Channel Tunnel (Eurotunnel) Failure Project

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Table of Contents

Introduction
Project Planning and Control
References

Introduction

Channel tunnel was a privately funded project by bankers consisting of an underground tunnel from France to England. This was a double-rail tunnel with a bid of US$5.5 billion that was to be constructed using new technology that needed modification as the project went on as there could be unplanned situations and changes required by various parties.

The main reason for this project was to develop a stable and fixed transportation line for the two countries to improve trade and economic development. There were several ideas floated by Britain and France regarding the project of the tunnel in 1974 followed by discussions in 1978 (Gourvish, 2006). The ideas discussed focused mainly on the advantages and disadvantages of the proposal about the trade and development between the two countries. In 1983 banks and contractors from the 2 countries recommended the commencement of the tunnel project just before the two countries agreed on the environmental and security effects of the project and its corresponding impacts. Channel Tunnel Company won the contract in 1986 through a bid of US$5.5 billion.

Banks and private sources financed the project through equity and loan capital markets. The concessional contract had a scope of work, estimates of the entire project, timeline of the project, and rules of engagement. The agreement had also put in place some risk management plans and mitigations to take care of any risks that would come up in the future and have effects on the project.

Project Planning and Control

There was the completion of the project at the end but it was delayed by around 19 months, which led to the use of an extra US$3 billion. This increased the initial cost that was standing at US$5.5 billion. Details were not fully agreed upon leading to delays and extra costs; warning signs rolling stock were lacking in the design since specifications and requirements demanded by each of the countries were not the same, there were no estimations for ventilation or air conditioning systems that were to be used in the project. About US$200 million more for air conditioning was to be included.

There were some newly approved blueprints by the Intergovernmental Commission that came up during the progress of the project. There was a lack of well-specified span details that ended up in poor cost estimation, budgeting, and planning of resources. The initial overall cost of the project rose from US$5.5 billion to US$7.1 billion. The unplanned variations in safety necessities also contributed to a negative impact, as there was no clear comprehension of the unknown risks for them to be limited.

There were some uncompromising features of the project and cross-cultural differences between Britain and France, which needed harmonization before the commencement of the project. This caused a delay in the project. There was no careful establishment of the scope of the project, which plays a crucial part in project management and implementation, and this increased estimates. The implementation team concentrated so much on the additional deliverables instead of focusing on the main deliverables that were in the concession agreement.

There was also unsatisfactory risk allocation in the contract costs resulting in an additional US$2.25 billion. The proposal to widen passenger doors increased to US$61 million. This would reduce the extra expenditures experienced during project progress.

Scope Management

The scope of the work must have clear details and the contract before commencement of the project. This would ensure that there are no increases in estimates or the budget due to resource adjustments. The list of deliverables needed to be exhausted during the contracting stage to avoid the costs of unplanned works like air conditioning.

Time management

The stakeholders of the project should have allowed for time for well planning before the start of the project. This would also apply to work schedules. The project team needed to adhere to the schedule about the deliverables to avoid extra costs experienced in the project during the implementation stage.

Integration Management

There was a need for cross-cultural characteristics between the two countries to find out the effects of the project in both countries. The contracting team would then consider the effects of the project on the arising issues concerning the cross-cultural characteristics and include them in the concessional agreement.

Communication Management

The Intergovernmental Commission put in place by the two countries would have consulted widely with other stakeholders before approving other features of the project. The commission ought to have consulted widely by engaging other stakeholders in project progress meetings to discuss the issues that arose during the project progress.

References

Gourvish, T (2006). Official History of Britain and Channel Tunnel (1^st ed.). London, United Kingdom: Roultedge publishers.

Horine, G. (2009). Absolute beginners guide to project management (2nd ed.). Indianapolis, IN: Que Publishing.

Patterson, K., Grenny, J., McMillan, R., & Switzler, A. (2012). Crucial conversations: Tools for talking when stakes are high (2nd ed.). New York, NY: McGraw-Hill Professional Publihing.

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