Question: You must carry out a critical evaluation of the Channel Tunnel project, focusing on the way it was planned and executed. Following your analysis and critique of the project, the final section should give recommendations as to how the project could have been improved. (3,000 words).
Opened on the 6th May 1994 the “Channel Tunnel” (CT) or “Chunnel” - as it is sometimes
known, is an ambitious project linking Folkestone, UK to Calais, France by rail. Consisting
of three 50km long tunnels the CT is the longest undersea tunnel in the world, crossing the
English channel with 38km of the tunnel underwater. (On this day, BBC News)
In order to critically evaluate the CT project is essential to understand what project
management is and what it consists of, the way that the project was planned and
executed and how this fits in with project management theory.
The project management institute defines a project as “a temporary endeavour undertaken
to create a unique product or service.” (Pinto, J. 2009: page 24), (Project Management
Institute, 2011). (Pinto, J. 2009: page 25) goes on to state that “projects are goal
orientated, involve the coordinated undertaking of interrelated activities, and are all, to a
degree, unique.”
In my opinion, Pinto's project management definition fits in well with the CT project. The
CT project was indeed a “temporary endeavour” undertaken to provide the service of a
crossing between the two countries. The CT project was also “unique” as the largest
underwater crossing, “goal orientated” as it involved the overall goal of a channel crossing
and as the process will make clear “involved the coordinated undertaking of interrelated
activities” to complete the project. This leaves me in no doubt that the CT is a project
under Pinto's definition.
Before the current CT project began there was a long history of proposals to link
Britain and France. The first proposal for a underground channel crossing came from as far back as 1802. Albert Mathieu a military engineer proposed a single tunnel with an intermediate artificial staging post halfway across the route on the Verne sandbank. The above ground staging post would contain its own city and the route would be lit by oil lamps for the horse drawn carriages that would cross it. (History of the Channel Tunnel, Channel Tunnel). However,
this proposal was never implemented.
During the 1800's several more attempts were made to design and build a channel
crossing. Most notably in 1867 by Thome de Gammond. De Gammond's plan was
simmiliar to the 1802 plan with a staging post on the Verne sandbank, however, instead of
horse drawn carriages there would be a “huge open shaft with a railway line spiralling
down its perimeter” (History of the Channel Tunnel, Channel Tunnel). Like the 1802
proposal this scheme was also never realised.
In 1981 the British and French governments came together and agreed to set up a working
group to explore the option of a privately funded CT project. In 1985 promoters were
encouraged to submit schemes for a CT to the two governments. Four schemes were
formally submitted, these were: a CT group/France-Manche rail proposal based on a 1975
scheme, a 2.8 mile suspension bridge by Eurobridge, a 13mile tunnel between artificial
islands and the Channel Expressway proposal which consisted of large diameter road
tunnels with mid channel ventilation towers. (History of the Channel Tunnel, Channel
Tunnel). The CT group/ France-Manche project was chosen.
The CT/France-Manche group consisted of two companies - the Channel Tunnel Group
(CTG), a British company, and France – Manche (FM), a French company. (The two
companies who won the joint bid for the project). Therefore, sharing out the project
between the two nations perhaps to their advantage so that it could be claimed that not
one single nation say that the CT was “theirs”.
The UK CTG involved two banks and five construction companies, while French FM
involved three banks and five construction companies. The winning CTG/FM project was
based on a 1975 CT scheme, consisting of a 32 mile twin rail tunnel to accommodate
north and sound bound trains in either tunnel, it also included a central smaller tunnel for
shuttle cars to be used to transport staff for maintenance purposes and to be used in
emergency situations. (Wilson, J. 1994).
The potential benefits to creating a permanent transportation connection were viewed as
numerous by the two governments involved. Both parties hoped the CT would create economic
growth in Britain and France, provide new jobs, increase trade between the nations,
provide an alternative to other modes of crossing the English channel e.g. planes and
ferry's, relieving capacity on these modes of transport. They also hope it would allow their
citizens to travel with speed and comfort across the channel in an unprecedented way.
* * * * *
The starting point of all projects is to define its overall objective – in other words, what do
we want to achieve by doing this project? When the overall objective is decided it is
important to refer back to the objective frequently during the project, making sure it is
being met. It is also critical that all of the elements in the project scope reflects the overall
project objective.
