The Chunnel Tunnel project connecting France and the UK suffered from significant cost overruns and delays. Originally estimated at $5.5 billion, the final cost increased to $14.9 billion. While the tunnel was a technical success and opened 19 months behind schedule, poor scope management, lack of risk planning, and issues with contractors and changing requirements led to budgetary problems and left investors unhappy. However, it provided an important new transportation link between the two countries.

1. CASE STUDY ON CHUNNEL TUNNEL PROJECT
Team 5

2. Overview:
• Designed to create spur in Economic Development
• Improve the trade relations with alternate high speed transportation
• One of the largest privately funded construction Project between two countries
• 51.5 Km long double rail tunnel.
• Project was initially estimated at 5.5 Billion dollars on completion the cost increased
to 14.9 Billion dollars
Chunnel Tunnel Group/French
Manche (BOT basis)
Transmanche Link
(TML) (Construction)
French and
British Govts.,

3. Scope Management
Inception
• Lack of defined
scope
• Scope defined in
Lump sum basis
• Difficulty in
Resource
planning
• Formation of
IGC
Development
• Enormous scope
• Measures to
prevent the
scope creep was
not put in place
• Project
Planning, cost
estimation,
Funding was
affected due to
scope change
Implementation
• IGC had major
control over
scope
• Frequent
change in scope
• Door and A/c
System
contributed to
major scope
changes
Closeout
• Even when the
tunnel was
deemed to
complete, there
were
discrepancies
over scope of
some works.
Rating :
2
2
2 22

4. Time Management
Inception
• Hasty Bidding
and concept
development
• Not enough time
provided to
complete
detailed design
studies
Development
• Change in
requirement by
IGC caused delay
• Approval of
drawings
mandated from
both
governments
• Very good
tracking with
hefty status
report
Implementation
• Faster Tunneling
• Rail and car
systems were
delivered late
• Alteration of
passenger door
sizes caused
delay for 9
months.
Closeout
• Cascading effects
of previous
phases
• 19 month delay
• Project
management
team could not
be held
responsible
Rating :
3
3
3 2
2

5. Cost Management
Inception
• Estimated cost
of USD 5.5 bn.
• Initial Cost
Estimates were
not detailed
out.
• Financing
arranged via
equity and
capital market
Development
• USD 2.25 Bn
claim against
Eutotunnel by
contractor was
not anticipated
• Use of
sophesticted
equipment not
anticipated
Implementation
• Unnecessary
use of costly
technologies in
some cases like
grouting.
• Wrong
selection of
TBM.
Closeout
• Efforts were
driven towards
settlemnt of
claims rather
than analysing
on sources of
cost overrun.
Rating :
2
1
2
1
2

6. Quality Management
Inception
• Difference in
standards ->
Higher
standard
• Latest laser
and computer
technology
proposed to
bore the
tunnel.
Development
• Good PAC was
framed.
• No margin for
errors
• Formation of
IGC
Implementation
• Stringent
requirements
from IGC
• Very high
accuracy
maintained.
Closeout
• Quality
parameters
achieved
were above
industry
average.
Rating :
5
4
5
5
5

7. Human Resources Management
Inception
• Team work
envisaged
• Good structure
with proper
responsibilities
formed.
Development
• Every British
team member
had French
counter part
Implementation
• Managed
15,000 workers
in good
manner
• Workers from
different
cultures were
engaged with
high level of
efficiency
Closeout
• Most of the
persons were
demotivated
due to non
settlement of
claims.
• Win-win
situation was
lost
Rating :
3
3
3 2
3

8. Communications Management
Inception
• Difference in
languages of
two countries
Development
• Limited
communication
between two
teams since
both of them
were trying to
meet in
middle.
• This lead to
difference of
opinion at later
stages
Implementation
• Delay in
communication
regarding
specification
change.
Closeout
• Negotiations
not proper at
Closeout since
bankers did not
settle for
claims.
Rating :
2
3
3 1
2

9. Risk Management
Inception
• Technical risk only
considered
• Process and
approval risk were
not envisaged
• Both governments
denied to provide
financial
guarantee.
• Social cost benefit
analysis not done.
Development
• Over management
of risk – advanced
techniques
considered
• Contingencies and
margins were
barest mimimum.
• Contractors forced
to consider best
situation.
• Risk assessment
plan was not
made.
Implementation
• Fast tracking of
design and
construction
processes done
without risk
analysis.
• New unproven
technology
increased risk
• Banks were
involved for
minimising the
risk, however IGC
was controlling.
Closeout
• Courts ruled in
favour of
contractor.
Rating :
2
2
2
2
2

