Chunnel Tunnel Project

The Chunnel Project

The Chunnel Project by Frank T. Anbari, et al. was prepared for the purpose of testifying some project management Applications the Management Science at The George Washington University. The project was primarily supervised by Professor Anbari. The project was undertaken with the aim of creating a connection between France and England through an underground tunnel, which has a representation of the largest private fund construction project. There was a requirement for cooperation between where the two governments and bankers were involved in underwriting the project funding. The project has to take part in four phases which are inception phase, developmental phase, implementation phase, and closeout phase.

Inception Phase

In the inception phase, the first scope of the Chunnel was developed to create a link transportation which is fixed between France and England.

Development Phase

In the second phase which is the development phase, Chunnel project involved an improved planning, agreements, communications and approvals by the government.

Implementation Phase

The implementation phase took place in 1987 last quarter with the concession contract award responding to channel tunnel group.

Closeout Phase

The last phase which is the closeout phase involved how the project was expected to have some gains which were accepted on the grounds of key arenas of project management.

The findings revealed that either one of the largest political and engineering feats in the 20th century should not have happened. However without regard to opinions taken it was clear that the Europe citizens could be proud of the Chunnel. The developers of the project recommended that there should be a process of seeking to advise to generation in the future which contemplates the creation of large infrastructure which looks upon getting carried away some form of excitement of the constructions and designs processes prior to establishment and key players relationships.

Introduction

Chunnel project is a term which is used to define Chunnel tunnel project which was undertaken to have a creation of a connection between France and England. The tunnel which was to be constructed is underground that represented one of the largest project contractions ever taken in the period (Giammalvo, Paul, et al, n.p). The greatest need for the project was cooperation where the two national governments and bankers were involved in the underwriting process for funds availability. New technology was needed to undertake the technological and engineering bit of the project which could need some modifications in the process of construction. The project management involved significant efforts to ensure there was smooth running (Giammalvo, Paul, et al, n.p). They had to include expertise efforts in project management knowledge which has four phases namely inception, development, implementation and closeout stage. Every stage of the project had different parts which involved activities done, and accomplishments, challenges. The challenges of the project came from initial steps, project planning, execution, control and monitoring (Giammalvo, Paul, et al, n.p). The process has been structured with the theme of evaluating the appropriate processes for different project management skills all through to the end of each stage. There was a need to have a consideration of whole project performance examination which is then conducted thereby coming up with several evaluations of the project management that includes strengths, opportunities, threats and weakness. The report covers different sections which seek to analyse the Chunnel Tunnel project which involves phase by phase activities and analysis.

Phases of the Chunnel Tunnel Project

Inception Phase

Question 1: Project Scope

The scope of the project was defined in the first stages of the projects which are in dimensions of costs, times plan and description of the project. The major scope was on the length of the tunnel which are 32miles (Besanko, David, Christopher Stori, and Ed Kalletta, 2). Changing the scope of the project would lead to alterations in the costs and time schedules. Changing the time for the project would lead to a fresh cost budgeting. One of the major proposals included the 32 miles rail tunnel which was double with the theme of accommodating both cars and trains (Giammalvo, Paul, et al, n.p). The bid was to cost the two counties a whopping US$ 5.5 billion. High-level designs were to be provided for the project with enough time required to have the project initiated and running. There was a dire need to have fixed air conditioners which had to cost the country over US$200 million which was set to be added in the initial set budget (Giammalvo, Paul, et al, n.p). The two countries who are the major stakeholders too had economic gain thoughts in mind where the project was set lower the transportation cost, and minimize the cost of transporting goods by other means.

Question 2. Communications

Communications between the French and the Britons were limited due to the language barrier. Having the two teams on different sides of work but functioning towards the middle delayed communications till almost the end of the project. Every team was working towards a common goal which they had set but never felt the need to working together. Lack of communications in the phase of development and design of the project led to differences in thinking and working in the later stages. The project manager had the choice of making plans for interpreters who understood the two languages.

