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Channel Tunnel Story

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The extent to which new, or complex, technologies impacted upon the project.

The Channel Tunnel project would have been built two centuries ago if it was technically feasible. In 1802, the idea of a road tunnel was suggested to Napoleon during a brief peace between France and England. French engineer Albert Mathieu Favier gave Napoleon details of a scheme involving two tunnels, one which would be candle-lit for horse-drawn carriages and the second acting as a sort of drain to take away water seeping into it (Anderson & Roskrow 1994). However the scheme existed only on paper due to the absence of appropriate tunneling techniques. Digging a tunnel under ground is not a novel technology; however, the geology is, especially under the sea. Engineers had to check and hoped to find that a suitable rock for tunneling stretched in an unbroken bed across the channel.

Building a tunnel doesn’t require innovative technology, otherwise the government would not approve the project go ahead. However, the actual construction of a 50 km-long Channel Tunnel up to 50 meters below the sea tested the ingenuity and skills of the top minds in the European and American construction industry (Anderson & Roskrow 1994).

There were 11 specialized boring machines have been used in total on both, the British and the French sides, to work their way through the chalk marl stratum, which is between the gray chalk and glauconitic layer. The ground condition on the UK side had caused problem. The machine was designed for working in the dry, the UK side hit the wet ground which almost brought tunneling to a halt (Smith, 1994). The chalk was microfissured, which allowed water to pour through into the machine, which in turn led to the chalk collapsing into the tunnel between the last lining ring and the protective shield of the cutting head. This caused huge disruption and great discomfort to the miners (Smith 1994). TML had to modify the machines in situ, 50 meters below the sea. The modification did successfully make the machines to move forward and through the wet chalk, however, it became one of the reasons the project was ran over the budget and behind schedule.

Unlike the Channel Tunnel project, the HST project used a lot cutting-edge technology to develop the space telescope. It was a challenge back to 1977 as this was the first Large Space Telescope ever been built, hence NASA had no past experience to learn.

The Optical Telescope Assembly (OTA), in many respects the heart of the telescope, was to be constructed by Perkin-Elmer. A company had extensive experience of building astronomical telescopes. NASA accepted that a number of demanding technological problems would have to be overcome in order to build the OTA (Smith, 1989). One was the polishing of the Space Telescope’s primary mirror to the required accuracy. The mirror and optical systems of the telescope determine the final performance, and they were designed to exacting specifications. In case their cutting-edge technology ran into difficulties, NASA demanded that Perkin-Elmer sub-contract to Kodak to build a back-up mirror using traditional mirror-polishing techniques. In contrast, Perkin-Elmer would adopt a new approach, with a polisher controlled by a specially devised computer system.

This untried technology finally caused a big trouble to the project. Shortly after the HST was launched a disappointing ‘technical’ performance was discovered: while the pictures wee clearer than those of ground-based telescopes, the telescope seemed to be displaying distorted images. After a few tests were carried out, it was verified that the primary mirror had been ground to the wrong shape, it was too flat by about 2.2 micrometers. This disappointing and unacceptable for such a costly telescope as the LST was designed to orbit outside the distortion of Earth’s atmosphere allows it to take extremely high-resolution images with almost no background light.

The faulty mirror had been manufactured by the Perkin-Elmer, so NASA conducted an investigation on tracing what went wrong in the manufacturing of the optics. The team found that the Reflective Null Corrector (RNC), a testing device used to achieve a properly shaped no-spherical mirror, had been incorrectly assembled. This custom-built RNC was designed explicitly to meet very strict tolerances. Ironically, this device was assembled incorrectly, resulting in a wrong shape mirror. (NASA 2013) Nevertheless, Perkin-Elmer had serious failing in quality control.

