THE CHUNNEL TUNNEL

PROJECT
(A Case Study)

The Close out Phase

 The Chunnel Tunnel Project
INTRODUCTION

 51.5 KM under sea double rail linking France and England.

 Largest construction project built by a private consortium, involving French & British
Government

 Loan financing raised through a consortium of 206 banks.

MAJOR CHALLENGES
• Cooperation of two national governments
• Bankers underwriting the funding for the project
• Numerous Contractors
• Several regulatory agencies
• Overlapping design and construction
• Under ground construction
 The Chunnel Tunnel Project
COMPLEXITY

 Unwillingness of English to invest public money resulted in getting money from

private investors without any governmental intervention or guarantees.
Resulting very little regulation on the fares charged for the whole
concession of 55yrs

 Introduction of Intergovernmental commission (IGC) to regulate environmental,

health, safety aspect.

 Loan financing raised through consortium of 206 banks world wide, making
refinancing complex.

 Open/ undefined scope of project.

 Integration, coordination , communication of diverse and numerous parties

involved.
 Close out Phase

Project Management Area Close Out Phase –

Assigned Ratings
Scope Management 1.5
Time Management 4
Cost Management 1
Quality Management 4
Human Resource Management 2
Communication Management 2

Risk Management 2
Procurement Management 1
Integration Management 2
 The Chunnel Tunnel Project
WEEKNESS :

 Overall scope of the project was still not fixed, even at the proposed
completion. The project was even rushed to allow operation to begin
before the entire effort was completed.
 Lack of detail designing in initial stages.
 Focus during the closeout was on attempting to minimize the amount of
claim awarded rather than analyzing the causes of cost overruns.
 The ability to make demands for changes (IGC) in the design of the
deliverable without corresponding funding for those changes provides a
perfect setup for challenged results.
 Poor Contract Management (fixed rate contracts)
 No contingency to cover unknowns.
 Structure of Consortium.
 Communication in later stages of project.
 Over managing risk.
 Poor Change control method
 The Chunnel Tunnel Project

STRENGTHS:

 Quality Management
 Communication in initial stage
 Progress Monitoring
 Planning and scheduling to a large extent.
 Exemplary Team work in patches.
 State of the art precise engineering.
 The Chunnel Tunnel Project
RESULT

 Bid price US$5.5 Billion, eventual cost staggering US$14.9 Billion

 19 month delay .

 Benchmark quality
 The Chunnel Tunnel Project
Success or failure ?

Engineering perspective:
The project was undoubtedly a success as most of the technical problems which
subsequently aroused were associated with regulatory changes.

Customer perspective:
The project could be viewed as a success. The customers also got a new chance of
services from the shuttles at lower prices

Economists perspective:
The project may not be a success. Huge resources have been wasted providing the
expensive piece of infrastructure which provides only a marginal quality of service
advantage