The Channel Tunnel Project

1. THE CHANNEL-TUNNEL
PROJECT
CLOSE OUT PHASE
PREPARED BY: SHIVAM SOOD (PP18085)

2. The Chunnel Tunnel Project Close Out Phase
 Reflection on overall performance
 Settlement of claims
 Financial status
 Post project evaluation
Scope Management
Time management
Cost management
Quality management
Human resource management
Communication management
Risk management
Procurement management
Integration management
OBJECTIVES

4. Scope Management
 Lack of defined scope
 Intervening of IGC
 Irregular and uncontrolled changes in project.
 Compatibility/Coordination issues between different teams.
 The operations began even before its completion.

5. Scope Creep
 Scope creep in project management the phenomenon of
uncontrolled changes or continuous growth in the project´s scope.
This phenomenon is caused when the scope is not clearly defined.
 There were irregular and sudden changes in the project.
 Without additional funding during closeout.

6.  Absence of historical records with similar projects.
 Lead to some requirement gaps
 Risk impact was not considered
 To improve safety, there was need of air conditioning system that was not
included in initial design.
 All this lead to budget overrun.
 Rating-2
Other Reasons

8. Time Management
 Gushing effects of the earlier phases.
Rapid bidding and concept development.
Insufficient time for detailed design studies
Irregular changes by IGC
Approval of drawing from both governments.
Rail and car systems were delivered late.
Alterations of door sizes. (9 months delay)

9. Time Management continued….
 Team work and communication broken down in several key areas.
 Time overshoot: greatest impact of ROI.
 Lead to 19 months project delay.
 Finally, took over 20% more time(6years over 5years), with an over
budget of 80%($14.9 billions over $5.5 billions) and ended in 1994.
 Rating-3.

11.  Cost is one of the most difficult aspect to plan for when a project has such a
huge magnitude, the project management team had serious challenges in
planning and detailing.
 Cost management is the process of planning and controlling the budget of a
business basically a form of management accounting that allows a business
to predict impending expenditures.
 In Close Out Phase, the discussion reflects on overall performance,
settlement of claims, financial status and post project evaluation
Cost Management

12.  The bit price was US$ 5.5 billion which included a 32 mile approximately
51.5 km double rail tunnel to accommodate both through-trains and special
car and truck carrying shuttle train.
 From Project management perspective, it was very clear that the cost
estimate were not detailed out as not enough time was provided to complete
the detailed design.
Cost Management continued….

13. What was the problem w.r.t. cost
management?
 The majority of effort was focussed on analysing the sources of cost
overruns and attempting to assign blame to one or more of the participating
organisation.
 The project team did a reasonable job when it came to planning the
technical equipment that would be needed and understanding the
complexity involved.
 There was much interpretation open for agencies like IGC that might have
better off detailed during the planning sessions.

14.  The closeout phase explores the total cost impact not only on the
construction cost overruns but also the lost revenue and carrying
cost of project delayed by 19 months.
 The project stakeholders could not expect to see a return on
investment until significantly longer than had been initially
expected because of the “bare minimum approach”.
 Rating-1

16.  The overall quality of the delivered project, as measured during closeout
was impressive as the quality parameters achieved were above industry
average.
 Both countries followed different specifications and it was decided that
the contribution on any detail would be done by considering higher of
the two specifications.
Quality Management

17.  Through the effective quality and safety programs even the work place
accident rates during the project were well below the industry average.
 In terms of Engineering design and expectations, the quality of the
project was up to the mark.
 Rating-4.
Quality Management continued….

19.  The Chunnel Project required the cooperation of two national governments, Bankers,
various contractors & regulatory agencies.
 46 contractors were hired to complete the design requirements and as it turned out
the time required to complete the tunnelling was finished 3 months ahead of schedule.
 Contractual errors were made in estimates leading to additional contract claims of US
2.25 Billion dollars.
 It was the misjudgement of HR department to hire 15 thousand workers on the
project.
 Below the ground thousands of construction workers , machinist and engineers were
involved in boring 3 tunnels for 32 miles from both borders across the Chunnel.
Human Resource Management

20.  The project Management team hindsight could have done a better
job of planning ,detailing and designing the project. As the team
gave up majority of control to IGC it enhanced the complications of
the project resulting in time and cost over run.
 Most of the employees were demotivated due to non settlement of
claims thus win-win situation was lost.
H.R. Management continued….

