Channel Tunnel Project
Channel Tunnel Project
Channel Tunnel project, which aimed to create a fixed connection between Britain and France, is one of the largest private funded projects in the world. It required the use of newest technology and great management skills in order to deal with unexpected changes. Also the cooperation of two countries’ governments, several constructors, banks and other agencies are needed to make this project run smoothly.
This essay divided the whole project into 4 steps in analyzing: conceive, develop, execute and finish. Further, it demonstrates the key advantages and disadvantages of Chunnel project including project scheduling, risk management, people management, cross-culture communication and so on with critical thinking. In addition, recommendations are provided due to the improvement in these procedures.
The channel tunnel is one of the longest undersea rail tunnels in the world. It has an overall length of 50.5-kilometre and links Folkestone in the UK and Calais in the France. (Anderson, 1994) The proposal of building a fixed link across the English Channel was firstly created as early as 1802 by an engineer in France but it was shelved due to security and political reasons. In 1957, Louis Armand formed the Channel Tunnel Study Group and then presents a design of railway tunnel, bored of submerged, comprising a twin rail tunnel with a service tunnel to the government in 1960. (eurotunnelgroup.com) However, the British minister cancelled the project in 1975 due to financial problems and oil crisis. The project started again until the British and French government reached an agreement, which is finding private promoters for the construction without public funding in 1984. Finally, after negotiate with governments, banks and shareholders, constructions began in 1987 and completed in 1994. The American Society of Civil Engineers recognizes Channel Tunnel as one of the Seven Wonders of the Modern World. (Reynolds, 1996)
Phase 1: Conceive
From a project management perspective, the whole project can be divided into 4 stages which are conceive, develop, execute and finish. During conceive phase, it is necessary to focus on the project’s overall strategy. It considers the projects goal, potential problems and opportunities, possible solutions and the links of projects to other projects. Also it should be clarified projects’ basic assumptions.
In 1981, the British and French governments are agreed to launch the project. Four plans including Eurobridge, Euroroute, Channel Expressway and Channel Tunnel were submitted to the government and Channel Tunnel Group/ France–Manche (CTG/FM) won the bid eventually. After that, an map of organizational structure had been designed:
Source: channel tunnel project overview
The picture above reveals the structure of all participants. Eurotunnel is an international company originally formed by CTG/FM. It is the owner and operator of the whole project. And it provided the construction contract to TML. From 1985- 86, Eurotunnel was controlled by CTG/FM and banks. Each of them holds 50% of it. Later on, Eurotunnel became independent company and then transferred to its shareholders and banks. A 55 years contract had been reached between Eurotunnel and the government of Britain and France based on the proposal submitted. The Construction Contract between Eurotunnel and TML sets out the Eurotunnel is also linked to the banks by a loan agreement and to national railways by a usage agreement. Furthermore, governments hired several experts to build an agency called IGC (Intergovernmental Commission) to ensure the project is under control. IGC was permitted for demanding changes in the process of project to keep it “healthy and safety”.
During the stage of planning, the total cost of the project was 5.5 billion dollars and the whole project would be private financed without any government aids. On the consideration of CTG/FM owned an agreement, which gave group the sole right of Channel operation during 55 years, over 200 banks around the world offered loan to the project. (Genus, 1997) However, for a project this large, the lack of scope makes to resource planning, budgeting and cost calculating very difficult, thus it would be a challenge to use ROI (return on investment) to provide accurate data. Because ROI only gives results based on assumptions from TML
Schedule management plays an important role in the first stage as well. Several milestones were built including (Fairweather, 1994):
1. 1974, idea of tunnel gathered, but abandoned 2. 1978, British and French discussions continued 3. 1985, British and French government asked for bids 4. 1986, The Treaty of Canterbury was signed allowing the project to proceed and CTG/FM won the contract 5. 1987, Channel tunnel project started 6. 1994, the project complete
The schedule was planned to build 3 tunnels, two rail tunnels and one service tunnel allows mixed traffic at short headway (3 minutes between trains) and high speed (100 to 160 km/h) of national trains and its shuttles. These special Shuttles allow rail transportation of cars from one country to another. This made designer to illustrated 12 tunneling faces worked by 11 boring machines. A very complex schedule was made in logistics management and WBS development (work breakdown structure) due to high requirements of activity arrangements and activity duration estimate.
Quality and risk management is another significant part of preparation stage. Management team needs to evaluate potential risks of technical, commercial, political, and financial aspects because if risks are identified early enough, an effective response strategy can be made. A risk impact matrix can be made in analyzing process
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 24 October 2016
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