The Chunnel - Project Management Retrosp PDF

The Channel Tunnel:
A Project Management
Perspective
Delivered by:
Naveen Srivatsav
Jacob Joys
Zilin Wang
Karim Safty and,
Rishabh Kapoor
EPA1412 Project Management Group 4

Table of Contents
Introduction 4
Research Methodology 6
Scope of Student Project 6
Literature Review 7
Rationale of Analysis 8
Quality Control 8
Inception & Design 9
History 9
Actual Proposal 9
Cost-benefit Analysis 10
Scope of the Channel Tunnel Project 11
Treaty of Canterbury & IGC 11
Initial Contract 12
Project organization 12
Financing the Channel Tunnel 13
System Definition 14
Initial Risk Analysis 15

Nanyang Technological University
Discussion 16
Construction of the Channel Tunnel 19
Planning and Management 19
Organizational Changes 21
Issues during Construction 27
Construction Delays 27
Tunnel Excavation 28
Air Conditioning System 29
Fire Protection System 30
Actual Costs of Construction 31
Legal disputes and conflicts 32
Discussion 33
Closeout and Commissioning 36
Operations 37
Discussion & Conclusion 39
References 41
Appendix 43
Name of report 3
Introduction
The Channel Tunnel is a monumental underground connection that links the mainlands of the
United Kingdom and France. Two high-speed rail tunnels and one service tunnel, spanning
more than 50 km, link one terminal at Folkestone, UK and another in Coquelles, France.
Tunneled within a layer of chalk marl under the English Channel, it now transports about 15
million people yearly.
From a project management perspective, the construction was spearheaded by two

governments and completed by two national construction teams on each side. The Chunnel
was also privately funded, which is rare for large-scale public infrastructure projects. Finally,
the scale and complexity of the project called for new techniques and technology. These
efforts resulted in the successful completion of the Channel Tunnel, making it an interesting
case to study. However, there were significant delays and cost overruns exceeding 80% of
the initial budget. So the question is: was the Channel Tunnel a successful project? This is the
research question of this report.
This report aims to analyse the Channel Tunnel from a project management perspective,
which will henceforth be referred to as “target project”. Project management is a significant
endeavor, and a project of this magnitude even more so. Not only was the scale
unprecedented, there were diverse factors ranging from political to technical, that influenced
the Channel Tunnel construction in different ways. This report will detail the most significant
issues that arose during the course of the target project. A secondary objective of this report
is also to highlight the research methodology undertaken to compile this report. As such,
future efforts to extend this work would be facilitated. The research effort to compile the
report is then referred to as the “student project”.

The Channel Tunnel: A Project Management Perspective
The report is loosely structured around the traditional project phases: namely Inception,
Definition, Implementation and Closeout & Operations phases. The Inception phase
discusses the history of the target project, its main goals and the procedures that resulted in
the choice of the Channel Tunnel as the solution. The Definition phase details the
organization, planning, design and initial contract. The Implementation phase addresses both
technical and management issues that arose during the course of the actual construction
work. At this juncture, it must be noted that the Chunnel project was sufficiently huge that
sub-projects from different phases had independent timelines that occasionally overlapped.
As such, there was no clear chronological demarcation of Definition and Implementation
phases especially. And finally, the Closeout and Operations phase describes the post-
construction performance of the Tunnel.
Overall, this report aims to be open-ended and neutral. While it is easy to identify the good
and bad outcomes and trace their causes, the crux of this report is not just to report the
success and failures of the project. In contrast, this report treats the Channel Tunnel project
as an ideal case study for international infrastructure development projects, from which many
valuable lessons can be learned. These best practices can be implemented in future projects.
5
Research Methodology
Scope of Student Project

The scope of the student project was defined as the research, analysis and evaluation of the
Channel Tunnel project. In particular, the team focused its performance in key project
management areas. The overall study was researched and loosely compiled with the
following outline:
a. Introduction to the Channel Tunnel

This section was to introduce the key reasons for picking the Chunnel Project. These reasons
were its intergovernmental initiative, private funding, complex administrative issues and
budget/time overhauls.
b. Research Methodology
To make the research reproducible, this section was organized to present the planning
skeleton. Moreover, the research process was described in brief.
c. Conception Phase
This section starts with detailing why the Channel Tunnel in its present form was needed. The
timeline was compiled from secondary data sources, along with the other proposals. Also,
feasibility and optimization studies were also discussed.
d. The Definition Phase

This research area explored the stakeholders of the Chunnel Project, including the British &

French government, financial and commercial parties. The scope of the project was defined.
The initial contract and winning contractor were described in detail.
e. The Execution Phase

The techniques which formed the backbone of the Chunnel Tunnel were discussed. The
different work allocations were detailed. The technical issues which caused reasonable
deviations from initial plans are also discussed in this section.
Being an intergovernmental project, a part of this section was dedicated to understanding the
political and management issues faced during the project. Possible bureaucratic issues
between the governmental supervisory committee and the management were prominently
highlighted. Finally, a brief discussion of the high-level risk analysis from a managerial
perspective were discussed.
f. The Closeout & Operations Phase

This research section detailed the end of the construction and issues that followed shortly
after. Since the Channel Tunnel contract was a Build-Own-Operate-Transfer contract, the
performance and maintenance of the Tunnel since completion have also been compiled.
g. Discussion & Recommendations

Here the overall achievements and lessons from the project management perspective were
highlighted. Analysis of efficiencies in time, cost, quality and scope have been evaluated. This
helped to frame the overall success of the project.
The technical and financial details of the project were not used as performance indicators in
this report. Instead, the analysis is strictly to identify best practices for future projects, treating
the Channel Tunnel as a case study.
Literature Review
The literature review was conducted for this student project with an initial preference for
primary sources. The team was unable to find these original documents. However, there were
a series of self-evaluation reports published by various personnel involved in the Channel
Tunnel project. These were moderately helpful.
7
Through secondary sources, there was sufficient content to report and analyse. However,
some of these secondary sources were entirely technical, focusing on specific engineering
problems. These purely technical issues were not the priority in this report.
However, the financial and technical reports were skimmed for valuable insights to
correspond technical details to project management issues.
Rationale of Analysis
This student project was dedicated to the analysis and evaluation of the target project. As
mentioned earlier, the team treated the Channel Tunnel project as a reference case study.
This was because Chunnel was a unique project, both technically and administratively for
various reasons. It would be easy now to overlook the high pressure and workload faced by
the engineers and managers. As such, the decision was to made to treat the report as an
opportunity to identify best practices for international large-scale infrastructure. In this
analysis, technical details were de-emphasized to understand the bigger picture of project
management.
Quality Control
From a project management perspective, each team member had a responsibility for quality.
The quality management of the student project was handled at two levels. One was internal,
and the other external. Internal peer review was conducted by circulating each other’s work
for review. This also ensured all team members had a good grasp on all aspects of the report.
A broader quality control had been offered through inter-group peer reviews. This was done
on an interim report as well as the final draft, and many helpful suggestions were exchanged.
8
Inception & Design
Human history is full of ambitious undertakings. Unfortunately, many of the details of these
achievements have been lost in time. The Channel Tunnel however is a recent construction,
and is hailed as a major engineering achievement. To mark this feat, in 1994, this tunnel had
been included as one of the Seven (New) Wonders of the World.
History
The history of the Channel Tunnel began more than a few centuries ago. The two nations
(Britain and France) stood to gain much economic benefit through a linkage of their
mainlands. The earliest recorded attempt to do so began in 1802, and moved through
different stages of development. However, all efforts had been stopped due to political
differences between the British and French rulership at the time. Similarly, other efforts in the
following decades were prematurely stopped due to political reasons as well. The idea
endured, and came closest to realisation in the years shortly before WWII. However, the fear
of impending war stopped these plans as well.
Actual Proposal
After 182 years of deliberating, the two governments finally came to an agreement in 1984.
Even then, there were environmental and security concerns. But both parties agreed that the
greater economic benefit was worth the effort.
When the project was put up for bidding, four proposals were shortlisted. (See Appendix for
more details.) These were namely:

Channel Tunnel: a rail proposal based on the 1975 scheme presented by Channel Tunnel Group/
France–Manche (CTG/F–M).
Eurobridge: a 4.5 km span suspension bridge with a roadway in an enclosed tube
Euroroute: a 21 km tunnel between artificial islands connected by bridges and,
Channel Expressway: large diameter road tunnels with mid-channel ventilation towers.
In the end, the proposal by the Chunnel Tunnel Group/France Manche (CTG/FM, later to
become Eurotunnel) was chosen. This proposal included a 51.5 km double-rail tunnel (with
an additional service tunnel). The Channel Tunnel was to accommodate both through-trains
and special shuttle trains for transporting road vehicles. The initial bid price was US$5.5
billion.
Also, the two governments wanted the project to be completely privately funded. This was
essentially a risk-averse strategy, helping to reserve government funds. Financing thus came
from equity and loan capital markets. Since equity interest was becoming popular in both
France and UK, and the project found good financing including more than 200 banks.
From a project management perspective, there was a direct correlation between scope
definition and cost estimates. Normally for large-scale projects, there are challenges with
initial estimates, scope management, and the contract type. Thus, lack of defined scope
made resource planning, cost estimating, and budgeting difficult. In addition, return-on
investment (ROI) assumptions made in the planning stages were not accurate (as usual).
Given that the original cost estimate had eventually increased to US$14.9 billion, there were
clearly some outstanding issues in this aspect. However, the scale and complexity of the
Channel Tunnel were unprecedented, partially explaining these errors in estimations.
Cost-benefit Analysis
Firstly the cost had been compared with the status quo of not constructing a linkage and
instead building two additional ferries, each of which would cost US$168.3 million.
Furthermore, calculations were made to see whether it would be cheaper for passengers to
drive, or take the existing ferries. Other factors such as travel and transfer times, were also
taken into account.
The Tunnel project required much more capital than the option of purchasing two more
ferries. However, the marginal costs were higher for the ferries in the long run. Also, the return
10
profit was much higher for the Tunnel, since there were plans to have tolls as well as revenues
from billboard advertising.
Unfortunately, the team could not find any detailed breakdown of the figures estimated in the
original cost-benefit analysis. However, this data would have been complementary, but not
essential to the analysis done in this report.
Scope of the Channel Tunnel Project

The most important use of the Tunnel was to be a transportation linkage connecting France
(i.e. the European mainland) and the United Kingdom (UK). The expectation was that this
would not only spur economic development, as well as provide an alternative high-speed
transportation modality.
Following the choice of the Channel Tunnel proposal, the scope of the project was defined as
a linkage to connect transportation networks of France and the UK. Two terminals on either
mainland were to be linked by two 50.5 km-long tunnels (and one service tunnel), built with
high technical standards.
Treaty of Canterbury & IGC

The Treaty of Canterbury was signed by British Prime Minister Margaret Thatcher and French
President François Mitterrand on 12 February 1986 in Canterbury Cathedral. The Treaty
described the construction and operation of the Chunnel by private organizations. According
to the Treaty, the Intergovernmental Commission (IGC) was set up. It was responsible for
monitoring all matters pertaining to the construction and operation of the Tunnel. The
Concession Agreement was signed on 14 March 1986 following the Treaty of Canterbury.
The French and the British governments finally signed the Concession Agreement. This
entrusted France Manche and the Channel Tunnel Group for a period of 55 years with the
design, financing, construction and operation of the Channel Tunnel. The Concession was
later extended to 2086. It also included specific details regarding the purchase of land,
insurance obligations and exercise of the right of substitution.
The Intergovernmental Commission (IGC) was a health and safety commission which was set
up on behalf of both governments to supervise construction and operation of the Channel
Tunnel. It was given considerable power over making important decisions and demanding
11
changes wherever necessary. The IGC was primarily concerned with the design and delivery
of objectives which were relevant to the Chunnel Concession.
Initial Contract
CTG/FM, who won the bid to work on the Channel Tunnel proposal, reorganised and
branded itself with the new name of Eurotunnel on 13 August 1986. Eurotunnel committed
itself to the funding, constructing, operating and maintaining of the Chunnel.
The contract for constructing the Channel Tunnel was then given to TransManche Link (TML)
in 1987 in which the following three cost categories were specified:
1. Target cost for tunneling, done on a cost-plus-fixed-fee (CPFF) basis, with a target cost above or
below which there would be a sharing of the difference.
2. Lump sum (FP) for the terminals and the mechanical and electrical works for the tunnel.
3. The procurement contract for rolling stocks and associated major equipment was under a cost-
plus-percentage-fee (CPPF) basis.
(Source?)
The proposal for constructing the tunnel was made under a “build-own-operate-
transfer” (BOOT) arrangement by which the CTG/FM would be allowed to run the project for
a period of 55 years. After this period, the ownership would transfer to the French and British
governments. The construction company, TML, was actually a consortium of companies who
jointly had investments in CTG/FM. As such, in many cases, there were potential conflicts of
interest. The initial cost estimate for the project was around US$4.3 billion and the estimated
completion date was May 15, 1993.
Project organization
For the project, two bodies were established by both parties. On the British side, the Channel
Tunnel Group consisted of two banks and five construction companies (namely, Balfour
Beatty, Costain, Tarmac, Taylor Woodrow, Wimpey), which were in a joint venture company
Translink Joint Venture.
On the French side, the France–Manche was made up by three banks and five construction
companies (Bouygues, Dumez, Société Auxiliaire d'Entreprises, Société générale
d'Entreprises, Spie Batignolles), which were in a joint venture company GIE Transmanche
12
Construction. The two partnerships were linked by TransManche Link (TML), a bi-national
project organisation.
In summary, the organization was initially very centralized, divided into two bi-national
consortiums as shown in the figure below.
Organization Chart of the TML Consortium
The Maître d'Oeuvre was employed as a supervisory engineering body by Eurotunnel under
the terms of the concession. This body monitored project activities and reported back to the
governments and banks. (Kirkland, C.J. (1995). Engineering the Channel Tunnel (pp.10-11).
Great Britain: E & FN SPON) Both joint venture companies would take charge of the
construction sub-projects on the corresponding sides. This kind of arrangement facilitated
the construction since local companies would be more familiar with the geographical and
working conditions. Meanwhile, it would also give rise to problems, such as issues with
proper communication.
Financing the Channel Tunnel

Private funding for such a complex infrastructure project was of unprecedented scale.
According to the Channel Tunnel Treaty, the tunnel would have to be funded completely
through private investors without any help from the government. In return, the investors had
complete power over deciding prices and the government were prohibited from regulating the
prices except in potential monopoly situations.
13
An initial equity of US$68 million was raised by CTG/F-M. The construction of the Channel
Tunnel was estimated to cost around US$5.5 billion. The following table details the
breakdown of the yearly estimate for the year 1987.
Breakdown of Costs Nov 1987 Forecast (US$ million)