Although I was unable to find a stated overall objective for the CT project, personally I would simply define the overall objective of the CT project as:
“Creating a permanent cross-channel transportation connection between the nations of
Britain and France.”
I think that this objective broadly sums up what all parties were aiming to achieve by the end of the project. Once the project had established its overall objective it then moved on to project
scope.
Project scope describes everything about a project, it is a complete overview. Project scope is also a useful guide to refer back to during the project to make sure aims and objectives are being met. According to (Larson, E. Gray, C. 2010) “poorly defined scope is the most frequently cited barrier to project success.” It is therefore important to every project that the project scope is clear and well defined.
It is sometimes useful to create a project scope checklist listing all the key areas of the
project scope. This can include: project deliverable, milestones, technical requirements,
limits and exclusions and a review between the parties involved. The project scope for the
CT tunnel project would have included many of these as well as other elements such as:
project finance, risk management and stakeholder management.
A key part of the project scope is defining the deliverables. In other words, the major
outputs of the project. This is a good way of assessing performance during the project,
with clear targets to meet. In the case of the CT project deliverables may have been that
the budget was on course to meet initial estimates – this could have been monitored at
several stages during the project, that work was completed on time and that stages of the
project were performed when they were initially planned to be.
As one of the largest privately funded construction projects it was important that the CT
project was well organised. Therefore it was important to have a clear and well defined
project scope that translated the overall objective of the project into actions.
When analysing each stage of the channel tunnel project it also useful to analyse them in the
context of the project life cycle. The project life cycle consists of four stages -
conceptualisation, planning, execution and termination (Pinto, pg.32, 2010).
Conceptualization involves the initial goals and objectives and the technical specifications
for the project, planning is where more detailed project specifications are put in place and
plans and schedules for the project are developed, execution is when the work of the
project is actually performed and termination is the scheduled end to the project, the
project is closed down and evaluated.
I have already discussed the Conceptualisation stage of the CT project (goals and
objective). The Planning stage will also have incorporated Project Scope, as this includes
everything about the project the planning stage would have resulted in the creation of the
project scope.
It was decided the design and construction of the CT project would be done by ten
companies (five French and five British) in total within the CTG/FM group. The French
terminal and boring from the French side would be done by five French construction
companies in the group “GIE Transmanche Construction” and likewise the English terminal
and boring from the UK would be done by five British construction companies in the
“Trankslink Joint Venture Group”. “Eurotunnel” would run the CT following its construction
and operate trains. Its would be independent from both UK and French governments but
accountable to both. (Wilson, J. 1994).
The two groups of construction companies would then be overseen by one transnational
body – The TransManche Link. A supervisory engineering group was also put in place to
monitor the project and report its findings to each government and project finances.
Another important part of the planning stage of the CT project was financing. Both parties
Britain and France were keen to keep costs of the CT project as low as possible both by
having the project privately funded as well as ensuring careful management throughout.
However, for such a complex infrastructure project using private funding was unprecedented, so the strategy was risky.
The final total investment costs at 1985 prices were £2.6 billion. £345 million of this came
from initial equity raised by CTG/FM, £206 million from private industrial placement, £770
million from a public share offer including TV advertisements. A syndicated bank loan and
letter credit made a further £5 billion of credit available. (Wilson, J. 1994)
Both governments agreed on a 55 year operating concession to repay these loans. And a
railway usage agreement was signed between Eurotunnel, British Rail and its French
equivalent that Eurotunnel would set prices and be guaranteed revenue from the tunnel on
the guarantee that it could run the CT by at least half capacity.
* * * * *
When deciding upon the stages of the project it is important to consider the project
milestones. Milestones are significant events that occur at a particular point in time in the
project, they are used to assess a project's progress. Milestones usually mark the stages of
a project, in most cases nothing further can be done in a project until specific milestones
are reached. (Pinto, J. 2009)
In my opinion, the key milestones for the CT project are: choosing the initial scheme,
starting the planning stage, both governments signing the channel tunnel treaty, the start
of the project, the two sides of boring machines meeting in the middle, the completion of
the tunnel and finally, the opening of the tunnel to the public.