A commission headed by Lew Allen, director of the Jet Propulsion Laboratory, was established to determine how the error could have arisen. The commission blamed the failings primarily on Perkin-Elmer. Relations between NASA and the optics company had been severely strained during the telescope construction, due to frequent schedule slippage and cost overruns. NASA found that Perkin-Elmer did not review or supervise the mirror construction adequately, did not assign its best optical scientists to the project (as it had for the prototype), and in particular did not involve the optical designers in the construction and verification of the mirror. While the commission heavily criticized Perkin-Elmer for these managerial failings, NASA was also criticized for not picking up on the quality control shortcomings, such as relying totally on test results from a single instrument.

Political Issue

Large projects involve many stakeholders, with the international complex projects such as the Channel Tunnel and HST projects, there are other players too, including more than one government. Without government support, either project would have started and completed. The Channel Tunnel project was actually started in 1870s, but the British government, as they did 100 years later, called a halt, worried about the security implication (Anderson & Roskrow 1994). The HST project was even more relying on the government, because it was funded by the government.

The Channel Tunnel was built in between British and France, and therefore the project had to get permission from both side’s government support. The British Government was not so keen to build fixed link, they have stopped twice in history due to security issue and fuel crisis. The British politicians were worried about the cost and had other priorities (Anderson & Roskrow 1994). They suggested the Channel Tunnel was not deemed necessary.

On the French side of the Channel, the political environment was quite different. The French were especially enthusiastic. They were developing their high-speed TGV system and believed they could effectively compete with the airlines if they had a high speed London to Paris rail route (Anderson & Roskrow 1994). The French also viewed the project as a direct means to promote development in the economically depressed Nord Pas-de-Calais region. Once, several years later, when the project had hit problems, one of the leading French contractors apparently suggested they should tell their political masters of their difficulties, both to ask advice and because of the possibility of political embarrassment should the scheme fail. He was given a reception with the President Mitterrand within days. His British counterparts complained they had to wait several months, and then only got to see Transport Secretary Cecil Parkinson, rather than Margaret Thatcher (Anderson & Roskrow 1994).

In 1982, two British and three French banks formed the Franco British Channel Link Financing Group. They were responding to the French and British governments’ worries about the likely cost of the project (Anderson & Roskrow 1994). After one and half year, they published a report stated that the project could be funded by private money and proposed two financing methods. The job they have done gave the idea of a fixed link a crucial boost.

In 1984, it became clear that both the British and French governments were committed to pushing the project forward. The French parliamentary elections were due to take place in the spring of 1986. And in 1988 there was due to be a French presidential election plus a British general election. The two leaders might have been poles apart politically, but both recognized the great potential electoral benefits of the Channel link because of its high profile, futuristic image and its job-creating potential (Anderson & Roskrow 1994).

The key political breakthrough came at a regular meeting between Thatcher and Mitterrand in Paris in November 1984. Following their talks they issued a joint announcement saying that both governments regarded the building of a fixed link across the Channel as being in their mutual interests (Anderson & Roskrow 1994). The British were fully committed to private funding, if not to the idea of the fixed link itself. The French were fully committed to the fixed link since 100 years ago, were understandably suspicious of the British, due to the 1975 cancellation and doubting the feasibility of private finance. However, the British had won the financing issue that the successful tender would have to raise all funding from private source without government aid or loan guarantees.

The political support for the idea of the Channel Tunnel, however, was not appreciated by the public later. Writing in the Daily Mail years later, the paper’s City Editor Andrew Alexander summed up the feeling of many skeptics: “The tunnel is not a commercial project. It is a political project – just like the Humber Bridge – to bring votes to the government of the day while leaving the costs and problems to be faced by others later.” (Anderson & Roskrow 1994)

The general election has been a serious issue to both projects due to long life time and complexity. Towards the end of 1986, Prime Minister Margaret Thatcher had called an early election. If Labour won, the party had said it would expect the present legislation to lapse while it held a public enquiry or some other detailed investigation into the project (Anderson & Roskrow 1994). This could delay the project for months or even years, and could easily destroy Eurotunnel’s complex financial plans. Eurotunnel’s insurance against these political uncertainties was to create as many jobs as possible before the election, so making it as difficult as possible for an incoming government to stop or delay the project (Anderson & Roskrow 1994).

