The Channel Tunnel Project Management

Topics: Project management, Channel Tunnel, Cost overrun Pages: 15 (4232 words) Published: March 31, 2011


The Channel Tunnel is one of Europe's biggest infrastructure projects ever. The 50.45km long tunnel has fulfilled this old dream by linking Britain and the rest of Europe. The idea of a fixed link between Britain and France was first mooted by a French engineer in 1802; it connects England and France 50m below the seabed of the English Channel. It's not just a tunnel, but a huge infrastructure containing massive machinery and control systems in an underwater tunnel system (Lemley, 1995; Kirkland, 1995). In 1990 the service tunnels broke through at the halfway point. The main rail tunnels met on May 22, 1991 and on June 28, 1991, each accompanied by a breakthrough ceremony (Cannon, 2002). The next few years were spent refining, equipping, and finishing the tunnels. In 1994 the Channel Tunnel was considered completed. It opened for business in late 1994, offering three principal services: a shuttle for vehicles, Euro-star passenger service linking London with Paris and Brussels, and through freight trains.


Fig 1: A map representation of the Channel Tunnel. (Source:

The Channel Tunnel was a build-own-operate-transfer (BOOT) project with a concession. The TransManche Link Group (TML) – a merger of the British contractors Translink Contractors and the French consortium Transmanche Construction, designed and built the tunnel, but financing was through a separate legal entity: Eurotunnel. Eurotunnel absorbed the Channel Tunnel Group (CTG) and France Manche (FM), two groups representing the British and the French governments, and signed a construction contract with TML in 1986, however, the British and French governments controlled final engineering and safety decisions. The British and French governments gave Eurotunnel a 55- (later 65)-year operating concession to repay loans and pay dividends. The Channel Tunnel cost in excess of £10bn (Grant, 1997). However, as a business project it has undoubtedly been a failure. Shareholders in the company operating the concession for the tunnel have witnessed significant loss of value in their equity stake in the company (Castles, 2003).

Private funding for such a complex infrastructure project was of unprecedented scale. An initial equity of £45 million raised by CTG/FM, increased by £206 million private institutional placement, £770 was raised in a public share offer. A syndicated bank load and letter of credit arranged £5 billion. Privately financed, the total investment costs at 1985 prices were £2600 million. At the 1994 completion actual costs were £4650 million; an 80% cost overrun. The cost overrun was partly due to enhanced safety, security, and environmental demands. Financing cost were 140% higher than forecast (Grant, 1997; Genus, 1997). In 1996 the American Society of Civil Engineers identified the tunnel as one of the Seven Wonders of the Modern World (Hereford, 2005).


A project by definition is a planned set of tasks that are interrelated and are to be carried out over specific period within a fixed cost and limitations. It is therefore a temporary endeavour which aims to achieve specific objectives and usually will bring about a value change (Ireland,2006; Cleland, 2006). It is therefore not repetitive, permanent, and not routine. Projects must have definite cost, quality, and specified time expectations. Project management is therefore the process of organising resources with the aim of achieving specific project objectives. Projects must therefore have features that distinguish it from routine activities. It must have definite objectives which aim to achieve change and must be delivered within a timeline. Defined steps and an organised approach are used to achieve objectives and must have measurable quality and performance expectations for results (Dinsmore et al, 2005).


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Castles, C., (2003)
Cleland, D., (1988). "Project Stakeholder Management," Project Management Handbook, 2nd ed. (New York: Van Nostrand Reinhold).
Dinsmore, P. and Cooke-Davies, T., (2005) The Right Projects Done Right!. John Wiley and Sons. 
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Genus, A., (1997). Managing Large-Scale Technology and Inter-Organizational Relations: The Case of the Channel Tunnel. Research Policy 26, pp 169-189. (Online) Accessed March 6th, 2011 (Online) Accessed March 05, 2011
Kerzner, H., (2003). Project Management: A Systems Approach to Planning, Scheduling, and Controlling (8th Ed. ed.). Wiley. 
Kirkland, C., (1995)
Lemley, J., (1995). Managing the Channel Tunnel – Lessons learned. Tunnelling and Underground Space Technology 10 (1), pp 9-11.
Pinto, J.,and Mantel, S., (1990). "The Causes Of Project Failure," IEEE Transactions on Engineering Management, EM-37, 4: pp 269-276.
Staw, B., and Ross, J., (1987). "Behavior In Escalation Situation: Antecedents, Prototypes, And Solutions," Research in Organizational Behavior, Vol. 9 (Greenwich, CT: JAI Press, 1987), pp. 39-78.
The Standish Group Report Chaos (1995). (Online) Accessed March 6th 2011.
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