Stakeholder management is an important part of the CT project (and all projects). It is
crucial to the success of the project that all stakeholders are taken into account and there
concerns and potential impact on the project taken into account. Project stakeholders are
defined by (Pinto, J. 2009: page 57) as “all individuals or groups who have an active stake
in the project and can potentially impact either positively or negatively, its development.”
Stakeholders are commonly broken down into two groups – internal and external. In this
project internal stakeholders could be defined as those involved directly with the CT
project. This includes the two national governments, banks and institutions funding the
project, the 10 transnational (five British, five French) contractors involved in the building
and engineering of the CT (The TransManche Link), the regulatory agencies monitoring
the project and Eurotunnel.
External stakeholders could be defined as those not directly involved with the project but still affected by the project. External stakeholders include: The general public in the UK, potential CT customers who would like to use the CT service and local residents to the project. There may be some stakeholders who are both internal and external.
Stakeholders typically have differing interests and concerns and can have different
impacts on a project. Therefore, it is important to the success of the project that all
stakeholders, both internal and external are managed effectively. Block (Pinto, J. 2009:
page 60) suggest six steps to do this: 1. assess the environment , 2. identify the goals of
the principal actors and act accordingly, 3. assess your own capabilities, 4. define the
problem, 5. develop solutions, 6. test and refine the solutions.
It is also crucial to have a risk management strategy in place from the outset in order to
minimize the impact of problems and complications during the project (included in the
project scope). (Pinto, J. 2009: page 224) Identifies a four stage process to risk
management. This includes: 1. risk identification, 2. analysis of probability of
consequences, 3. risk mitigation strategies and finally 4. control and documentation.
In the case of the CT project the key risks were: the project finances exceeding the initial
£2.6 billion budgeted, problems with the tunnelling itself and the rock through which was
being bored (chalk marl) not being satisfactory enough to contain the CT tunnels, the
project itself running over time causing loss of passenger revenue and extra costs, poor
cooperation between organisations involved in the CT project and the two nations involved
(UK and France).
Using Pinto's four stage risk management process the following three stages (analysis and
probability of consequences, risk mitigation strategy and control and documentation) these
could have then been applied to the risks I identified above to better mitigate against
problems within the project.
The completed CT aimed to provide three different transport services: Eurotunnel Shuttle –
a roll on and off shuttle train for cars, passenger trains also run by Eurostar and fright
trains for the shipment of goods. Additionally, it was projected that 15.9 million passenger
would use the service (in the first year and then increasing). (Eurotunnel, 2011). The
financial and technical planning for the project would have reflected this figure.
Once a clear project scope including detailed planning and financing had been put in place
for the CT project both UK and French governments gave formal permission to begin work.
In 1987 after a public inquiry the French senate formally approved the project and in the
UK the channel tunnel bill passed the house of commons and lords, gaining royal assent
and becoming law. On the project life cycle this is known as the “execution” stage of the
project.
In 1988, working from both UK and French sides of the CT eleven boring machines cut
through chalk marl under the sea bed (approximately 38km of the 50km CT is underwater).
Construction also began on the Cheriton (Folkestone) terminal and the Calais terminal in
France. In December 1990 a significant moment came when the UK and French sides of
the CT met. and by May 1994 the CT was officially opened by French President François
Mitterrand and Queen Elizabeth II. The public Eurostar service began a few months after
the opening. (Wilson, J. 1994), (The Guardian, 2009).
During the termination stage of the project all CTG/FM contractors left the site, the CT was
then passed on to Eurostar (as previously agreed) and opened to the public just a few
months after the official opening. The project was then formally complete, although
improvements on the CT still take place to this day.
* * * * *
Despite the apparent success to some of the CT there are many criticisms that can be
made of the project from a project management perspective.
Firstly, despite the initial planned cost of £2.6 billion by the CT completion in 1994 total
costs came to £4.65 billion, 80% more than originally planned. If those involved in the CT
project had been more effective during the planning stage they may have been to keep to
the original budget or perhaps decided on a higher initial budget which would have been
more appropriate for this project.
In my opinion there are many different project management techniques that could have been used to prevent the project going over budget. For example, if project budget had been used as a deliverable (within the project scope) across different stages of the project it would have been clear at many stages of the project that it was going over budget and this could then have been managed more effectively. (Bent, F. et al, 2003).