Target Works 994
Terminals 335
Fixed Equipment 515
Procurement Items 183
Bonuses -
Project contingency 99
Total Construction costs 2126
Costs breakdown for the year 1987
System Definition
The initial project scope was informed by preliminary technical designs to meet the user
requirements. These technical requirements are listed below.
The Channel Tunnel was to be built under the English Channel comprising two parallel railway
tunnels. A third smaller tunnel would run between these two parallel railway tunnels which
would be used for maintenance, including communication cables, drainage pipes and other
required technicalities.
Several development studies were carried out while designing the tunnel lining to ensure that
all aspects of the system’s operation were considered. In designing the tunnel lining, a total of
18 design development studies were carried out to ensure that no aspect of the system's
operation was overlooked.
The trains running through the Channel Tunnel were to carry cars, buses and trucks as well.
This would help the people to take their personal vehicles on the train without having to drive
through the long underground tunnel. The plan was initially expected to cost US$3.6 billion.
The tunnels were to be constructed with the help of 13,000 engineers, technicians and
workers. The undersea tunnels were to be an average of 50 m below the seabed. The total
14
length of the tunnel was decided to be 51.5 km, of which 37.5 km would be underwater. 84
km of tunnels were constructed on the English side and 69 km on the French side.
Six tunnel boring machines were used on the English side and 5 on the French side to dig the
tunnel. The running tunnels were to have an outer diameter of 8.2 m and an inner diameter of
7.6 m while the service tunnel was designed with an inner diameter of 5 m with an average
distance of 30 m between them. There was to be a single track railway in each of the two
running tunnels and these were to be connected to the Service Tunnel by cross passages at
375 m intervals. The trains could change tunnels through two artificial caverns known as the
English and French Crossovers.
Initial Risk Analysis

In the Definition phase, the usual risks are technology risk, credit risk and bid risk (Risk –
35265574). The impact of these risks are elaborated below.
Technology risk refers to the economic or political viability of the machinery required to
achieve the project goals. In this project, this risk was primarily assumed by the contractor,
Eurotunnel. While there was some technology risk involved in the Channel Tunnel project, this
was mitigated by detailed geological studies of the strata where the Tunnel was to be
constructed. Initial concerns demanded the need for state-of-the-art equipment, which were
expensive and later found to be unnecessary (Source?). The use of the better equipment
resulted in a higher quality of work, providing an unexpected benefit.
Credit risk is measured based on the creditworthiness of the investor. In the case of the
Channel Tunnel, while large-scale infrastructures are usually funded by governments, the
insistence on private funding for this project presented high risk both to investors and
contractors. There were many private investors, each only footing a smaller fraction of the
total estimated cost as per their risk appetite. In fact, many of the main problems with the
Channel Tunnel project could be said to stem from the need to break up the monolithic credit
risk involved. For example, the management, under credit constraint, had to propose lump-
sum contracts, which were unrealistic for this class of projects. This inevitably led to many
claims and litigations towards the end of the project.
There is normally also bid risk, where projects don’t get satisfactory bids despite a reasonable
budget. However, the Channel Tunnel did not suffer this risk because the payoff was
15
monetarily significant for all contractors involved. Moreover, the international visibility of the
Channel Tunnel ensured future business, if successful. As such, there was relatively low bid
risk.
Moreover, the consortium that won the governmental bid for the Eurotunnel consisted on
parent construction companies who “won the bid” to construct the project. In this sense, the
bid risk was again minimized as the same consortium internalized it.
Discussion
The Chunnel Project was an ambitious undertaking, considering the size, breadth and
complexity. As such, the initial phases of the project involved intensive planning and
communications, agreements and bureaucratic approval. The challenges were exacerbated
by the bi-national division of labour and project management. The British side (Translink) and
the French side (Transmanche) had to work separately while working to achieve the same
goal. This led to some of the complications that manifested later in the project.
The scope of the Channel Tunnel project was highly ambitious. Not to mention, the decision
to finance the construction fully from private investments introduced a lot of emphasis on
maximising economic returns, and minimising risk, on top meeting functional requirements.
Due to the nature of the bi-national working arrangement, as well as the binding requirements
of the Treaty of Canterbury (and the IGC), there was significant scope creep throughout the
lifetime of the project. Moreover, the IGC was given a lot of bureaucratic power to oversee the
project, but was exempt from any financial or bureaucratic retribution. This led also to
significant scope creep, on the insistence of the IGC, contributing to the significant time and
cost overruns.
Even though high-level design studies were carried out with their respective rough-order-of-
magnitude estimates, these studies had been under extreme time pressure. As such,
important details like the need for air-conditioning in the tunnel were not designed and cost-
estimated until towards the end of construction, resulting in both delays and significant extra
costs. The other significant changes in the project had happened mostly in the last parts of
its planning. Mostly, these had occurred due to external circumstances irrelevant to the
project specifications itself.
16
According to Colin J. Kirkland, Technical Director of the Eurotunnel from 1985 through 1991:
“When governments announce an intention to have such a huge public utility built, leaving all
the details to be determined in the course of the competition, it is rather like releasing a
mouse at a Christmas party—the reactions of all those affected are unpredictable and
uncoordinated, and everybody believes that he knows what the end result should
be” (Kirkland, 1995).
Most of the problems had been related to the initial planning, according to Mr Kirkland.
Among this, was the pipeline process that had seen the construction team start their work
before the monitoring operation team had assembled any cost of changes. Mr Kirkland had
added, that since the government had seen this as a private project and raised a bid for the
best seller, the project had suffered from very high expectations that weren’t feasible. These
had been promised by the bidder to help him win the bid. Moreover the project had suffered
from the absence of a client to monitor and have a final say in the different parts.
Among political hiccups from the British side, had been the change in government from
Conservatives (more capitalist) to Labour (more leftist). Conservatives were firm believers of
the benefit of free markets. On the other hand, the Labour party, historically, were less keen
on investing tax money in big projects since in their perception it may not return satisfactorily
on investments. This had happened in 1975, around which time the cost of the project
almost doubled. The delay in obtaining re-financing support had happened due to the
ideology of the ruling party in the government. Also, the oil crises due to the Yom Kippur war
and the boycott of the Arab countries providing oil to the west had caused financial instability
that almost led to the cancellation of the project. Luckily, in 1979, the Conservative party
returned to power again. This time however, they awarded the project to a private company
to fund it.
The schedule planning was adequate despite the delay in project construction as these
delays were due to factors beyond the control of the management. For example, the IGC’s
late decision on the width of train doors resulted in a nine month delay. Despite these
complications, the project was kept on track with regular status reports.
The cost overruns at the end of the project led to many claims among contractors and
management. While the scale of the project was understandably difficult to plan for, there
were obvious oversights in the planning and detailing during the definition phase. According
17
to one of the project executives of the Eurotunnel (Fairweather, 1998), one of the main
reasons was that banks that were investing in the project often re-negotiated contracts,
proposing different methods of compensation for different aspects of the project. Also,
contracts were fixed even on incompletely defined sub-projects, leading invariably to claims.
With regards to quality, IGC oversight played a significant role. The prevailing “better of two
methods” approach necessitated the best equipment and techniques, thus minimizing risk.
On the other hand, the over-management of risk contributed slightly to the cost overruns. For
example, the equipment used for drilling was state-of-the-art, but it was discovered later that
less sophisticated machinery could have been used, with the same results.
Teamwork between the bi-national companies was not very encouraging. While the hierarchy
was mirrored (each British team member has a French counterpart), there was little
communication between the two teams until towards the end. The initial high morale
gradually fell. More importantly, the lack of communication during the initial phases led to
differences of opinion in the later stages.
Overall, the project management of the planning and definition phase of the project could
have been better. More time and detail should have been put into the design and planning of
the project, and measures should have been implemented to prevent scope creep. The IGC,
as time would tell, had been given a disproportionate amount of power. The implications of
this would be felt in the later stages of the project.
18
Construction of the
Channel Tunnel
Construction on the Tunnel began in late 1987, and was commissioned as fully operational in
December 1994. The initial concession contract, as mentioned earlier, was a BOOT
arrangement awarded to the newly merged CTG/FM group to operate for 55 years before
signing over the Tunnel to the two national governments.
In turn, CTG/FM awarded the construction contract to TransManche Link (TML), which was in
fact a consortium of construction companies that also had financial ties to CTG/FM. In this
aspect, the ethics of the contract are unclear, and there were possible conflicts of interest
(Chunnel Project PMI Final). The ethics of such contracts should be explored and defined by
a neutral party in future, especially for large-scale projects, so as to minimize any negative
repercussions.
Planning and Management