Question 3. Roles of Project Management Office

PMO was set for the project to help in different roles which were important for the projects. The roles were;

1. Helping in disseminating common cultures, languages and mind-set.

2. Management of resources

3. Maintenance of project artefacts and tools

4. Ensuring best practices and processes for the project

5. Promoting governance and strategic planning.

Question 4: Cost and rationale for fixed pricing

The Euro-tunnel was primarily responsible for about 70% of the entire cost of the original contract. The other amount was taken to the maintenance of the tunnel which was 30% and aping done at 6% of the entire cost (Giammalvo, Paul, et al, n.p). The agreement was later revised in 1990 to 1.58billion Euros where TML was to be held responsible for more than 30% of the whole amount. In the process of estimation different efforts were made on the contract leading to about USD 2.25billions of additional claims for the contract (Giammalvo, Paul, et al, n.p). In relation to the risk management, the management team looked to have been reviewed to the scope of the tunnel for primary risks. The project was evaluated at a fixed cost which ensured the paying contractors did no incur more costs. The owners of the contract would prefer the fixed cost to avoid any unusual increments as the project continues. Fixed costs ensured the company undertaking the contract bought all the inputs at the same time i.e. at the start of the project from the cost of the contract paid proceeds.

Question 5: Stakeholders to the Project

The involvement with the stakeholders of the project is very important to make sure the foundation is well laid. The stakeholders understand what project specification they are looking for where they have a better capacity of transferring the ideas to the contractors. Different issues arise mostly at the start of the project which makes it better to solve them at that very first stage to stop them from advancing in a later date. The two primary stakeholders to the project were the two countries i.e. England and France. The Chunnel Tunnel project started with the inception phase where a fixed transportation link was to be constructed between France and England. The construction was driven by the fact that the project was to promote European trade, economic development and develop an alternative high-speed transportation (Goldsmith, Hugh, and Patrick Boeuf, n.p). The agreement between Britain and France in 1984 when the two governments agreed on security and environmental concerns before the opening of the project (Goldsmith, Hugh, and Patrick Boeuf, n.p). The project proposals were set in 1985 from both sides i.e. France and Britain.

Intergovernmental commissions were to be set which were to approve designs putting additional pressure on the scope of the project. Setting up a commission which could come up with designs and drafts for the project and accommodate some ideas which were not considered in the first phase was proving more challenging (Cross, Barry L., and M. Kathryn Brohman, n.p). The whole budget for the tunnel was to be financed from private sources which could not have any input from the government on loans and grants. There was no room for government regulations which only left the government to get into the project only when monopoly cases were reported (Giammalvo, Paul, et al, n.p). Financing was to be done through capital loans and equity markets. Shareholders in equity were found in France and Britain as well. The other cost consideration was on the Eurotunnel which had secured the concession agreements for more than 55 years (Giammalvo, Paul, et al, n.p). There was a single right to have operations in the Chunnel for the time given which meant that any increase in the costs of the delay would have impacted the project flow over the period. There was a project correlation between the definition and costs of the project associated with it. Some of the project time schedules include:

Initial tunnels ideals which were gathered but was not considered -1974

Resumption of the discussion between Britain and France – 1978

The proposal of the tunnel scheme by banks and contractors from the two countries – 1983

Proposals for fixed links by the two governments – 1985

The signing of the Anglo-French treaty which a company by the name Trasmache link (TML) was granted the chance to undertake the project – 1986

The cost for the project was divided into three different categories which included:

1. Lump sum amounts subjected to the terminals and the electrical and mechanical functions of the tunnel.

2. The amount of procurement which was meant for rolling sticks and other associated equipment that was done on the costs-plus the percentage basis.

3. The targeted costs for the tunnel which was done on the cost adding the fixed fee base.

Question 6: Cost Performance Index and Schedule Performance Index

Cost

Time

5.5billion

1984

The SPI and covers the earned values and planned values which may differ many of the times. There was an additional request for $2.25million for the project. The project was responding to a different period which could be affected by economic matters like inflation making the CPI and SPI different for the project.

