chunnel ppt
DESCRIPTION
Project Management,TRANSCRIPT
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The Chunnel ProjectA learning out of Failure
By
Garvit Bharadwaj
Piyush Tyagi
Pranay Karthik
Rachit Anand
Rajesh Bhatia
Sankarshan Joshi
Sumeet Gupta
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Channel + Tunnel = Chunnel
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The Chunnel
One of the world’s Largest Privately Funded construction project involving 2 Governments – French and British
220 banks
Numerous contractors
Regulatory Agencies (IGC)
The project was bid at $5.5 b but completed at $14.9 b
$8.4b
Scope creep
19 Months Delay
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The Chunnel - Contracts
French + BritishGovt
BOT-Contract CTG/FM
CTG/FM Contract TML
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Next 15 Minutes
Inception
Development
Execution
Closeout
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What is expected?
• Proper risk management
• Engineering risks
• Process risks
• Approval risks
• Financial risks
• Business risks
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Inception Development Execution Closeout
• Inception
• Historical background of the project
• Objective
• Political climate
• Pre-feasibility study
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Inception Development Execution Closeout
• Scope:
• Fixed transportation (51.5kms)
• Economic development
• Pressures causing mishaps:
• Lack of scope causes resource planning, cost estimating & budgeting difficult.
• Air-conditioning costs
• Formation of intergovernmental commission
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Inception Development Execution Closeout
• Finance aspects:
• Treaty says to no government aid
• Pursued via equity &loan capital markets.
• Scheduling:
• Activities related to activity definition, activity
sequencing, activity duration estimates.
• Planning 3 tunnels which required 46 contractors to
complete the design requirements.
• Changing safety rules created negative variances.
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Inception Development Execution Closeout
• Incompatibility issues could have been avoided by stating Initial quality requirement in more detail.
• Areas of improvement There was much interpretation for the agency like IGC .The IGC decision to change 600mm doors to 700mm doors itself delay the project to 9 months.
• Teamwork & cooperation considering the scope of the project was very important.
• Contractual agreements made teamwork a complex activity.
• It was very difficult to come to a mutually agreeable solution to material issues due to incomplete requirements, scope changes and thus , risk response strategies should have been considered.
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Inception Development Execution Closeout
• Efficient communication is very important in
preplanning, contract negotiations, financing and
technical issues during the inception stage.
• Communication seemed to breakdown in case of issues
regarding organizational structure , finance and
contracts as the issues were not timely solved.
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Inception Development Execution Closeout
• Communication plan addressing horizontal and vertical communication channels should be in place.
• Plan should also include information sharing, issue tracking and performance reporting.
• Although , advanced project management tools and techniques were used, the decision-making ability to address critical issues from centralized position seemed insufficient
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Inception Development Execution Closeout
Some critical aspects in development phase:
• Massive communication barriers.
• Problems due to huge scope of the project.• IGC played critical and detrimental role.
• Cost planning.• Banks played an important role from start.
• Scheduling was well done but project still faltered on deliver date.• IGC’s highest standard norm.
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Inception Development Execution Closeout
• Better risk management could have been done.
• Lack of investment in team building.• Two Government's denial to provide financial
guarantee.
• Project office’s work lacked detail.
• All in all, given the facts, the project delay and cost overrun were almost foregone conclusions
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Too Early A Start
Design
Construction
Approval Issues
Enggineering Risks
Underground Construction
New Technology
Risk
Inception Development Execution Closeout
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Bureaucratic Pressures
French + BritishGovt. Pressures
Control CostsFixed Price
Implications for TML
“Winner Takes All” Issue
Low Bid Prices with Best Case
Scenario
Squeezing Revenue via
Change orders
Project cost Rise from $4.3 billion
TO $7 billion
Inception Development Execution Closeout
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Controls in Wrong Hands
Controls
Financing Banks
Profit Maximization
ConstructionCompanies
Risk Minimization
NO IMPORTANCE TO OPERATIONS
Inception Development Execution Closeout
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Communication Issues
InternalCommunication
Limited
Different Countries
Different Cultures Different
Specification
Inception Development Execution Closeout
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Inception Development Execution Closeout
The immense amount of Litigation and Claim against project.
• Scope: Scope of the project increases due to overall changes request through out the life of project.
• Cost & Schedule Management: Max. Efforts to analyzing the source of overrun cost and blaming participating organization.
• Team work and Communication: Team work and communication had broken down in several key area. Like Financial banker focus on minimizing their losses ,so they refused to negotiate any settlement. Clearly win-win negotiation far from mind between the parties.
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Inception Development Execution Closeout
• Time Over shoot: the greatest impact of ROI.
• Quality of project: Quality of a project is up to the mark as per engineering design and expectation. Even no. of accident was less as per industrial avg. during project running time.
• Effective Change Management: They ready to make changes as per demand without additional funding during close out.
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Learning's
• Equal importance should be give to the technical as well as functional aspects of project management.
• Project contracts and financing agreements should not be rushed and should provide for contingency.
• External Stakeholders should only play monitoring role and should not take part in day-to-day operations.
• Large projects like Chunnel Construction requires leveraging of new technology and lessons learned from existing project.
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Thank You!!!! No Questions Please.
We Know You Cant Control, So Go Ahead And Shoot Your
Questions!
If learned from, Mistakes can be converted into Experiences.