One of the biggest challenges of the Channel Tunnel Project was bringing together French
and British engineers with different working methods, corporate executives from the ten
collaborating companies under the TML umbrella, and close to 13,000 workers who had to
be trained to various degrees within three years, into a single project team (CHANNEL
TUNNEL PROJECT OVERVIEW).
Initially, the project was in effect executed as two separate projects, one of the French side
and one on the British side. Any cultural differences were avoided, or ignored, as there was
little cross-border communication (Lemley – Lessons learned from the Chunnel). One of the
reasons for the initial lack of co-ordination was due to management’s decision to rightly allow
the French and British engineers to work on their respective sub-projects using methods and

working arrangements most comfortable to them. The alternative of imposing a universal

engineering concept to both teams was rejected, with the assurance that both sides focused
on the quality, safety, cost and functional requirements (among other requirements) to meet or
exceed specifications (Lemley – Lessons Learned from the Chunnel).
As the project evolved, bi-national co-operation and communication necessarily brought

cultural concerns into view – namely in areas such as culture and tradition, government
attitudes, professional practices and legal systems. A sign of good management attitude,
many of these concerns were seen as chances to positively enhance quality and processes
of the construction (Lemley – Lessons From the Chunnel).
Among some issues that came from the need for increased communications was language-
related. Documentation from the sub-projects had to be either translated or be described in
both working languages, important meetings had to be conducted in English or
simultaneously translated (Lemley). Important specifications relating to safety and quality had
to be expressed in culturally sensitive language, while remaining binding and specific
(Lemley).
In the end, clear definition of mutually agreeable working arrangements was instrumental,
particularly in light of the bi-national scale of construction. In retrospect, project management
was handled very well in this aspect.
However, there were some problems during the construction phase. Among other reasons,
some of the blame for project delays and increasing expenses were attributed to the
“monopolistic” power of the TML consortium, who had no competition and therefore no
incentive to perform well after receiving the tender (Risk – Design and Management of the
Chunnel). Furthermore, the high-level agreement that the project must compulsorily be
finished, regardless of delays or cost overruns, similarly gave TML a lot of power. (Risk –
Design and Management of the Chunnel). This lack of control over the contractors, TML in
this case, was a major management failure, and indirectly led to souring relations and many
disputes.
20
Organizational Changes
During the tunneling, fitting-out and the commissioning phases, the structure of the operating
team changed to fit the different tasks. This was aligned with project organizational trends, as
seen below.
Chart detailing typical organizational changes throughout project lifetime
21
As the project evolved into the tunneling phase, the organization got more decentralized. The
project included five directors, two under English supervision and the rest under French
supervision.
Organization Chart of the TML Consortium as of 1988
Later on in the construction phase, the management was unified under one chief executive
and the national divisions were no longer followed. The construction remained divided
between the two countries, but were under the supervision of one construction director. The
chief executive had nine directors under him, including the non-technical departments such
as auditing. A technical advisor was introduced and the engineering directorate was
disbanded.
The organizational evolution continued following the trend presented earlier where the groups
got more dedicated. Indeed, more partial matrixes where more directors are assigned sectors
related to their field.
22
Organizational chart of the TML Consortium as of 1989
However, a communication problem emerged between the distant groups of construction

and transportation systems & engineering, leading to the final re-assembly of the project
organization. In the final stage, the engineering group (and the construction) was abolished.
Project control specialists were introduced for the roles of Tests on Completion Director and
Commercial Directors, among others.
23
Intervention by the IGC
The IGC mandated that where there were differences in the two countries' standards, the
higher of the two should prevail. In theory this was a great idea, but contractors couldn't
easily realize the decisions of IGC. Moreover, that would lead to delays or cost overruns. IGC
could not retreat from the responsibility in these unforeseen affairs. There are two main
reasons for inefficient implementation of IGC’s policies.
First, IGC were always escalating the safety requirements, and costly changes were dictated
to the contractors at every step of the way inefficiently. The approval process went through
too many steps, from TML, then Eurotunnel, then Maitre d'Oeuvre, to IGC finally. IGC
dragged its collective feet until costs for some modifications skyrocketed. One example was
about the pedestrian doors in the passenger car trains. For safety reasons, the IGC decided
to widen the doors from 600mm to 700mm, but the final approvals were not forthcoming. To
keep on schedule, the contractors went ahead. When the IGC finally made the decision, they
had miss the best chance to solve the problems. The cost of the 100mm-change was almost
79 million US dollars with a nine-month delay.(Fariweather, V. (1994) The Channel Tunnel:
Larger than life, and late, Civil Engineering (pp.42-46))
Secondly, the IGC was the authority on construction criteria, whereas lack of the awareness
that someone would pay for the modifications was a huge obstacle. The tunnel concession
gave the IGC “free rein to change physical criteria without providing money to do so.” The
contractors were always complaining that IGC could ask for anything “hiding behind the
concept of the public welfare and safety”, and someone else had to pay for it. One example
was that TML had used seismic design criteria that were used for nuclear power plants in
both countries. In the mid-way of design, IGC decided to increase these by a factor of four,
which was seen as being over-designed. But the contractors had to follow the new criteria.
24
The redesign caused unexpected delays and high costs. (Fariweather, V. (1994) The Channel
Tunnel: Larger than life, and late, Civil Engineering (pp.42-46))
Construction Risks
During construction of large-scale infrastructure, risks include completion risk, construction

delays, and cost overrun risk.
Completion risk refers to the risk of project not being completed for various reasons. In the
Channel Tunnel project, the scope creep and last-minute changes in design specifications
(e.g. shuttle design), resulted in a delay to the end of construction. As this was a typical
BOOT contract, the delay and associated loss in revenue was significant. Moreover, the
associated cost overruns were also significant and financiers were momentarily unwilling to
foot the new costs (Walker, 1995, Risk – 35265574). This led to more delay.
Construction delays refer to technical difficulties. In the target project, there were relatively
few technical issues as state-of-the-art equipment was used. If not for delays from the
management side (e.g. scope creep), there is every indication that the project would have
completed on time.
Cost overrun risk deals with deviation from original estimates for reasons like inflation,
extended specifications, and construction delays. The final estimate for project cost towards
the end was 15 billion USD, which was almost double the initial estimate of 7.4 billion USD.
The financing banks were skeptical whether to invest more money, and threatened to take
over the Tunnel after construction (Walker, 1995, Risk – 35265574). Moreover, the significant
scope creep and management delays resulted in significant claims from the contractors. In
retrospect, this cost overruns risk was badly handled in the Channel Tunnel project and there
are valuable lessons to be learned, to avoid similar incidents in future.
25
Technical Construction Issues
As one of the largest construction projects of 20th century, the Channel Tunnel undoubtedly
remained a marvel of engineering and was selected by American Society of Civil Engineers as
one of the Seven Wonders of the Modern World in 1996. For the perspective of project
construction, the Channel Tunnel was finished pretty well in spite of relatively disordered
management.
The digging of the Channel Tunnel began from both British and French coasts. On the French
side, construction of the Channel Tunnel began at Sangatte on the Nord-Pas de Calais
coastline in 1987. Two TBMs were driven to underground and inland towards the terminal.
Three others were used to excavate the marine rail tunnels and the service tunnel, beneath
the seabed (http://answers.google.com/answers/threadview/id/595242.html). Concrete
linings, which comprised 380 mm thick concrete, were used to help the tunnel withstand the
intense pressure from above as well as to help waterproof the tunnel. Each 1.5 meter-long
lining ring was formed of eight segments plus a key segment, which could weigh anything
from 0.75 to 9 tons. (Anderson, G., & Roskrow, B., (1994). The Channel Tunnel Story (pp.
128). Great Britain: E & FN SPON)
On the British side, construction work began at the foot of Shakespeare Cliff, which had been
the site of a previous tunnel attempt in 1974. Six TBMs were assembled in a large cavern
area, over 20 meters high and equipped with overhead cranes. Three undersea tunnels were
bored towards France and three underground tunnels towards the terminal site at
Folkestone.(http://answers.google.com/answers/threadview/id/595242.html)
Besides the tunnels, two terminals were built on both sides: at Conquelles in France and at
Folkestone in UK.(http://answers.google.com/answers/threadview/id/595242.html)
The following table shows the information about the completion of each tunnel. (http://
www.moorerail.com/tunnel/construction.asp)
Start From Towards Tunnel Distance Completion