Politicical issue was far more complicate and serious in HST project because the whole project was funded by the government. After World War II, the federal government became the chief sponsor of the scientific enterprise, and therefore seeking funding approval became the key political issue for HST project. The key political players included: Office of Management and Budget (OMB), the Congress and the White House.

NASA had to bring the project to OMB and convince OMB that federal funding is appropriate. If the project passes OMB and reaches Congress, it is then scrutinized by four subcommittees (two in the House of Representatives and two in the Senate) that deal with NASA funding. (Smith, 1989) If both sides of Congress approved proposal, it goes to the president to sign the bill into law.

In 1974, the funds for the Large Space Telescope (LST) had been denied by the House Appropriations Subcommittee. The subcommittee pointed out that “the LST is not among the top four priority telescope projects selected by the National Academy of Sciences.” (Smith, 1989)

In order to save the LST, NASA needed to lower the cost and a stronger support. One obvious way to cut costs was to reduce the size of the primary mirror and thereby scale down the rest of the spacecraft. (Smith, 1989) Therefore, the 3 meter LST was dead. After a decade as the focus of planning for a large telescope in space, it had become the lamented victim of the struggle to win congressional support, but had been reborn as the revised and repackaged 2.4 meter LST.

As suggested by OMB, NASA had obtained an international participation in, and financial contributions to, the LST. In 1976, NASA and the European Space Agency (ESA) had gone far toward reaching an agreement on a cooperative project. The deal was that ESA would pay about 15 percent of the costs. (Smith, 1989) Following on the international cooperation, a nationwide lobbying effort was coordinated among astronomers. Many astronomers met congressmen and senators in person, and large scale letter-writing campaigns were organised.

The Congress has eventually approved the funding to continue LST project, and aiming for a launch date of 1983. NASA, the White House, and Congress in fact gave their approval for the telescope for reasons much more diverse than simply the quality of the science the telescope’s supporters promised – for example, to promote international ties, to strengthen the scientific/technological base of the United States, to help maintain the capability of the MSFC, to provide employment in the districts and states of many congressmen and senators, and as part of a major initiative in the Ford presidency to promote the development of basic research. (Smith, 1989)

Internal political issue was another key obstacle that HST has experienced. Due to the size of the HST project, NASA asked its own two centers Goddard and Marshall to lead the project together. It was, however, not as smooth as NASA thought. That Goddard should manage the development of designs for possible scientific instruments led to an awkward institutional arrangement. It meant that Marshall and Goddard were linked at the same time as they were vying with one another to become the lead center for the telescope program (Smith 1989). Yet Goddard, because of its responsibility for the instruments, was providing information to Marshall on possible scientific instruments for the telescope to help Marshall in the construction of its telescope design. Communication between the two centres, perhaps not surprisingly, was far from good (Smith 1989). It was only in 1983, after James Odom at Marshall and Frank Carr at Goddard headed their respective Space Telescope organisations and strenuously set out to establish good working relations between the centres, which Marshall and Goddard began to work better together (Smith 1989).

The impacts of choice and decision making on the formative stages of the projects

Having a good start to the project makes life much easier. Unfortunately it is not simple, especially for these complex projects. In early stage of the project, funding was an obvious issue that impacted of choice and decision making. The HST’s total cost was roughly estimated at $700 million, making it a tough sell. Hence, in order to win the approval from the government, it was fashioned to a significant degree by extra scientific pressures, pressure that introduced server tensions into the program design (Smith 1989).

There are several changes made on the formative stage of the project, which was between 1973 and 1977. The 1973 design for the HST had a three meter primary mirror; the 1977 telescope had a 2.4 meter mirror. In 1973 there were seven scientific instruments; in 1977, five. In 1973 the Support System Module sat behind the primary mirror; in 1977 it surrounded the primary. In 1973 the telescope was fifty-five feet long; in 1977, just over forty-three feet long. Even the telescope’s name had been changed from Large Space Telescope to Space Telescope of 1977 (Smith 1989).

