Chunnel Project

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  • Topic: Channel Tunnel, Cost, Cost overrun
  • Pages : 6 (1647 words )
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  • Published : October 9, 2012
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3004ENG PROJECT MANAThGEMENT PRINCIPLES

THE CHUNNEL PROJECT

Project Background

* Objective is to create an underground tunnel connecting England and France * Create a fixed transportation link between England and France in an attempt to spur economic development, improve European trade, and provide an alternative high-speed transportation method. * Requires cooperation between two countries, numerous banks, contractors, etc to initiate, plan, executive and complete the project. * Project was completed but was late and overbudget.

Project Stakeholders

* French and British governments
* 220 International lending banks
* Contractors/construction companies/suppliers
* Regulatory agencies
* Channel Tunnel Group/ FranceManche (EuroTunnel) – winner of proposal, owner of 55 year concession—runs the project * Intergovernment Commission (IGC) – approves designs, safety regulations, etc * Share holders seeking equity interest

* 46 contractors
* Transmanche Link (TML) – awarded construction contract – Translink is the company on the British side, Transmanche is the company on the French side * Politicians, government workers, bankers, lawyers, analysts, construction workers, machinists, engineers * 700 000 share holders

PROJECT LIFE CYCLE
Conception Phase

- Ideas for a tunnel going through the English Channel have been proposed as early as 1802, however, all attempts and proposals were abandoned until 1983. * French and British government ask for proposals for the project in 1983. * Four submissions were shortlisted:

* Eurobridge: a 4.5 km (2.8 mi) span suspension bridge with a roadway in an enclosed tube, * Euroroute: a 21 km (13 mi) tunnel between artificial islands approached by bridges, * Channel Expressway: large diameter road tunnels with mid-channel ventilation towers, * a rail proposal based on the 1975 scheme presented by Channel Tunnel Group/France–Manche (CTG/F–M) * The project is awarded to Channel Tunnel Group/FranceManche (later Eurotunnel) in 1986. * Treaty of Canterbury was signed, allowing project to proceed. * Initial estimated cost is $5.5 billion but eventually increased to $14.9 billion. * Not enough time to complete detailed design studies; lead to increased costs that were not included in the initial scope * Design drafts were approved that were not in the original concession agreement * Cost estimates and financing were not well defined

* Lack of a defined scope made resource planning, cost estimating, and budgeting difficult. * Schedule planning (activity definition, sequencing and duration) and work breakdown structure was quite significant. * Scope of work, cost, timeline, rules of engagement, were complex thus certain assumption errors may have been made. * Resources sufficient to complete the contract and risks were not completely understood which lead to additional claims ($2.25 billion) * Focus was on engineering and technical risk, as opposed to process and approval risks. * Both countries were aware of the financial risk—the project was to be funded by non-governmental sources * Contract choice (fixed-price contract) may have been a poor choice since not enough was understood to limit impact of known and unknown risks * Change control methods were not put into place, leading cost overruns * Quality and specification issues should have been included in initial quality requirements (eg: width of passenger doors). Resulted in delays in getting approval and budgeting. * State of the art technology and equipment used allowed for an engineering marvel of completing the tunnel. Quality planning, assurance and control were successful. * Incomplete requirements, scope changes, risk response strategies were not considered during the conception phase, which resulted in delays and cost overruns. * Communication during planning, negotiations, financing,...
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