Secondly, the project finished later than originally planned – the official opening was one
year later than planned. Although this project wasn't drastically over schedule by sticking
to well defined milestones (such as the ones mentioned previously) and monitoring the
project from these points the project may have come in on time. The advantage of
identifying clearly defined milestones at the start of the project is that you can then assess
the project by these milestones based on where the project is at compared to where you
expected it to be.
Another criticisms I have of the project was the lack of planning and foresight with regard
to passenger numbers. At the outset of the project 15.9 million passengers were predicted
to use the service (in the first year and then increasing thereafter). In fact in 1995 (the first
year of operation) only an estimated 2.9 million used the service, this grew to 6.3 million in
2003. (Eurotunnel, 2011). Still far below the initial projections. This over estimation of
passenger numbers will have had a significant impact on the project, particularly the
amount of revenue raised by Eurostar and the capacity agreements (more than 50%)
signed at the start of the project. If the planners had used a broader project scope they
may have been able to predict a more accurate figure and might have also been able to
plan better financially for lower than expected passenger numbers.
Another criticism I have of the the project is that it is less financially viable than originally
planned. Due to the lack of revenue from lower than expected passenger numbers
Eurotunnel posted a loss of almost £923m in 1995 not breaking into profit into 2008. In
1997 British and French governments had to extend Eurotunnels operating concession by
34years from 2052 to 2086 due to the lack of revenue and risk of bankruptcy to the project.
With better financial planning and more emphasis on risk management within the project
this situation may have been prevented. Either by scaling down the size of the project or
increasing the loan period from the outset to meet the low revenue in the early years of the
Channel Tunnels opening.
Additionally, if an effective risk management strategy (as mentioned earlier) such as
Pinto's four stage process had been applied in the case of the CT project these risks could
have been mitigated more effectively and perhaps prevented. Similarly, stakeholders could
have been better defined, understood and planned for in this project (using Block's six
steps to managing stakeholders, Pinto, 2010). Particularly stakeholders such as potential
passengers, who did not use the channel tunnel in numbers as high as was expected.
In Conclusion, when planning a project of a simmiliar nature to the channel tunnel it would
be advisable to take into account more project management theories (such as stakeholder
and risk management theories) within a more detailed and longer project scope (planning
stage) to better protect the project against potential risks such as delays, finances, etc.
However, In my opinion I do think the Channel Tunnel was still a relatively successful project given its unprecedented nature.
3,149 words
REFERENCES
On this day, BBC News.
http://news.bbc.co.uk/onthisday/hi/dates/stories/may/6/newsid_2511000/2511653.stm
[no date]
Powerful machines readied for channel tunnel, (1987) The New York Times.
http://www.nytimes.com/1987/10/06/science/powerful-machines-readied-for-channeltunnel.
html?src=pm
[6th October 1987]
Larson, E. Gray, C. (2010) Project Management: The Managerial Process. 1st Ed.
McGraw-Hill.
Maylor, H. (2010) Project Management, 4th Ed. Prentice Hall.
the channel tunnel infrastructure, euro tunnel.
http://www.eurotunnelgroup.com/uk/the-channel-tunnel/infrastructure/
[no date]
Early Channel Tunnel Schemes, Rail album.
http://www.railalbum.co.uk/articles/chunnel.htm
[no date]
Wilson, J. Spick, J (1994). Eurotunnel - The Illustrated Journey. HarperCollins.
History of the Channel Tunnel, Channel Tunnel
http://www.channeltunnel.org.uk/history.htm
[no date]
Pinto, J. (2009) Project Management – achieving competitive advantage. 2nd Ed. Pearson.
Project Management Institute (2011) [online] www.pmi.org/
Eurotunnel – 22 years of History, (2009), The Guardian [online]
http://www.guardian.co.uk/business/gallery/2009/mar/04/transport-channeltunnel#/?
picture=344137186&index=1
[4th March 2009]
Bent, F. et al (2003) Megaprojects and Risk. 1st edition. Cambridge University Press.
Press Release, (2011), Eurotunnel.
http://www.eurotunnelgroup.com/uploadedFiles/assets-uk/Media/Press-Releases/2011-
Press-Releases/110118Eurotunnel-traffic-and-revenue.pdf
[18th January 2011].
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