1987.12.1 Shakespeare Cliff France Service 22.29km 1990.11.3
1988.2.28 Puits de Sangette England Service 15.61km 1990.10.31
1988.6.28 Puits de Sangette Coquelles Service 3.26km 1989.4.27
1988.9.30 Shakespeare Cliffe Folkestone Service 8.15km 1989.11.9
1988.12.1 Puits de Sangette England Northern Rail 20.01km 1991.5.22
26
Start From Towards Tunnel Distance Completion

1989.1.16 Puits de Sangette Coquelles Northern Rail 3.25km 1989.12.18
1989.2.27 Shakespeare Cliff France Northern Rail 17.91km 1991.4.23
1989.3.26 Puits de Sangette England Southern Rail 18.86km 1991.6.28
1989.6.12 Shakespeare Cliff France Southern Rail 19.03km 1991.5.28
1989.8.2 Shakespeare Cliff Folkestone Northern Rail 8.14km 1990.9.11
1989.11.27 Shakespeare Cliff Folkestone Southern Rail 8.15km 1990.11.20
1990.2.23 Coquelles Puits de Sangette Northern Rail 3.26km 1990.11.29
Critical completion details for Chunnel sub-sections
Issues during Construction

The whole construction project was generally accomplished successfully and in a timely
manner. However, even though elaborate preparation had been done in the planning and
design phase, the engineers came across technical problems during the construction. Most
of them were fixed immediately thanks to advanced techniques. Unfortunately, some other
problems resulted in unexpected cost overruns. To make things worse, some solutions were
not unassailable, which led to accidents in the future operation.
The following examples illustrate some of the significant technical hurdles.
Construction Delays
There were a few reasons for construction delays. The most apparent delay was due to the
delay in procuring financing. Eurotunnel only managed to underwrite a significant amount in
November 1987, one month before tunneling was supposed to begin (Costs, Risks and
Financing). This guarantee amount in turn assured banks to invest their shares. The delay in
financing led to a corresponding delay in purchases and procurements.
Early tunneling efforts also ran into some problems on both the French and British sides.
There were poorer-than-expected geological conditions on the British side, leading to
constant delays in favour of safety. On the French side, the tunneling machines were state-of-
the-art, even more than was actually necessary (source??). However, one of these TBMs did
not function well, leading to a lot of delays in exchanging and switching equipment.
On the management side, there were significant delays due to conflicting priorities between
Eurotunnel and TML (Costs, Risks and Financing). Eurotunnel’s priority was to finish
construction as soon as possible to maximize profits from operations. TML’s priority on the
27
other hand was to maximize profits from the actual construction itself. Despite many
discussions and lots of correspondence, very little progress was made on how to converge
these different priorities. Either both teams should have been integrated better, or separated
and given clearly assigned responsibilities.
Tunnel Excavation
At the beginning of excavation,progress suffered as a result of some poor characteristics of
the gray chalk, coupled with a great quantity of water influx. These problems, combined with
the less-experienced machine operators and the initial failures of the machine, raised
concerns about the ability to increase the speed of excavation. However, discussions with
TML engineers and shared advice allowed contractors to solve each difficulty as it arose.
Various problems occurred during the excavation, such as a slipping of muck on the belt
conveyor, water splash from the screw conveyor, deformation of cutter head, muck
penetration into the driving part of screw conveyor, etc. However, beyond the contents of the
written agreements, both the contractors and the manufacturers together endeavored to
make the best use of “Same Boat" spirit, translated as, "Let us work together, uniting both
parties' minds into one in order to excavate the tunnel.” (Uga, Y., (1995) The Channel Tunnel
Project: Challenge and Rewards, Tunnelling and Underground Space Technology, Vol. 10,
No. 1, pp. 27-29, 1995) That was one of the reasons that the difficulties during the
excavation could be solved.
Besides the coordination of all the stakeholders, the service tunnel played an important role in
the tunnel excavation. In order to confirm ground condition, it was decided that the service
tunnel would always be driven not less than 1km ahead of the trailing rail tunnels to act as a
plot. It was also used to give access for grout injection to improve running tunnel driving
conditions where it was required. In fact, this second-sighted plot worked very well so that
the constructors could find out the problems as soon as possible and even test the solutions.
Due to the adverse tunnelling conditions, the rate of progress of construction varied on both
sides. The English side progressed at an average rate of 150m/week while the French side
progressed at an average rate of 110m/week.
28
Air Conditioning System

In general, rail tunnels are not explicitly designed to maintain a comfortable temperature such
that air would circulate freely from one end of the tunnel to the other. In practice, few
engineers would take air conditioning into account when they designed a tunnel. But for the
construction of the world's longest underwater tunnel, this oversight proved costly.
In 1991, when contractors checking the aerodynamics of the Channel Tunnel, they
discovered that it would require air-conditioning. The length, depth and narrow width of the
tunnel and the heat that high-speed trains would generate as they passed through, would
combine to raise the temperatures as high as 130 °F (about 55 °C) in the passageway.
(Veditz, L.A., (1993) The Channel Tunnel: A Case Study)That would not only make the trains
unbearably warm for passengers, but it probably would cause equipment to malfunction and
the tracks to ultimately buckle.
To solve the overheating problem, a special air-conditioning system had to be employed to

keep the temperature in the tunnel between 38°C to 50°C. However, because of the length of
the Channel Tunnel, such kind of huge system did not exist at that time. The engineers
involved in the project had been wrestling with ways of incorporating in the existing design of
the tunnel, which was scheduled to open in 1993. Eventually, York PA. Company took this
challenge and designed the system to meet the requirements. (http://
articles.baltimoresun.com/1991-05-08/business/1991128195_1_chunnel-channel-tunnel-
underground-tunnels) The air-conditioning system was described as the most expensive one
in the world, which made a cost overrun of 200 million US dollars totally.
Empiricism in designing the Channel Tunnel was the main reason of the air-conditioning issue.
As a mega infrastructure project, the Channel Tunnel was definitely unique, and
unprecedented. The experience from normal tunnel design should not have been applied
mechanically; the outcome was that all the stakeholders had to face the technical, financial,
even political risk. In this case, the large amount of cost overrun was a bitter pill for the
Eurotunnel Group to swallow. Experience in the previous projects would have been helpful,
but such information is not always available. This issue then should be a lesson for future
projects - to ensure the unique needs of certain projects that are not shared by others.
In addition, a detail in the tunnel-designing should not have been ignored. The distance
between the trains and the walls of the Chunnel was shorter than in most tunnels. (http://
articles.baltimoresun.com/1991-05-08/business/1991128195_1_chunnel-channel-tunnel-
29
underground-tunnels) It should be one of the possible reasons why the temperature in the
tunnel was so high. Of course, there is no indication that the designers had deviated from
standard technical principles. But in this case, further exploratory calculation could have
revealed such oversight.
In this case, the importance of the early project phases is shown perfectly. The air-
conditioning issue was discovered unintentionally at the end of the execution phase, which
was too late for the Eurotunnel Group to solve the problem. Most of the tunnels had been
built, so that the air-conditioning system had to be forcibly implemented within the existing
construction. As a result, the cost overrun was inevitable.
Fire Protection System