NASA made these changes for only one reason, lower the telescope’s cost in the shape of the White House and Congress would accept. It was, however, not purely a matter of reducing costs. In fact, the NASA was in a difficult situation, if they cut the program and the telescope’s capability too much, they would lose the interest and support of the astronomers. NASA needed to find a balancing point of the trade off between cost and technical performance. NASA had worked out a bottom line that 2.4 meter telescope was the minimum the astronomers would accept (Smith 1989).

Let’s go back to the Channel Tunnel project to see what happened there on the formative stage of the project. It was a bit different to the HST project as we discussed the HST project was totally funded by the government, hence NASA needed to make some changes of the project to get funding approval. The Channel Tunnel project, however, was a private funding project, as long as it meets following criterias: Anglo-French, private funding, technically feasible and accompanied by an Environmental Impact Assessment (Anderson & Roskrow 1994).

By 1984, two governments had decided that the Channel Tunnel project should go ahead. The only thing they needed to make a final call was the design. By October 1985, ten proposals had been tendered by different companies. Four of which were to be seriously considered:

1. Channel Tunnel Group/France-Manche: a double rail tunnel to accommodate both passenger trains and special car and truck carrying shuttle trains.
2. EuroRoute: Road bridges to an artificial island 8.5 km out to sea, which would be connected by a 21 km long immersed tube tunnel. Alongside the road link was a coast-to-coast rail tunnel.
3. Eurobridge: bridge scheme across the Channel
4. Channel Expressway: twin very large bored tunnels, containing a two-lane expressway for motor vehicles and a train track.

CTG and EuroRoute were clear two front runners because they were low risk compare to the other two proposals. The EuroRoute scheme was the most expensive and ambitious of the serious contenders; however, it also had top-level political support, particularly in the UK. Mrs Thatcher’s preference for a drive-through scheme meant it was her choice (Anderson & Roskrow 1994). The EuroRoute scheme would also create the most jobs; rail-only scheme would present the rail unions with too much power (Anderson & Roskrow 1994). But although the rail link would create fewer jobs than its more ambitious rival, it would directly employ 4,000 construction workers at peak, and CTG claimed that the total number of jobs created on both side of the Channel during construction would exceed 40,000 (Anderson & Roskrow 1994).

After realising the EuroRoute scheme was too expensive, the British government started seriously considers the Channel Expressway scheme. The Channel Expressway scheme was formed by the owner of Sealink, a ferry operator. It is quite understandable that once the Channel Tunnel is built, ferry business will lose all of its customers because of the grate time saving. Sealink boss James Sherwood warned that if his bid for the mandate failed, many of the 2,500 people employed by Sealink on the short sea routes across the Channel would be lose their jobs (Anderson & Roskrow 1994). Certainly, there were very real question marks over Channel Expressway. One was cost. The bidding cost of the Channel Expressway was underestimated. A road tunnel involves a much larger bore than a rail tunnel and this presents serious engineering problems requiring costly solutions said by CTG managing director Michael Gordon (Anderson & Roskrow 1994). There were other worries, too, such as the effect on drivers of going through such a long tunnel. On top of all this, James Sherwood was still lacking the level of French support because this scheme that would create far fewer jobs in France than its rivals (Anderson & Roskrow 1994).

The most important requirement is that whatever link may be chosen, it must be capable of being financed without any support from government funds or government guarantees against commercial or technical risks. And therefore those banks and financial experts had a big say on this project. Those financial experts who had looked in detail at the prospects for a fixed link and the schemes on offer were plumping firmly for a rail tunnel, and they were prepared to back their judgement with hard cash (Anderson & Roskrow 1994). As far as CTG was concerned it had won all the arguments. Its scheme was less of a technical and financial risk than any of others and as well as a smaller impact on the environment.