21. ITEM ENGLISH SIDE FRENCH SIDE
Recruitment 50% travelling men.
Housed in temporary camp.
Recruited by depressed
mining region.
95% men from depressed
region.
Part of employment
regeneration.
Help wit job at end of project.
Polices Poor safety record. More organized union
structure.
Problems Senior managers didn’t get
along.
Harmonious atmosphere.
H.R. Management continued….
 Rating-3

23.  The communication was prevalent on formal level which is evident
from the quarterly meetings that were held between the two
countries and the concerned authorities.
 The two countries didn’t had good communication among
themselves, resulting in delay and cost overrun.
 This project involved 7 lakh share holders, 220 International banks,
construction companies and suppliers causing significant logistical
and communication challenges.
 Negotiation was not proper at the closeout since bankers didn’t
settle for the claims.
Communication Management continued….

24.  Each side worked towards a common goal and didn’t feel the need to
communicate as they assumed that both the parties were working
towards meeting in the middle.
 Lack of communication during development and design of the project
in the early stages let to difference of opinions in the later stages.
 The financial backers of the project where keenly focused on
minimizing there losses and as such refused to accept negotiations for
settling contract disputes.
 Delay in communication regarding the specification change.
 Rating-2.
Communication Management continued….

25. Communication Management continued….

27. Procurement Management
 It was quiet complex and under vigorous time constraint. So certain
assumption errors was made regarding ability to have enough resources.
 Regular intervention from IGC and their slow decision making led to
change in scope which in turn led to repetitive procurement.
 Use of more advance and sophisticated equipments lead to procurement of
new equipment.
 Rating -2.

29. Risk Management
 There were two type of risks in this project:
i. Technical risk.
ii. Financial risk.
 Previous studies, technical analysis and risk involved in such projects were
studied but not implemented in the later part of the project.
 There was close to no contingency for unknown unknowns, which in turn
led to increased number of arbitrations and claims.
 Fast tracking the process of overlapping design and construction under
pressure of bankers and investors made it more risky.

30.  The tunnel was perfectly bored within the chalk marl layer
throughout.
 In some case risk was also overmanaged for e.g. use of much
advanced and sophisticated equipment. (eg Waterproof TBMs on
French side)
 Number of casualties was way below the industry average.
 Rating-3.
Risk Management Continued……..

32. Integration Management
 Both the governments refused to guarantee the project financially
which put an additional burden on privatised sector.
 Communication b/w the French and England Companies was very
limited.
 Some portions of the project were completed very early (for e.g.
tunnelling) but other areas (for e.g. key mechanical system) were
delivered late.

33.  Team work was focused on each party meeting it’s own priorities and
interests rather than working towards a acceptable solutions.
 Due to lack of integration they didn’t came up with a common
conclusion on the specification of rolling stocks.
 Rating-2.
Integration Management Continued..…..

34. Rating scale (Closure Phase)
PROJECT MANAGEMENT ASPECTS RATINGS
Scope Management 2
Time Management 3
Cost Management 1
Quality Management 4
Human Resource Management 3
Communication Management 2
Risk Management 3
Procurement Management 2
Integration Management 2
5- Excellent; 4-Very Good; 3-Good; 2-Poor; 1-Very Poor

35. 0.0
1.0
2.0
3.0
4.0
5.0
2
3
1
4
3
2
3
2 2
RatingsScale
Ratings
Close Out Phase- Assigned Ratings

36. SWOT ANALYSIS OF PROJECT MANAGMENT IN CLOSE OUT PHASE

37. S - Strengths
• Project Quality was impressive.
Quality
Management
• Close to 15000 workers were
employed
• Overall HR management was very
good
Human Resource
Management

38. W - Weaknesses
• Scope was Ever-Changing.
• No Clarity
Scope
Management
• Scope was not clearly specified, led to
poor Procurements throughout the
project.
Procurement
Management
• No clarity in scope led to repetitive
approvals
• Slow approvals and late Procurements
Time
Management

39. O – Opportunities
• Emphasis was always on making money
rather on effective Construction
Operations.
• Too much involvement of bankers and
investors.
• Delay in Project led to loss in ROI,
Unclear Scope led to cost overruns in
settling claims.
Cost
Management
• No contingency for Unknown Unknowns
• Non effective Change ManagementRisk Management

40. T - Threats
• Very Poor communication b/w two
countries.
• Poor communication led to slow
approvals and thus delaying whole
project.
Communication
Management
• All parties had only their profit in mind
and not Projects’.
• Integration was poor b/w Investors – IGC
– Contractors – Sub contractors.
Integration
Management

41. THANK YOU!!!!