Development Phase

In the development phase, the tunnel project involved stages of planning, agreements, communication and approval by the state agencies. The phase is one of the most important stages considering the fact that is involved the main activity of the contract. The phase was identified to be one of the difficult stages. Inflexibility was one of the major issues which made the processes in this part difficult where two states had differences in culture. Two companies which were from different settings were using different languages which made it only possible to have two managing directors. Translink is from Britain while Transmanche came from France (Giammalvo, Paul, et al, n.p). Some of the failures which were experienced at this stage acted as the major challenges to completion of the project. There was an enormous scope of the project where a decision to join the two which is France and England had been prior considered but never completed. There were no hopes to have any profitability of the project in the 20th century. The treaty of Canterbury and the stings of the IGC with the theme of coordinating operations, constructions and safety of the Chunnel Tunnel could have led to entire losses in the control of the scope. The team of project members who had been entrusted to complete the job did it in a reasonable way from the planning of the technical equipment’s which could be required and having an understanding of complexities involved. However, there was a mistake in the IGC on the scope which controlled the ability of the organization to have the approval of scope funning which affected the management of the project which made it more difficult.

Management challenges were clearly pointed to be the primary challenges in the developmental phase. The project was completed well with the higher budget which brought about increased claims. Although costs are considered some of the most difficult factors in planning especially to project of this magnitude, there were enough challenges in detailing and planning. The primary project executive at the Eurotunnel in the early 1900s had been initiated. The issue is scheduled planning in the development phase looked to be more adequate. The time of the project completion was altered to one year late after the stipulated period failed to merit. More emphasis on teamwork in the development phase was triggered by the fairness which was followed by the two state governments (Nicholas, John M., and Herman Steyn, n.p). For the British team members, the French had made a matching counterpart. In lure of improving the spirit of team working in the later phases of the project, more emphasis was put on the teamwork for the team members. However, the two governments ran from teamwork when they had no guarantee to have the project financially.

The Implementation Phase

The implementation phase of the tunnel was started in the first months of 1987 with the concessions contract responding to the tunnel. The proposal which won was made under the concept of build own transfer (BOT) system (Giammalvo, Paul, et al, n.p). The company which made the project was supposed to take the assumption of the project with full control from completion to the end of the agreed period which is 55 years. After the expiry of the time period, the contract could be reverted back to the tow government who could acquire full ownership. The contractor was done as a consortium of contraction firms which included joint ventures with the two major firms being winners. There was a normal client-contractor relationship which was created in the process where both indirect and direct investors were involved. The stage was affected by massive politics which were started almost immediately after the start of the process (Giammalvo, Paul, et al, n.p). Design and construction were happening at the same time due to massive politics process. In the process of the first tracing, the process of overlapping construction and design with the hopes of making it short more time for a risky delivery time was witnessed. Using this kind of technology which was somehow new proved to be risky and lacking enough competence.

Challenges in this stage

1. Rolling of the stock was not designed in the prior stages.

2. There was no setting aside funds or measures for contingencies.

3. The rolling stock from the two countries was not the same.

Question 7: The Closeout Stage and Reflection on Team Work

The closeout phase there was no expectation of gaining significant grounds for primary areas of the project management. The amount set aside for risk mitigation and claims proved that even the properly made attempts in managing important factors in the project could not bear significant effects on the entire outcomes. The entire scope of the project had risen from the recognizable changes requests over the whole project. Even at the end of the project, the needs for air conditioning systems for the project had been representative of scope modifications (Giammalvo, Paul, et al, n.p). It was clear that the management and the schedule had a good representation of the challenges which were witnessed during the project continuation. The management of the project was doing all they could to make sure the losses were reduced and could not negotiate for any idea of the act which was presumed to bring losses to the project. The ideology of win-win agreements were all clearly away from the minds of the parties which had interests in the work (Giammalvo, Paul, et al, n.p). Teamwork was a focus at the closeout stage which every team seeking to end well and develop interests rather than functioning towards acceptable solutions (Pireddu, Nicoletta, 640).