These tenders were evaluated over a two months period, at the end of which the CTG/France Manche sheme was pronounced the winner. In many ways, the CTG scheme was a compromise solution. However, it was relatively safe, in that it depended on proven technology, looked financially viable, and was a clear extension of projects had been positively appraised by official commissions in the 1960s and 1970s. (Anderson & Roskrow 1994)

The demands imposed by the various stakeholders

A project stakeholder can be defined as a person (or a group of people) who has interest in the success of a project and the environment within which the project operates. The Channel Tunnel and HST are examples of major projects which have various stakeholders. The stakeholders of these two projects had influenced project process from beginning to end.

Space telescopes were proposed as early as 1923. It was finally funded to build in 1970s. Despite of technical reason, the hardest part of initiating the program was politically feasible. However, a strong and broad-range coalition would have to be assembled and mobilized in support of a large space telescope before it could become politically feasible. And the coalition-building process would in the end involve winning favor from astronomers, NASA, industrial contractors, the White House, Congress, the European Space Agency, other groups of scientists, and even sympathetic journalists (Smith 1989).

The history of the HST can be traced back as far as 1946, to the astronomer Lyman Spitzer’s paper “Astronomical advantages of an extraterrestrial observatory,” was a visionary look at the sorts of astronomical questions that could be addressed by a large telescope in space. Spitzer was the chief champion for many years for HST, he believed that HST would provide a totally new capability: Its most important contributions to astronomy most likely would be “not to supplement our present ideas of the universe we live in, but rather to uncover new phenomena not yet imagined, and perhaps modify profoundly our basic concepts of space and time.” (Smith, 1989) It was that belief, rooted in a vision of the history of astronomy and the effect of the introduction of other powerful telescopes, that did much to engage the interest and sustain the efforts of the astronomers. (Smith, 1989)

HST project was not only initiated by astronomers but was also once saved by the astronomers. In 1974, the funds for the HST project had been denied by the Congress. In response to this, a nationwide lobbying effort was coordinated among astronomers. Many astronomers met congressmen and senators in person, and large scale letter-writing campaigns were orgainsed. The National Academy of Sciences published a report emphasizing the need for a space telescope, and eventually the Senate agreed to half of the budget that had originally been approved by Congress (Smith, 1989).

The initiator of mega projects is always the one who is interested and good at it. One of the earliest proposals for a tunnel linking France and England was presented by a French mining engineer named Albert Mathieu to Napoleon in 1802. The engineer, however, did not play the role as astronomer played in HST project. The HST is a scientific instrument which makes a huge contribution in astronomy research, however, which has limited contribution to people live on the earth and economics. This is probably why the HST project was struggling to get support from the government and in contrast government played a key role in the Channel Tunnel project.

The governments on both sides of the Channel were interested in building a fixed link. Such a big project would not only bring benefits to transportation, trading between the nations but also supporting local industry and employment. The two leaders might have been poles apart politically, but both recognized the great potential electoral benefits of the Channel link because of its high profile, futuristic image and its job-creating potential (Anderson & Roskrow 1994). The governments, however, have their own concerns, cost and national security. In the 1870s construction actually started on the British and French coasts with a view to building a railway tunnel between Folkestone and Cap Gris-Nez. But the British, as they did 100 years later, called a halt, worried about the security implications (Anderson & Roskrow 1994).

Cost was not a concern to British government anymore because the project was agreed to be a private funded project. Such a funding scheme was impossible on HST project, no one would like to fund a space telescope except the Government because it would not bring much financial profit. After World War II, U.S. Government became the chief sponsor of the scientific enterprise, that shift brought with it not only more money but also new obligations and a new political framework within which scientists had to work (Smith, 1989).