10. Procurement Management
Inception
• Rigorous time
constraints
caused hasty
procurement
plan/contracts.
• Procurement of
rolling stock and
associated major
equipment
finalised on cost
plus percentage
fee basis
Development
• Procurement
delayed since
scope/
specification was
changing.
Implementation
• Fixed price
contracts with
several
contractors
• Differences in
goals since many
contractors were
having equity.
Closeout
• Cascading effect
of
implementation
created 17
months delay.
• Non settlement
of extra claims
Rating :
2
2
2
2
3

11. Integration Management
Inception
• Various
international
agencies took part
for
conceptualisation.
• Mistrust among
agencies since
both govts didn’t
provide guarantee
but placed
requirements.
Development
• 46 contractors
were deployed for
design
• 7 Lakh
shareholders, 220
Lending banks
were involved for
financing.
Implementation
• Huge resources,
huge scope of
work were
managed in best
of industry
standards.
• Logistical and
communication
challenges.
Close out
• Teams not
integrated due to
poor
communication.
• Each party tried to
focus on their own
interests.
• International
chamber of
commerce
engaged for
dispute resolution
Rating :
3
2
3 2
3

12. Project
Management Area
Inception
Phase
Developme
nt Phase
Implementa
tion Phase
Closeout
Phase
Average
Scope Mgt 2 2 2 2 2
Time Mgt 3 3 2 2 3
Cost Mgt 1 2 2 1 2
Quality Mgt 4 5 5 5 5
HRM 3 3 3 2 3
Communications
Mgt
3 3 2 1 2
Risk Mgt 2 2 2 2 2
Procurement Mgt 2 2 3 2 2
Integration Mgt 2 3 3 2 3
Rating Scale - Summary
Rating Scale : 5-Excellent, 4- Very Good, 3- Good, 2- Poor, 1- Very Poor

13. Key Dates
Year Key Developments
1802 Albert Mathieu put forward a cross channel proposal
1875 Channel Tunnel Company Ltd began preliminary trials
1882
Experimental work on both sides of the Channel started but soon idea was
abandoned citing national defense security.
1975 A UK–France government backed scheme that started in 1974 was cancelled
1984
British & French govt. agreed to common safety, environmental & security
concern, prior opening up the project to bidder
1985 British & French govt. asked for proposals.
1986
Project awarded to Eurotunnel on BOOT basis with 55 year concession
period with initial cost of US$ 5.5 billion.
June 1988 In France, first tunneling was started
December
1988
Tunneling operation was started in UK
May 1994
Tunnel was formally inaugurated & started functioning. Project was
completed with cost & time over run.

14. Major Area of Strength Managing this Project
QUALITY
MANAGEMENT
• Quality management was implemented successfully.
• Technical expertise .
TEAM WORK
• Excellent team work between two groups.
• Construction of tunnel completed 3 months ahead of schedule.
• Project office support was excellent.
SAFETY
MANAGEMENT
• Accidents below industry average.
• 15000 workmen, numerous engineers, handled precisely.

15. Major Opportunities for improvement from Management P.O.V
SCOPE
MANAGEMENT
• Detailed Functional requirement & Technical specification
• Consideration of Scope contingency
CONTRACT
MANAGEMENT
• Applicability of Single Contract to both group.
• Coverage of risk exposures
COMMUNICATION
MANAGEMENT
• Communication protocol preparation
• Protocol for escalating unresolved / pending issue
• Tracking & monitoring

16. Major Opportunities for improvement from Management P.O.V (cont.)
RISK
MANAGEMENT
• Project process & approval risk was overlooked.
• Not prepared to handle the degree of IGC supervision & change
management controls.
• Contingencies for known & unknown risk & a strategy for handling
change management missing.
COST
MANAGEMENT
• Use a standardized change-control management to eliminate cost
considerations issues imposed by out-of-control-change management
control processes.
• Specification and validation of functional and technical requirements at
front.
• Replacement of material, equipment with alternate option of same
specification.
STAKEHOLDER
MANAGEMENT
• Project Stakeholder management plan was not prepared in detailed and
also not followed throughout project life cycle. By implementing this,
variance in cost, schedule and extra claims could have been minimized.

17. Major Project Management Lessons learned
Review past engineering studies & take
them in consideration
Technical as well functional aspects of
project management should be given
equal importance
Detailed risk analysis required in
inception stage & needs to be tracked,
monitored during PLC of project

18. Major Project Management Lessons learned
Maintaining communication throughout the
life of project yields better operational
project results.
In large international construction projects of
the involving countries, Govt. support &
communication channels should be roped in.
Whole hearted effort to be made right from
the inception of project in order to avoid
adverse situation at the end

19. Conclusion:
• Time Over run – 19 months delay
• Cost Over run – USD 9.4 Bn
• Trail of unhappy investors and stakeholders
• Key learnings
• Modern Engineering Marvel
• Undoubted Public benefit