The parties which were involved in the project looked to have the will to share the success of the project primarily on the public relations perspectives. The primary quality of the project was to be weighed at the closeout stage which showed impressive strides. The final tunnel could recognize as an engineering foot which could be more complex with immense challenges to success. One of the major impacts of the project could not show improvement until the late delivery stage on the ROI (Giammalvo, Paul, et al, n.p). The first costs models had important details on the expected returns which was based on the utilization of the tunnel with the assumption that the tunnel could be completed on time. The delay in delivery and other impacts at the beginning of the operations could mean that the parties owning the tunnel could be faced with several litigations on items and lack of sources of income from different operations of the tunnels.

The shareholders of the project could not be accepted to have their returns from investments taking longer than expected. From the management of project viewpoints, there have been several factors which were beyond the control of different project team which led to such situations. Parties in the project and bankers had made deviational tactics on different methods in the management of projects, shooting themselves in the foot and had set some situations which were important not only to the projects but on a similar note to the public view of this project (Giammalvo, Paul, et al, n.p). From the management of projects, the closeout stage was a well-done phase being an example of why effective changes in management could be taken in place. The capacity of any party to have demands for alterations in the design of the deliverable with no corresponding funding in making this changes for a perfect project setup in the results which were challenged.

Conclusion

Tunnel project was one of the most impressive projects which have been done in the whole world. It was a show of might of how two different countries could work together to bring a successful project. France and Britain realized their problem in the trade which made them develop the system of working together. The work was done as a team which makes it important to have team works in different contracts. The two countries came up with companies from either side which worked towards a common goal. Although there was a language barrier in the project the team worked extra had towards the design and came up with a common success project. The success of any project is determined by the four important stages as it has been done in the Tunnel project. The first phase is the inception where planning is done, the second phase is the developmental phase where design is conceptualised, the third phase is an implementation where the project is actualised and the final stage being the closeout stage when the project should be completed and analysed. There is a dire need to have the cost and expenses projects before the start of any project which is later followed by making pro-forma statements and budget. However, in making sure that the projects are carried out smoothly there is a need to include the contingency funds before running a project because accidents and other unexpected costs may be incurred. All this process cannot take place of the team working is not taken into consideration at all times. In some project contracts, there is a need to have open structures where the cost of the project could be reviewed with time if the contingencies increase to help reduce the chances of reducing the quality of work to curb the increased cost of contingencies.

Question 8: Lessons Learnt from the Project

The view and idea of factors projected to affect the cost of good and inputs could include foreign currency changes and cost of inflation. Communication is very important in any project where all things are projected to run smoothly if team spirit is enhanced. Although some communication from different people could be halted by different languages of communication there are chances of having communication which is only professional to communicate the project theme and functionality. The success of the project could be simply attributed to teamwork proper estimation of the budget and costs of the project. Although estimates are used in projects the estimated figures should be done in a professional way which should represent the close entries of what will happen in as the project continues. Everyone’s effort is recognized in the project which makes it possible for accountants, engineers, contractors, valuers to work together as a team. There is no need to think of the success of a project with one profession as some attributes would not be taken into consideration. The Chunnel Tunnel was considered a project which looked not to succeed but after its completion, there was all need to raise praises and appreciate the efforts. The two companies which engineered the project were to have an improved project of a global class. There have been chances when companies have been failing to work together for a common goal which has made it hard for projects to be completed.

Works Cited

Besanko, David, Christopher Stori, and Ed Kalletta. “Eurotunnel versus the Ferries.” Kellogg School of Management Cases (2017): 1-17.

Cross, Barry L., and M. Kathryn Brohman. Project Leadership: Creating Value with an Adaptive Project Organization. CRC Press, 2014.

Giammalvo, Paul, et al. ”The Chunnel Project.” Project Management Institute, 2005.

Goldsmith, Hugh, and Patrick Boeuf. ”The Chunnel in History: breakthrough or continuity?.” (2016).

Nicholas, John M., and Herman Steyn. Project management for engineering, business and technology. Taylor & Francis, 2017.

Pireddu, Nicoletta. ”Europe at the End of the Chunnel: Malcolm Bradbury’s and Tim Parks’s Eurosceptic Albion.” English Studies 98.6 (2017): 624-648.