Hence, because of the need to win government patronage, winning approval for the telescope was an intricate process (Smith 1989). The funding battles of the mid-1970s had led NASA manager to develop a low-cost approach to build the Space Telescope. Given NASA’s pessimistic view of how Congress and the White House would respond to the prospect of funding the Space Telescope, the low cost was regarded by the agency as essential (Smith 1989). Thus, we have a vivid illustration of how the telescope’s dependence on government patronage and the political context in which it was initiated. NASA, the White House, and Congress in fact gave their approval for the telescope for reasons much more than simply the quality of the science the telescope’s supporters promised. For example, to promote international ties, to strengthen the scientific/technological base of the United States, to help maintain the capability of the Marshall Space Flight Center, to provide employment in the districts and states of many congressmen and senators, and as part of a major initiative in the Ford presidency to promote the development of basic research (Smith 1989).

Starting in 1975, with the coming of the Ford presidency, federal funding for basic research, after having declined for a few years, resumed the upward trend that has been characteristic of U.S. science policy since World War II (Smith 1989). That boost in funding sat excellently with NASA’s proposal to build the Space Telescope, and the telescope was seen in the Ford administration as a fine example of the kind of science program that was worthy of support. Therefore, with a different White House and another set of policies, the telescope program might never have gotten into gear (Smith 1989).

The design of the Channel Tunnel is not limited by the government because of its sponsor were all the major banks in two countries. Banks played important role to initiate the Channel Tunnel project. In 1982, two British and three French banks formed the Franco British Channel Link Financing Group. They were responding to the French and British governments’ worries about the likely cost of the project (Anderson & Roskrow 1994). After one and half year, they published a report stated that the project could be funded by private money and proposed two financing methods. The job they have done gave the idea of a fixed link a crucial boost.

The reason that banks gave strong back to the project is obviously, financial return. Dislike the government funding project, the fund of the Channel Tunnel is a loan. The operator Eurotunnel will have to eventually pay back the money to the banks, with more interest. However, like the HST project, the Channel Tunnel project still has done things to make banks happy. Just days before the concession agreement was signed, the Channel Tunnel Group (CTG) announced that Sir Nicholas Henderson’s replacement as chairman would be Lord Pennock. It was a choice designed to please the banks and the City of London (Anderson & Roskrow 1994). But the banks have kept faith. During the difficulty time while Eurotunnel had financial difficulties and huge dispute with its contractor, the banks continued to grant waivers and extensions to Eurotunnel.

Contract Arrangement

The HST project was the most costly and challenging science technology project managed by the United States space agency NASA, with contributions from the European Space Agency. Because of the project’s complexity, thousands of people divided into many interlocking and multidisciplinary teams who would design and construct the Space Telescope. (Smith, 1989) In addition to NASA Headquarters, there were two NASA field centres intimately involved – the Marshall Space Flight Centre (MSFC) and the Goddard Space Flight Centre (GSFC). MSFC was given responsibility for the design, development, and construction of the construction of the telescope, while GSFC was given overall control of the scientific instruments and ground-control centre for the mission.

NASA were to use associate contractors for LST, there were one Optical Telescope Assembly (OTA) and one Support Systems Module (SSM) associate contractor. MSFC was selected over GSFC to act as overseer and ensure that all the parts of the telescope fit together correctly. Associate contractors would also mean a more elaborate management structure than with a prime. The major advantage of such arrangement is cost saving than prime contractors as the agency would not have to pay a fee to prime contractor to manage the other contractors. But possible cost savings were not the only benefit from using associate contractors. If a prime contractor were to be used, this role would be played by an aerospace company. If so, an optical company would be subcontracted to the aerospace company to construct the OTA, which means that in the bids for the contracts, two aerospace companies would be paired with the two optical houses. The other aerospace companies that had not been so paired would then be cut out of the competition, hence less competitive for bids.

