Channel Tunnel Construction: Project Management

Channel tunnel Construction fancy ManagementThe Channel Tunnel is considered to be the largest secret sector infrastructure forcing out of the twentieth century. It is a fixed link tape drive governing body comprising twin rail turn overs with an additional service tunnel each 50.5 kilometres in length. These run below the English Channel 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 political framework for the dispatch. This addressed issues such(prenominal) as jurisdiction, national boundaries and governmental involvement, consequently formation the role of the Intergovernmental Commission (IGC) and Safety Authority. In the same year, the Concession Agreement was awarded to Eurotunnel (ET), a bi-national company formed by the Channel Tunnel Group (UK) and France Manche S.A. (France) for 65 years. Eurotunnel subsequently became owner and operat or of the hurtle and awarded the face contract to Transmanche Link (TML) for the tunnels design, construction, testing and commissioning. ET as well as became linked to the banks via a loan agreement and to national railways via a usage agreement.The scope of the project entailed the knowledge of a ashes to prevail the transfer of regular traffic through airport-sized terminals onto an entirely new rail sy al-Qaida with minimum transit time and shuttles locomotion at high speeds with high capacity in a confined tunnel environment. This therefore defined the technology to be used, since a high consolidation was required between works and specific transport equipment, an unprecedented rolling stock which include the heaviest traffic on rails, and the largest real-time data system ever employed to manage shuttles travelling at high speeds.Project Roles and ResponsibilitiesProject SponsorAs the project was privately funded, the sponsor had to raise finance on an unprecedented sc ale through 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 necessary to accommodate for the previously unconsidered needs of the IGC and for pencil eraser and environmental concerns as well as the approval of changes do to the project plan by the manager to address the commissions concerns and the degree of fast-tracking between the several phases of the projects. Contractual issues had to be resolved during the course of the project, with a rewrite agreement to that made with TML in 1987 being drawn up. As installation of equipment progressed, the concern shifted to the training of personnel for the operation of the transport system. Maintaining talk between both sides of the tunnel was also crucial in achieving project success.Project ManagerThe project managers principal responsibility was to plan and organise the project effectivel y to meet the sponsors design and construction specifications while adhering to speak to and time constraints. During the construction phase, the project manager had to appoint sub-contractors for various stages of the project, with fixed-price contracts issued to reduce costs. Other duties included the modification of the project plan to accommodate for changes in the original 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 50kmDec 1986 Geotechnical study of Shakespeare Cliff carried out. Cross channel surveys highly-developed for the 1974-1975 tunnel project were refined using the latest satellite observationsNov. 1987 Funds arranged totalling 5 billionOct 1990 Eurotunnel Signs agreement for 1 .8 billion additional bank book of facts facilitiesJune 1992 The installation of complex signalling, control and communication system begins.Nov 1993 Commissioning Program BeginsAugust 1987 Construction work begins on both UK (Shakespeare Cliff) and French (Sangatte) sides of the channel attend 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 reliable transportation service that linked the United Kingdom to France via the English Channel. ET suggested that that two 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 voyage time of three hours between London and Paris.The project was initially scheduled for opening on the 1 5 May, 1993. This meant that the time taken between design servant and completion of the project was set at seven years. Since Eurotunnel could not start earning revenues until the tunnel became operational, schedule overruns were linked directly to loss of revenue, and were considered a more change consequence than direct cost increases. Based on the conceptual design, the budget was estimated at 5 billion.It can therefore be observed that the quality of the system was of greatest importance in this project. A compromise was necessary between the desired 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 respect to time.Project StrategyThe scale of design was massive and consequently broken into several smaller projects that ran simultaneously to achieve th e overall objectives.Realistic time estimates for the project were obtained from luxuriant schedule planning during the inception phase of the project. This included activity definition, activity sequencing, and activity duration to develop a baseline project schedule. During the course of the project, monitor and re-evaluation of the time estimates were performed by the implementation of a hierarchical planning/control system. This allowed overall strategic planning, proper reporting to precaution and expound logging of day-after-day activities using a computerized reporting 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 aid or loan guarantees. Hence, financing was obtained through equity and loan capital markets.The Intergovernmental Commission (IGC) was put into place to ensure the quality objectives were achieved. This included imple mentation 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 two 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, facted design was incomplete and hence, fixed prices were not available. Based on the estimated costs, the contract had three facetsLump sum works for the construction of terminals and installation of mechanical and electric 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 will 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 graphic symbol and StyleET comprised mainly of banks and contractors. Throughout the project, ET was largely criticised for its approach to design and management. This resulted in failure 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 board 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 effort 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 highly public battles between the company managing the project, ET, and its contractors, TML.One of the factors responsible for the cost overruns stem from the short time allocated for bidders to place their proposal for the project in the inception phase. Due to time constraints only a conceptual design was presented and pr iced. 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 cc million to accommodate this new design aspect. Later on, this lead to disputes between ET and TML about who was responsible for these cost overruns.Another important factor to consider was the miserable 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 approximately 15,000 persons included the politicians, governmental workers, bankers, lawyers and analysts who were responsible for obtaining an approved proposal pla n and financing, and the construction workers, machinists and engineers who were responsible for the actual implementation of the project. With a task cast 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 printing interfered strongly and permanently in this project that was constantly under media scrutiny.The Channel Tunnel was able to withstand all these delays and cost overruns principa lly because of its highly chesty future income stream.