The Three Projects Of The Panama Canal V.1.3
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The Three Projects Of The Panama Canal V.1.3 Presentation Transcript

  • 1. South Florida PMI Chapter Dinner MeetingThe 3 Projects of the Panama CanalLessons Learned from one of the engineeringwonders of the world or how a Mosquitocan kill your project!
    Roberto Toledo, MBA, PMP
    AlphaConsultoría
    México and LatinAmerica
  • 2. 2
    Agenda
    Some history and the importance of the Canal
    The French project and its lessons learned
    The American project and its lessons learned
    The Panamanian project and its lessons learned
  • 3. 3
    Theimportance of LessonsLearned
  • 4. The importance of the Canal
    Technically it is one of the greatest engineering achievements of humankind.
    It longs 80 km from the Atlantic to the Pacific Ocean.
    Its width ranges from 91m to 300m.
    It possesses two terminal piers, three sets of twin locks and one of the largest artificial lakes in the world: Gatún Lake, which covers 425 square kilometers
    4
  • 5. 5
  • 6. Beyond engineering is about economics
    It’s the second primary route for imported goods to the USA (first customer)
    It’s a main route for exported goods for China (second customer)
    It grossed 1.3 Billion USD in 2008
    Gathered 2.3 Billion USD for the Expansion Program
    Out of 5.2 budgeted
    Holds A2 investment rating
    6
  • 7. Panama, the Nation of the Canal
    25% of the Government ‘s income comes from the Canal’s Economy
    Direct and Indirect Contribution of the Canal as a percentage of the Government’s current income
    7
  • 8. What does it mean to the World?
    8
  • 9. Some History…
    First “suggestion” of a canal by Charles V, King of Spain in 1534
    The Spanish Camino Real for transporting Peru’s gold
    Feasibility study in 1793 by Italian-born Malasspina
    US construction of the Panama Railway in 1855
    • In the 1870’s due to the Suez Canal Construction success, Ferdinand de Lesseps envisioned a new great endeavor: The Panama Canal
    9
  • 10. The French Project
    Started in 1880 by Ferdinand de Lesseps
    Lacked prior studies of the geology and hydrology of the region
    Facts and experiences ignored:
    • There was a level difference between the oceans (known since 1590)
    • 11. The Darien Expedition by the Scots in 1699
    • 12. The somewhat successful American Railway experience, considering a dead toll of 12,000 workers by malaria and yellow fever
    10
  • 13. The French Project
    Work continued trough 1889, when the French abandoned the project
    Heavy machinery was insufficient and not working properly
    More than 22,000 people died due to diseases like malaria and poor living conditions
    The digging made by the French were vast and used though
    11
  • 14. Lessons Learned
    Prior failing -extreme disaster- experiences were dismissed due to a seemingly recent successful experience -the Suez Canal-
    Prior technical knowledge was not reviewed nor verified
    Environmental conditions were not considered as part of the Construction Management Plan
    Sanitary conditions were not considered as part of the Construction Management Plan
    12
  • 15. The American Project
    Foreign landowners in Panama lobbied the US Congress to chose Panama over Nicaragua for a canal
    The Cromwell scam
    The access-granting treaty to the Canal Zone was not ratified by Colombia prompting Panama’s independence
    13
  • 16. Experiences considered
    The American Railway construction through the Isthmus (1885)
    The Spanish-American war in the Caribbean (1898)
    “Tropicalized” heavy machinery
    The mosquito vector and disease control
    How they did it???????
    14
  • 17. Lessons Learned
    Political issues got involved into a technical decision
    Panama vs. Nicaragua
    Panama’s secession from Colombia
    Some technical studies were postponed due to political pressures
    Proper housing and sanitary conditions for workers are a must.- People are your most valuable resource!
    The adaptation of the tools (heavy machinery) avoided delays
    Thorough planning and tight control allowed finishing the project two years ahead of time
    PM did not formally existed as a discipline
    15
  • 18. The handover to Panamanians
    The treaty of the canal was signed in 1903
    The new canal was finished in 1914, two years ahead of schedule
    A new agreement was signed in 1977 named the Torrijos-Carter Treaty
    In 1999 the US government gave Canal’s control to Panama
    16
  • 19. The Panamanian Project
    Only 25 ships can go through the Canal every day (reservation slot needed)
    Ships’ size has steadily increased since WWII
    Heavier traffic is expected in the following years
    Two competing projects challenged the Canal’s supremacy (Mexico and Nicaragua)
    Panama’s economy dependence on the Canal increases every year
    17
  • 20. Bigger is better
    More larger-than-Panamax-size
    ships are being built in the
    world
    18
  • 21. Contribution to Panama’s Economy
    Direct and Indirect Contribution of the Canal as a percentage of the Government’s current income
    The impact of the Canal’s
    contributions to Panama’s
    economy grows every year.
    19
  • 22. The Strategic Plan
    Strategic Stages at the Panama Canal
    Maximize Benefit of Transit Business
    Expand Transit Business
    Create Options for Growth
    20
  • 23. From past lessons…
    Political gambling has been reduced to a minimum
    A wide, extent communication plan has been established
    Economical benefit -our business, our country, our customers, our people- is the guideline
    Technical feasibility included: Heavy Industry studies, TI, Marketing, Engineering, Hydrogeology, Economic and Project Management and 6-Sigma
    21
  • 24. From past lessons…
    Human feasibility includes: Healthcare, Personal and Professional Development, History and Sociology
    Stakeholders considered are quite more in number and interests than in the past
    22
  • 25. Where is PM contributing?
    Some unrefined PM practices were used during the American Project (still for many years remained isolated practices)
    The building of a new Canal implies using state of the art PM tools
    23
  • 26. Portfolio Management
    Managing new construction technologies developed ad hoc for this endeavor
    Managing Canal operations in parallel to construction activities
    Managing interfaces.- where construction and daily operation activities meet
    Managing millionaire budget coming from external sources
    Managing several complex stages at different levels, zones and stages
    24
  • 27. Time Management (Top Level)
    25
  • 28. Cost Management
    Multimillionaire Budget handling coming from diverse sources implies a strict expense control and detailed accounts reporting
    Financing: 2.3 billions
    Own cash flow: 2.9 billions
    26
  • 29. Cost-Schedule Alignment
    • Modern PM allows for proper alignment of budget and schedule for every subproject within the portfolio
    27
  • 30. Risk Management
    • The development, construction, and start-up of new high-tech facilities, while the system is still working requires an adequate risk management
    28
  • 31. Quality Management
    Technological developments must live-up beyond their expectations, and good quality management is the key
    Quality standards are required for all components. Project Quality Management aligns planning, control and assurance.
    29
  • 32. Resource Management
    Adequate procurement, supply, and human capital, coming from everywhere in the world must be properly managed, with the necessary planning, controlling and executing.
    30
  • 33. Project running as expected…
    Canal Expansion Project seems to be online according to the macro-schedule
    Everyday operations at the Canal are running as usual
    Fine control over smaller projects and subprojects is vital to remain on line
    The ACP and its governance bodies seem to be covering properly their roles as sponsors and stakeholders
    31
  • 34. Success must be repeatable!!
    By using a consistent methodology efficiency and consistency are guaranteed
    Don not brag about your successes
    Avoid the French Syndrome: One great success does no guaranty another greater success!
    We know some new surprises will emerge in the future for the Panama Canal… be wise and be prepared…
    Lastwords…
    32
  • 35. ¡Thankyou!¿Questions?
    Roberto Toledo, MBA, PMP
    ManagingPartner of Alpha Consultoría
    rtoledo@alpha-consultoria.com
    (+52.55) 5211.6828