The Chunnel project aimed to build a tunnel under the English Channel connecting France and the UK. It was one of the largest privately-funded infrastructure projects ever involving multiple governments, banks, and contractors. [1] The project went over budget, with costs increasing from $5.5 billion to $14.9 billion due to scope creep and delays. Issues included lack of proper risk management, incompatible requirements between parties, and breakdowns in communication. [2] Key lessons included the need to give equal importance to technical and functional project management, ensure contracts and financing allow for contingencies, limit external stakeholder involvement in operations, and leverage new technologies and lessons from prior projects for large, complex ende

1. The Chunnel Project
A learning out of Failure
By
Garvit Bharadwaj
Piyush Tyagi
Pranay Karthik
Rachit Anand
Rajesh Bhatia
Sankarshan Joshi
Sumeet Gupta

3. Channel + Tunnel = Chunnel

4. 19
The Chunnel Months
Delay
 One of the world’s Largest Privately Funded
construction project involving
 2 Governments – French and British
 220 banks
 Numerous contractors
 Regulatory Agencies (IGC)
 The project was bid at $5.5 b but completed at $14.9 b
$8.4b
Scope creep

5. The Chunnel - Contracts
French + British BOT-Contract CTG/FM
Govt
CTG/FM Contract TML

6. Next 15 Minutes
Inception
Development
Execution
Closeout

7. What is expected?
• Proper risk management
• Engineering risks
• Process risks
• Approval risks
• Financial risks
• Business risks

8. Inception Development Execution Closeout
• Inception
• Historical background of the project
• Objective
• Political climate
• Pre-feasibility study

9. Inception Development Execution Closeout
• Scope:
• Fixed transportation (51.5kms)
• Economic development
• Pressures causing mishaps:
• Lack of scope causes resource planning, cost
estimating & budgeting difficult.
• Air-conditioning costs
• Formation of intergovernmental commission

10. Inception Development Execution Closeout
• Finance aspects:
• Treaty says to no government aid
• Pursued via equity &loan capital markets.
• Scheduling:
• Activities related to activity definition, activity
sequencing, activity duration estimates.
• Planning 3 tunnels which required 46 contractors to
complete the design requirements.
• Changing safety rules created negative variances.

11. Inception Development Execution Closeout
• Incompatibility issues could have been avoided by
stating Initial quality requirement in more detail.
• Areas of improvement There was much interpretation for
the agency like IGC .The IGC decision to change 600mm
doors to 700mm doors itself delay the project to 9
months.
• Teamwork & cooperation considering the scope of the
project was very important.
• Contractual agreements made teamwork a complex
activity.
• It was very difficult to come to a mutually agreeable
solution to material issues due to incomplete
requirements, scope changes and thus , risk response
strategies should have been considered.

12. Inception Development Execution Closeout
• Efficient communication is very important in
preplanning, contract negotiations, financing and
technical issues during the inception stage.
• Communication seemed to breakdown in case of issues
regarding organizational structure , finance and
contracts as the issues were not timely solved.

13. Inception Development Execution Closeout
• Communication plan addressing horizontal and vertical
communication channels should be in place.
• Plan should also include information sharing, issue
tracking and performance reporting.
• Although , advanced project management tools and
techniques were used, the decision-making ability to
address critical issues from centralized position seemed
insufficient

14. Inception Development Execution Closeout
Some critical aspects in development phase:
• Massive communication barriers.
• Problems due to huge scope of the project.
• IGC played critical and detrimental role.
• Cost planning.
• Banks played an important role from start.
• Scheduling was well done but project still faltered on
deliver date.
• IGC’s highest standard norm.

15. Inception Development Execution Closeout
• Better risk management could have been done.
• Lack of investment in team building.
• Two Government's denial to provide financial
guarantee.
• Project office’s work lacked detail.
• All in all, given the facts, the project delay and cost
overrun were almost foregone conclusions

16. Inception Development Execution Closeout
Too Early A Start
New
Approval Issues Technology
Design
Underground
Construction Enggineering Construction
Risks

17. Inception Development Execution Closeout
Bureaucratic Pressures
French + British Fixed Price
Control Costs Implications for
Govt. Pressures TML
Squeezing Low Bid Prices
“Winner Takes
Revenue via with Best Case
All” Issue
Change orders Scenario
Project cost Rise TO $7 billion
from $4.3 billion

18. Inception Development Execution Closeout
Controls in Wrong Hands
Controls
Construction
Financing Banks
Companies
Profit Maximization Risk Minimization
NO IMPORTANCE TO OPERATIONS

19. Inception Development Execution Closeout
Communication Issues
Different
Cultures Different
Different
Countries Specification
Internal
Communication
Limited

20. Inception Development Execution Closeout
The immense amount of Litigation and Claim against
project.
• Scope: Scope of the project increases due to overall
changes request through out the life of project.
• Cost & Schedule Management: Max. Efforts to
analyzing the source of overrun cost and blaming
participating organization.
• Team work and Communication: Team work and
communication had broken down in several key area.
Like Financial banker focus on minimizing their losses ,so
they refused to negotiate any settlement. Clearly win-win
negotiation far from mind between the parties.

21. Inception Development Execution Closeout
• Time Over shoot: the greatest impact of ROI.
• Quality of project: Quality of a project is up to the
mark as per engineering design and expectation. Even
no. of accident was less as per industrial avg. during
project running time.
• Effective Change Management: They ready to make
changes as per demand without additional funding during
close out.

22. Learning's
• Equal importance should be give to the technical as
well as functional aspects of project management.
• Project contracts and financing agreements should
not be rushed and should provide for contingency.
• External Stakeholders should only play monitoring
role and should not take part in day-to-day operations.
• Large projects like Chunnel Construction requires
leveraging of new technology and lessons learned from
existing project.

23. Thank You!!!! No Questions Please.
We Know You Cant Control,
So Go Ahead And Shoot Your
Questions!
If learned from, Mistakes can be converted into Experiences.