For large-scale infrastructure, safety is of highest priority. In the Channel Tunnel project, the
Fire Protection System was established, including fire detection system, water pipe system,
ventilation system and emergency response teams. Some special design had been used not
only in the wagons but also in the tunnels. (WIKIPEDIA:McFarlane, Andrew (12 September
2008). "Focus turns to cause of tunnel blaze". BBC News. Retrieved 12 September 2008 21)
For instance, the wagon door systems were designed to withstand fire inside the wagon for
30 minutes, longer than the transit time of 27 minutes. Each wagon had a fire detection and
extinguishing system, with sensing of ions or ultraviolet radiation, smoke and gases that can
trigger halon gas to quench a fire.
It seemed that the whole Channel Tunnel was quite safe under the protection of the system.
Unfortunately, to date, there have been three fires in the Channel Tunnel, all on the heavy
goods vehicle (HGV) shuttles, and other more minor incidents, which pinpointed the technical
problems in designing and testing.
First of all, due to the combination of heat and smoke, a short-circuit tripped out the power
so that the failure of traction power happened. Secondly, numerous on-train sensors, insisted
upon by the safety regulators, had proved unreliable, frequently giving warning signals later
found to be incorrect. (Kirkland, C.J. (2002) The fire in the Channel Tunnel, Tunnelling and
underground space technology) But the most important reason was that there was no fire
protection for the concrete linings. (http://www.mace.manchester.ac.uk/project/research/
structures/strucfire/CaseStudy/HistoricFires/InfrastructuralFires/channelTunnel.htm) During
the fires, large quantities of concrete exposed to the fire had spalled off from the tunnel lining.
30
This resulted in very fine concrete rubble collecting on the access walkway and the roof of the
HGV wagons.
Realistic material behaviour must be an important consideration in the design of the fire
protection systems of a tunnel to protect the integrity of the tunnel in a fire, particularly for
tunnels built through poor ground condition. The designers of the Channel Tunnel did not
take this element into consideration. Moreover, there was no fire-testing for the high strength
concrete. Since the tunnels are already in operation, possible solutions like fire-proof coatings
for the concrete, would be additional costs.
Actual Costs of Construction

Eurotunnel project costs are decomposed into construction costs, corporate
costs, and financing costs. These costs incurred since August 1990 are as follows:
Amount (US$ million)

Construction costs 1595
Target Works 1053
Terminals 207
Fixed Equipment 68
Fixed Equipment 42
Bonuses 5
Effect of Inflation 185
Corporate costs 301
Net financing cost 179
Total costs since August 1990 3635
Costs breakdown since the year 1990
Mr Kirkland, summarized in a later article (The channel tunnel lessons learned) that different
setbacks in the project that had contributed to preventing an efficient project. The project had
gone on a 80% overrun and the start had been delayed 19 months for maintenance. In
retrospect, if estimation of costs had been done correctly, it could have been that a different
bidder and proposal could have rightfully won the project.
The cost overruns of the project were shared between Eurotunnel and TML. Eurotunnel was
responsible for approximately 70% of cost overruns while TML was responsible for the
31
remaining 30%. The contract was revised in 1990 according to which Eurotunnel was
responsible for about £1.58 billion and TML was responsible for 30% of all costs of the target
works above this level.
The reasons for cost overruns were manifold. As mentioned earlier, the rate of tunneling in the
initial stages was slower than expected, and the labour costs on the British side were higher
than expected (Costs, Risks, and Financing). As mentioned earlier, the fixed-price contracts
signed with contractors and vendors was also a bad move, resulting in significant claims for
exceeding initial scope parameters. And finally, the procurement estimates in the 1987
forecast were no longer applicable after the long approval process by the national
governments, resulting in the final prices exceeding the initial provisions of the contract
(costs, risks and financing).
On the management side, unexpected financial expenses, the enlargement of certain

divisions internally, and the hiring of third-party project management personnel from the
Bechtel Group were not covered in the initial estimates, and led to increased costs (Costs,
Risks and Financing). In hindsight, the scale and complexity of the project should have
indicated to the Eurotunnel group that optimistic estimates would not be accurate.
Legal disputes and conflicts

The fire which occurred in the Channel Tunnel caused the tunnel being unavailable from
September 2008 and February 2009 incurring a full year loss to Eurotunnel over disputes on
insurance payments by Eurostar and SNFC.
There were conflicts between Eurotunnel and TML due to the huge cost overruns and delays
in construction. The relations between the two companies were strained after the difficulties
encountered during in 1988 and 1989. TML accused Eurotunnel of suspending the payment
of the completed works and as a result, the banks refused to provide the next withdrawal
until the two parties were brought into agreement thereby cutting all financial resources to
Eurotunnel. The syndicated banks agreed to provide the next loan after the dispute between
the parties was settled. The Project Implementation Division was reorganized into one which
was very similar to TML. It emphasized greatly on the detailed requirements of Eurotunnel’s
operation division.
32
Several claims were submitted to Eurotunnel by TML ever since the construction had
commenced. Many of these claims were in direct consequence of the scope creep
throughout the project lifetime, and could have been avoided.
Discussion
When the construction of the Channel Tunnel was deemed complete in December 1994, the
reality was that there had been a 19 month delay from the originally expected end-date in
May 1993. There was also a cost overrun of US$3 billion, on top of the originally estimated
US$4.3 billion. While the technical achievement of the construction is not up for debate, the
implications of the time and cost overruns are serious. As such, the Channel Tunnel project
can be held as a case study for future large-scale international infrastructure projects, with
best practices to be adopted as well as costly mistakes to be avoided.
Since the project was privately funded, there was a financial incentive for CTG/FM to
complete construction as soon as possible to maximize revenues from operations for their
investors, making time the primary project driver. This may not have been the case had the
project been government-funded.
One the earliest mistakes made on the project was that design and construction were fast-
tracked almost simultaneously (Chunnel Project PMI). Many documentary approvals were
required from both participating national governments. The governments were slow in
processing these approvals. As such, there were constant delays and false starts at this
stage. It is common industry knowledge that underground construction projects are
extremely risky and uncertain (PMI). On top of this, the technology and scale of the Channel
Tunnel project was also new and untested. As such, proper planning and scheduling with
grace time for expected delays would have been more realistic.
Specifically, no measures were taken to cover or account for “unknown unknowns” (PMI). In
this case, the need for ventilation in the tunnels was not addressed in the design phase, and
was not catered for in the scheduling or costs. This is an extremely important takeaway from
the Channel Tunnel project, highlighting the importance of a systematic and thorough design
phase. Also, the need for proper cost and time estimations allowing for uncertainties and
contingencies was highlighted.
33
The lack of a fixed scope from a strong dedicated design phase and constant IGC
intervention led to significant scope creep. In contrast, the national governments had
pressured CTG/FM to award fixed-price contacts to subcontractors and vendors to keep
costs down (Chunnel Project PMI). This inevitably led to significant claims at the end of the
project.
The disproportionate power of the IGC also was counter-productive. Care must be taken to
not repeat these mistakes. One proposal to minimize to balance the power vested in the IGC
would have been to cover all additions to the initial scope in a separate contract. This new
contract would be signed by TML, Eurotunnel and the IGC. This would mean that the IGC
would also share some financial responsibility for potential changes. Moreover, the new
contract would reasonably reflect cost and time overruns corresponding to the added
changes.
Moreover, the status of the IGC in the project organization was much higher than Eurotunnel
and TML. This meant that the priorities of the IGC were more important than the working
understanding of the TML contractors. Instead, the IGC could have been working more
closely with the contractors. For example, the IGC could have been an integrated project
team, including representatives from TML and Eurotunnel, so as to better align the diverging
priorities.
On a related note, many subcontractors and vendors, and even TML were found to have
assumed optimistic case conditions in their initial. According to Flyvberg (one of the Flyvberg
papers), under-estimation of true costs is extremely common in infrastructure projects due to
the highly competitive bidding process. As such, cost overruns were almost inevitable and
these also contributed to the high number of claims disputes at the end of the project. The
contractors had to pursue these claims for financial survival, but the frequency and size of
these claims soured relations between management and contractors. Flyvberg recommends
methods like reference-class forecasting and improved transparency and accountability in
future projects to avoid such cost overruns.
Also, fixed-price contracts may not be the best option in highly uncertain projects such as the
Channel Tunnel. Instead, if an alternative contract type had been chosen, for example cost-
plus-incentive-fee (CPIF) contracts, would be a better fit for projects such as these. While
reimbursing the absolute costs would be risky from the clients’ perspective, the incentives
34
scheme would motivate contractors to work as efficiently and cost-effectively as possible,

