Chunnel Project

Topics: Project management, Cost overrun, Cost Pages: 11 (3478 words) Published: April 8, 2011
Running head: Case Study 3: The Chunnel Project

Case Study 3: The Chunnel Project

University of Maryland University College
Project Procurement Management, Semester Fall 09, Section 9041 Professor Michael C. Hagerman

November 08, 2009

The Inception Stage
Rating Scale: 5—Excellent, 4—Very Good, 3—Good, 2—Poor, 1—Very Poor Project Management Area| Development Phase|
Scope Management| 2|
Time Management| 4|
Cost Management| 2|
Quality Management| 3|
Human Resource Management| 5|
Communication Management| 2|
Risk Management| 3|
Procurement Management| 3|
Integration Management| 3|

Procurement Management Rating Rationale
During the inception phase, the project was marred with project scope challenges. A project that was thought to be profitable turned out to be a large economic feat with large scope changes. Estimates to complete the project initially cost US $5.5 billion. Challenges with initial estimates came about as a result of insufficient time to adequately plan project or cost estimates. This resulted in project cost increase to US$14.9 billion. Eurotunnel entered into a construction contract with Transmanche Link (TML) that included a cost-plus-fixed-fee basis for tunneling, a lump sum for terminals, mechanical and electrical work, and a cost-plus-percentage-fee basis for rolling stock and major equipment. The complex planning process and time constraints of this large privately funded construction project led to errors in resources and risk allocation. These contractual errors increased the cost by an additional US$2.25 billion. Even though the project members reviewed the initial risks for the tunnel, technical risks were accounted for but the team neglected to give the same in-depth review to the approval processes. Quality suffered due to the differences in each countries specification as was observed with the passenger doors not having the same width of the railway. These issues were resolved but not in a timely manner by the Intergovernmental Commission (IGC). Since these quality issues were not discussed upfront during the planning phase, this resulted in another increase to cost from US$9 million to over US$70 million. Communication between IGC and TML was effective during contract negotiations involving financing and technical aspects, but there was communication breakdown with change orders and other issues were not solved in a timely manner. Teamwork was effective in spite of the cultural differences and the number of people involved in the project. Amazingly, the project was completed three months early, in 3 ½ years, with over 15,000 multinational workers. Project Area strengths

Human resource Management: During the inception phase, teamwork was exceptional even though there were over 15,000 multi-national workers involved in this project. Stakeholders worked well together to get an approved project plan implemented. Additionally, the tunnel workers were able to efficiently work together to get the 32 mile tunnel completed within a 3 ½ year time frame. Time Management: Time management was above par resulting in the project being completed earlier than planned. The diverse cultures working together on the project did not have a negative impact on time management. Despite the enormous obstacles in the scope from the faulty planning of the schedule, variance was minimally affected. Even though this had an effect on scheduling, the project was completed three months earlier than planned.

Project Management Area Opportunities
Scope: During the planning process, the scope of the project should be defined. It should include the project objectives, deliverables, and requirements. Priorities need to be established so that a strong work breakdown structure (WBS) can be adhered to throughout the project life cycle. According to Gray& Larson (2006) the WBS defines communication channels and assists in understanding and...

References: Anbari, F. T., Giammalvo, P., Jaffe, P., Latavec, C. Rizwan, M., (n.d.). The Chunnel Project.
Project Management Institute: Case studies in project management.
Chen, Y., & Frame, J. D. (2006). Principles of contracting for project management (2nd ed.). UMT Press
Fleming, Q.W. (2003). Project procurement management: Contracting, subcontracting, teaming. Tustin, CA: FMC.
Floyd, L. (2004). Application of Appropriate Project Controls Tools for Contract Type.
Cost Engineering, 46 (2)25-30, Retrieved October 24, 2009, from
Gray, F. C., Larson, W.E.,(2008). Project Management: The Managerial Process. (3rd ed.). New York, NY: McGraw-Hill Inc
Kerzner, H, (2003). Project management: A systems approach to planning, scheduling and controlling (8th ED). New York, NY: John Wiley & Sons.
Project Management Institute (2008). A Guide to the project management body of knowledge (PMBOK Guide) (4th ed.). Newtown Square, PA: PMI.
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