construction workers, machinist and engineers were
involved in boring 3 tunnels for 32 miles from both borders across the Chunnel.

• Absence of historical records: In Eurotunnel project the absence of similar precedents in

the construction avoided provide the project with historical records. This absence of
historical records led in some requirement gaps. To improve safety there was need for air
conditioning system that was not included the initial design.

• The banks were also given too much control resulting in immediate improvement, but
created complications in the Chunnel Project later.

3. Gaps
Communication between the French and English sides of this project was limited. Putting the
two teams on opposite ends and working toward the middle delayed communication until near
the end of the project. Each side worked toward a common goal, and did not feel the need to
communicate because the assumption was that they were both working toward meeting in the
middle. Lack of communication during the development and design of this project in its early
stages led to differences of opinion in its later stages.

In fact, changes in scope due to requirement omissions or changes can be viewed in many ways
depending on how it impacts cost, time, quality, and potential risk. It is here where the
communication seemed to breakdown, as issues were not resolved in a timely manner, resulting
in significant cost and time variances, very little was mentioned in the way of formal project
office activities. As an example of quality impacts relates to the delay in communicating the
requirement that passenger doors be widened from 600 mm to 700 mm. This was a safety
concern with IGC. when IGC did not provide timely approval for this change, TML's
manufacturing costs increased from uS$9 million to US$70 million' with a nine-month delay.

The mistake of allowing IGC to have scope control without the ability of IGC to approve
additional funding for scope creep affected the management of this project so that success
became extremely difficult. In the case of the Chunnel, the "health and safety" commission
(known as the IGC) had broad authority to demand changes, but had no means to provide
additional funding to implement the changes. This, combined with very slow decision-making,
led to situations where significant budget overrun occurred not due to bad estimating or
controlling, but rather due to out-of-control change management processes.

The IGC mandated that whenever a difference occurred in standards between the two countries,
the higher of the two standards be kept. Theoretically this made sense, but when it came to the
fine details of the project, it helped create schedule delays.

IGC was the authority on construction criteria, but lack of awareness that someone would pay for
the modification was huge obstacles. TML used seismic design criteria but in the middle of
designing increase by a factor of four. TML consortium had monopolistic power so no
motivation to perform well after receiving the tender.

Risk management: At the beginning of the drilling tasks in the Eurotunnel the drill team found an
unexpected hardness of the underground that let delays in the tunneling. Even there were some
underground extraction and analysis before start the construction, these was and expected risk
without response plan.

Communications problems: Communication between the French and English sides of this project
was limited. Putting the two teams on opposite ends and working toward the middle delayed
communication until near the end of the project. Each side worked toward a common goal, and
did not feel the need to communicate because the assumption was that they were both working
toward meeting in the middle. Lack of communication during the development and design of this
project in its early stages led to differences of opinion in its later stages.

Procurement problems: In Eurotunnel project there were many vendors bidding for the contract.
This background led the ‘winner’s curse’ of the successful bidders having the lowest and most
optimistic price estimates, against the most realistic estimates. Thus, certain assumption efforts
may have been made regarding the ability to have enough resources to complete the contract and,
in the case of a fixed-price contract, not enough was understood to limit the impact of known and
unknown risks. In this case, contractual errors were made in the estimates and risk allocation
method, leading to additional contract claims of US$2.25 billion.
Due to French fears about being unable to grout on their side, much more sophisticated and
advanced equipment was used. Later on, it was found that equipment as old as 1974 could have
been used just as effectively. This is another example of over managing risk.

It did take data from past projects, but perhaps not the lessons learned when planning the
Chunnel project.

Fast tracking, the process of overlapping design and construction in the hope of shortening
delivery time is a risky approach under the best of circumstances. However, using this technique
when the technology is new or unproven makes the risk exponentially greater. As the longest
tunnel of its type in the world, the fact that tunneling is the riskiest of all construction (and such a
project had never been attempted previously with available technology), should have alerted the
governments not to use the approach they did.

Teamwork during the development phase was helped by the focus on fairness that was followed
by the two governments involved. For every British team member, the French had a matching
counterpart. However, there was no method of encouraging teamwork during the later phases of
this project. The team could have designed methods by which teamwork across all the phases,
teams, and team members of this project was emphasized. Although the momentum, elation, and
pride created during the signing of the treaty approving this project gave it starling strength,
proper provisions were not put into place to allow that momentum to continue through the life of
the project. The two governments moved further away from the teamwork concept when they
refused to guarantee the project financially. That put an additional burden on the privatized
sector and forced its back to the wall. This caused some level of mistrust because the
governments created the demands for safety and so forth, but the government guaranteed nothing
financially.

4. Suggestions
• Schedule complexity was significant and required logistic planning and must develop the
WBS structure

• Decisions made in the inception phase (contract choice and change control methods)
could have been more carefully assessed for risk impact.
• Quality and specification issues could be seen early on as they relate to railway width,
voltages, and signaling systems.

• Incompatibility issues needed to be included within the initial quality requirements

during the inception phase

• Given the technical challenges related to this project, it can be suggested that quality
management was successful.

• More time and detail must be given to planning and designing phase.

• Technology risk was mitigated by detailed geological studies of the strata.

• Reference class forecasting can be applied.

• As the longest tunnel of its type in the world, the fact that tunneling is the riskiest of all
construction (and such a project had never been attempted previously with available
technology), should have alerted the governments not to use the approach they did.

• The fact that the original consortium (CTG/FM) consisted of construction companies and
bankers whose primary objective was to make money on the construction and not on the
operation. Remembering that this was a 55-year BOT, it may have been better to
structure the consortium so that the construction was done at cost, and the only profit
would come from completing the project at the lowest possible cost, within the
framework of the quality and safety constraints established by the governments of France
and Britain. This model may have stood a better chance of being successful.

• There must be one contract, it must be developed and written in one language, and it must
be based on one legal system. It must all contain clearly defined dispute resolution I9
procedures, procedures with which all parties are familiar and with which all parties have
agreed to abide

• They should have completed the definition and scope of the project before starting to
build The Chunnel to achieve more control and easier reach its financial goals, and to
give a better chance to complete at the scheduled time.