resulting in a win-win for both sides.
Another possible solution to cost overruns in such uncertain projects would be the
mandatory inclusion of standby credit – which is credit set aside but not compulsorily used
for the project. It accounts for “unknown unknowns”. Insurance is also another possibility, but
given the high level of risk of the target project, it is unlikely to have been covered
comprehensively. It would be possible to quantize risk and insure individual risks accordingly,
though this would indeed make planning more complex. Indeed this was observed in Groupe
Eurotunnel’s Reference Document where the adequacy of insurance policies and payments
had to be revised in 2010, to reflect the changing insurance market, as well as the
performance of the Eurotunnel itself (Risk 2010 Reference Document).
In hindsight, the Channel Tunnel was constructed to specifications finally, reflecting the high
professionalism of the technical aspects. Most of the blame for the time and cost overruns is
placed on uncontrolled scope creep. Consequently, the major takeaways are as follows.
Project planners must spend more time on the design phase, with realistic cost and time
estimations and ample allowance for contingencies. In the case of involvement of external
parties (such as the IGC, in this case), there must be a financial commitment as well – both to
cover the extra costs, and to align the interests of all parties in at least one dimension of
consideration.
35
Closeout and Commissioning
Some of the significant challenges faced during the project included cost and schedule
management. Towards the closeout phase, instead of trying to solve outstanding problems,
much effort was focused on analyzing the sources of cost overruns and shifting blame.
Although certain portions of the closeout phase was completed way ahead of time, other
portions of the project could not be completed as scheduled due to the delay in delivery of
key mechanical systems.
Communication and teamwork broke down in several key areas during the closeout phase.
Each party was interested only on its own priorities rather than focusing on a common
solution that would favour all. The delay in the delivery of the project and exceeded budget
had a very big impact on the ROI of the overall project. The initial cost models were based on
the assumption that the tunnels would be completed on time and thereby generate revenue.
Regardless, the construction was finally complete and the Tunnel opened with appropriate
fanfare. Despite outstanding litigation involving claims from both TML and Eurotunnel, the
glory was shared and the internal disputes were not publicized. The opening ceremony was
held in Calais, France and inaugurated by Queen Elizabeth II and the French President
François Mitterand. Immediately after, a similar ceremony opened the terminal at Folkestone,
UK. In 1994, the American Society of Civil Engineers rightly recognised the technical
achievement of the Channel Tunnel and voted it as one of the Seven Modern Wonders of the
World.

Operations
According to the BOOT scheme, Eurotunnel remains the sole owner of the tunnel and its
revenue. The scheme comes orginally from the BOT approach where transfer happens right
after the contracted operating period. A brief analysis of the operation of the project is thus
included.
The combination of the time delay and cost overrun past initial expectations still affects the
ROI expected from the Chunnel. People might regard this as cost risk but in fact it is a
technical risk. The project was supposed to be an alternative to ferries and planes. While
ferries hadn’t gotten any faster, budget flights have gotten much cheaper leading to less
turnover as shown in Figure 1. It is however worth noting that the EU liberalization of public
transport has triggered competitions and changes in tariff policies has led to the unplanned
deficit.
Passenger volume forecasts and actual passenger volumes

The second figure shows the escalation of turnover for other services provided by the Euro
Tunnel.
Comparison on passenger volumes to freight volumes in the Channel Tunnel
38
Discussion & Conclusion
After overcoming the political, financial and technical problems, the Channel Tunnel were
accomplished, and hundreds years of dream of both countries came true. We cannot deny
the remarkable achievement in this unprecedented project. However, there are lots of
experience and lessons in this project that we could benefit from.
The Channel Tunnel case shows that the project management plays a significant role in all the
phases of a project. The delays and cost overruns are only the signs of the disorganized
management, which is the deep reason of the problem. To solve the problem, “what” is the
solution, the existence of the solution, is undoubtedly essential, but not the only key point.
How and when to implement the solution, and how to evaluate it, are even much more
important than the solution itself. Unfortunately, the Channel Tunnel did not succeed on this
aspect. The conflict between IGC and contractors is a good example of that.
Another shortfall that the Channel Tunnel faces now is the large difference between
forecasted passenger volumes and actual passenger volumes to date. At the time of planning
in the mid-1980s, the project managers could not have predicted the trend of budget airlines,
as well as falling costs of intermodal transportation in general. Since the expected ROI of the
project was calculated based on optimistic forecasts, it seems Eurotunnel may not be able
recoup its due profits.
So, the project can be briefly judged to have been successful functionally and technically, but
not successful from a strategic planning and logistical planning perspective.
Due to the unprecedented complexity, we cannot criticize the people involved in the project
too much. The Channel Tunnel was predestined to have difficulties to be completed due to its

uniqueness. The suitable cases are not available at all for the managers and contractors as
reference. Flyvberg for example mentions the possibility of using projects of similar scale and
scope to apply reference-class forecasting. However, the more unique a project is, the less
reference-class forecasting would help. One solution would be to consider the sub-projects
themselves with reference-class forecasting, while the larger project has additional criteria.
Another important lesson from the Channel Tunnel project was the lack of unifying leadership.
Perhaps the binational teams were seen as necessary, and also efficient since the project
was being constructed from both sides of the Channel independently. However, the team
recommends that regardless of the physical work locations, the managerial team should be
unified, if not geographically, then at least technologically (e.g. Skype, email etc.). The team
also recommends a high-level integrated project management team (IPT), with members
representing all aspects of interest in the project. The equivalent of this suggestion in the
Channel Tunnel project would have been an IPT that had representatives from the national
governments (instead of a separate IGC), technical experts, and project leads from both
Eurotunnel and TML. From experience, it is also seen that having a charismatic leader is
vastly beneficial for teams with ambitious goals.
And finally, the implications of the IGC’s actions in delaying the Channel Tunnel have been
highlighted and discussed in the report. Since privatisation and private funding for common
infrastructure will no doubt be a de facto preference in the coming decades, the role of the
government supervisory body must be moulded to be complementary and beneficial to these
projects. As mentioned earlier, the lack of financial repurcussions for the IGC made them
extremely demanding, hurting the project’s critical path and leading to cost and time
overruns. Some solutions to this were discussed earlier. However, the team also
recommends that, regardless of the cost, at least some part of common infrastructure should
in fact be funded with public funding as well, to reflect and exercise the public good as a valid
stakeholder interest.
In conclusion, the Channel Tunnel project reflects one of the crowning achievements of
modern-day engineering, and deserves its place as one of the Wonders of the World. Even
from a project management perspective, the project offers many takeaways from first-hand
experience, which should not be ignored.
40
References
Channel tunnel Cost-Benefit analysis.
Channel Tunnel: Transposition of Railway Safety and Interoperability Directives. (2012).
Frank T. Anbari, P. G., Paul Jaffe,Craig Letavec, Rizwan Merchant. The Chunnel Project.
Kirkland, C. d. (1995). The Channel Tunnel--Lessons Learned. Tunnelling and Underground Society, 1.
Kirkland, C. J. (1986). The Proposed Design of the English Channel Tunnel. Tunnelling and Underground Space Technology,
1.
Kreydieh, A. (1992). Risk Management in Bot Project Financing.
Lemley, J. K. (1995). Managing the Channel Tunnel--
Lessons Learned. Tunnelling and Underground Society, 10.
Noulton, J. (2001). The Channel Tunnel. Japan Railway and Transport Review.
Pompée, P.-J. Channel Tunnel French Terminal At Coquelles Site.
Pompée, P.-J. Channel Tunnel Project Overview. ss.
Robbins, R. (1995). Boring Under the Channel: One Perspective on the Experience. Tunnelling and Underground Society, 10.
Singh, P. Project Financing.
Su, M., Bayramov, E., Szczecina, C. J., & Faria, H. A. L. d. (2008). The Channel Tunnel.
Takesue, N. (1991). Financial Evaluation Of Refinancing Of The Eurotunnel Project.
Uga, Y. (1995). The Channel Tunnel Project: Challenge and Rewards. Tunnelling and Underground Society, 10.
Vandebmuck, P. (1995). The Channel Tunnel: The Dream Becomes Reality. Tunnelling and Underground Society, 10.
Vickerman, R. W. (2006). The Channel Tunnel: Consequences for Regional Growth and Development.
Wood, S. A. M. (1995). The Channel Tunnel as a Role Model. Tunnelling and Underground Society, 10.
(Chunnel Tunnel Facts | eHow.com http://www.ehow.com/about_7217914_chunnel-tunnel.html#ixzz2NAlObsjI).

Eurotunnel 2005 Annual Review, accessed on 10 December 2007 http://ww1.eurotunnel.com/NR/rdonlyres/

D8313D6F-2EAB-4FA7-85DB-8A822E0E3A3E/0/UK_2_partie_RA2005.pdf
BBC Inside Out - South East: Monday 14 October 2002, accessed on 11 December 2007 http://www.bbc.co.uk/insideout/
southeast/series1/channel-tunnel.shtml
New York Times: Channel Tunnel Treaty Signed, 13 February 1986, accessed on 8 May 2009 http://www.nytimes.com/
1986/02/13/world/channel-tunnel-treaty-signed.html
Berne, A., Institution of Civil Engineers. The Channel Tunnel. Great Britain: Thomas Telford, 1992. p. 6. ISBN 0-7277-1922-X
http://books.google.com/books?
http://history1900s.about.com/od/1990s/p/Channel-Tunnel.htm
Financial Evaluation Of Refinancing Of The Eurotunnel Project By Naoki Takesue
The Proposed Design of the English Channel Tunnel by C. J. Kirkland
42
Appendix
Time Line
Key dates Event

1802 Albert Mathieu put forward a
cross-‐Channel tunnel
Proposal.
1875 The Channel Tunnel
Company Ltd began
preliminary trials
1882 The Abbot's Cliff heading
had reached 897 yards
(820 m) and that at
Shakespeare Cliff was 2,040
yards (1,870 m) in length
January A UK–France government

1975 backed scheme that started in
1974 was cancelled
(Labour Party came into gov-‐
ernment)
1979 Return of Conservatives to the
government and re-‐instalment
of the project
February The Treaty of Canterbury

1986 was signed allowing the
project to proceed
June 1988 First tunnelling commenced
in France

The four proposals were defined as such:
Channel Tunnel/France-Manche:
Double rail tunnel
Cost: $5.5 Billion
EuroRoute:
A bridge/ Tunnel scheme. Road tunnel and R ail tunnel.
Cost: $11 -14 Billion
Channel Expressway:
Twin very large bored tunnel, two-line express way and train track.
Cost: $2.9 Billion
Eurobridge:
A bridge for motorway and a Rail-tunnel.
44
Cost $11.5 Billion
It is worth to note that the project itself ended up costing more than the 2 most expensive
bidders.
Train companies access to the Euro tunnel (?)
2007: First proposal for private transportation companies to use the tunnel denied for safety reasons.
2008: proposals to buy Euro star were rejected.
2009: Eurotunnel decides to change safety regulations to allow trains to travel in the tunnel, including
high speed trains that did not split.
2010: Liberalization of transport service and change in safety regulations.
45

The Chunnel - Project Management Retrosp PDF

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

The Chunnel - Project Management Retrosp PDF

Caricato da

Copyright:

Formati disponibili

The Channel Tunnel:

EPA1412 Project Management Group 4

Scope of Student Project 6

Inception & Design 9

Scope of the Channel Tunnel Project 11

Treaty of Canterbury & IGC 11

Financing the Channel Tunnel 13

Initial Risk Analysis 15

EPA1412 Project Management Group 4

Construction of the Channel Tunnel 19

Planning and Management 19

Issues during Construction 27

Air Conditioning System 29

Fire Protection System 30

Actual Costs of Construction 31

Legal disputes and conflicts 32

Closeout and Commissioning 36

Discussion & Conclusion 39

From a project management perspective, the construction was spearheaded by two

EPA1412 Project Management Group 4

Scope of Student Project

a. Introduction to the Channel Tunnel

d. The Definition Phase

EPA1412 Project Management Group 4

e. The Execution Phase

f. The Closeout & Operations Phase

g. Discussion & Recommendations

EPA1412 Project Management Group 4

Eurobridge: a 4.5 km span suspension bridge with a roadway in an enclosed tube

Euroroute: a 21 km tunnel between artificial islands connected by bridges and,

Scope of the Channel Tunnel Project

Treaty of Canterbury & IGC

Organization Chart of the TML Consortium

Financing the Channel Tunnel

Breakdown of Costs Nov 1987 Forecast (US$ million)

Costs breakdown for the year 1987

Initial Risk Analysis

Planning and Management

EPA1412 Project Management Group 4

working arrangements most comfortable to them. The alternative of imposing a universal

As the project evolved, bi-national co-operation and communication necessarily brought

Chart detailing typical organizational changes throughout project lifetime

Organization Chart of the TML Consortium as of 1988

Organizational chart of the TML Consortium as of 1989

However, a communication problem emerged between the distant groups of construction

Intervention by the IGC

During construction of large-scale infrastructure, risks include completion risk, construction

Technical Construction Issues

Start From Towards Tunnel Distance Completion

Start From Towards Tunnel Distance Completion

Critical completion details for Chunnel sub-sections

Issues during Construction

The following examples illustrate some of the significant technical hurdles.

Air Conditioning System

To solve the overheating problem, a special air-conditioning system had to be employed to

Fire Protection System

Actual Costs of Construction

Amount (US$ million)

Costs breakdown since the year 1990

On the management side, unexpected financial expenses, the enlargement of certain

Legal disputes and conflicts

scheme would motivate contractors to work as efficiently and cost-effectively as possible,

EPA1412 Project Management Group 4