NASA approved Perkin-Elmer (PE) to build the OTA, including the fabrication of the primary and secondary mirrors. Lockheed Missiles and Space Company (LMSC) were selected to develop the SSM. NASA later claimed that the biggest factor in Perkin-Elmer’s success was the company’s proposed “Fine Guidance System”, which was essential to LST. On the other hand, LMSC had little expertise on astronomy satellites, both firms were very experienced with military satellites and had worked together on the KH-9 reconnaissance satellite. (Dunar, 1999)

The biggest challenge for NASA/MSFC in such contracting arrangement was how to manage these two major contractors should interact with each other. The contractors had their own particular ways of doing business, and it would take a while for NASA to get to know the contractors working on the telescope and for the contractors to get to know NASA. (Smith, 1989) Furthermore, MSFC had a “cap” on the manpower it could employ on the Space Telescope, with the number of only around 100. It is almost impossible to manage such complex project by limited number of project personnel.

The contracting arrangement used in the Channel Tunnel project was a bit different. The winning bidder, CTG and France-Manche, was a private consortium of 15 British and French construction companies and banks. When the concession agreement was signed, CTG and France-Manche began the process of merging, creating Eurotunnel with Lord Pennock as chairman. The Eurotunnel would be the owner of the Channel Tunnel and hence the holder of the concession (Anderson & Roskrow 1994). Eurotunnel was basically playing a project manager role, which was given the job of raising finance, managing contractors and running the tunnel for a profit after it had been completed.

To build the Tunnel, Eurotunnel would also let a design and build contract for the tunnel to Transmanche Link (TML), TML is a huge partnership that involves five British and five French contractors that originally founded the CTG and France-Manche. All of those independent contractors have the extended experience of tunneling thousands of kilometers. The contract involved not just building the tunnels but designing and installing a complete railway system. The idea was that all that Eurotunnel would have to do would be to take delivery of the completed project in just over seven years’ time and test it ready for the opening a few months later (Anderson & Roskrow 1994).

The project was supervised by the Intergovernmental Commission (IGC), on behalf of both governments to ensure the Eurotunnel’s compliance with the Concession. This party was in charge of the reviewing design, procedures, specifications and in particular issues related to environment, operation and safety of the tunnel.

Project Financing and Cost

The HST project is a government funded project. Since World War II, the federal government became the chief sponsor of the scientific enterprise, however, the government agencies that channel most of the funds to them cannot meet their desires, and the costs of the numerous potential and worthy programs always outstrip the available money. It is a complicate process to get budget approved by the government for such a large space telescope project. Given NASA’s pessimistic view of how Congress and the White House would respond to the prospect of funding the LST, the low cost was regarded by the agency as essential. NASA estimated that $700 million was the cost to build the LST and hence the telescope was projected to be the most costly scientific instrument ever built. (Smith, 1989, P87)

On top of the reasonable budget that has been provided by NASA, scientists had to convince Congress and the White House that large amount of taxpayer’s money is wisely spent. Therefore a massive lobbying campaign was then conducted by astronomers by persuading their patrons of the telescopes’ worth. It has been discussed in Stakeholder part that how the LST’s dependence on government patronage and the political context in which it was initiated, including the existing set of NASA’s own institutional interests, were exceptionally important in shaping the design of the program as well as the telescope itself. For example, if the budget was not a problem, a three meter LST would surely have been built.

The budgeting issue was not only at beginning of the project, but also throughout contracting period. The contracts for the Space Telescope were of a type known as “cost plus fee”. (Smith, 1989, P260) NASA would therefore pay whatever it cost to construct the telescope. Whin a few months of the start of Phase C/D and due to various renegotiations of the contract for the Optical Telescope Assembly, Perkin-Elmer’s contract had already been adjusted by $22.4 million to a total of $91.8 million. (Smith, 1989, P261)

It is clearly that the funding battles of the mid 1970 had led NASA to develop a low-cost approach to get project funding approved by the Congress. This would be one of the causes that impacted on cost increasing. In addition to the low estimated building cost, unrealistic technical expectation had been fostered when the telescope was being sold. The claim by NASA of the mid-1970s that the technology to build the telescope was well understood and was within the state of the art crumbled under the pressure of a taxing design and development effort. (Smith, 1989, P388)

Not surprisingly, because of the complexity of the technology, the contractors’ low bid, the poor project management, NASA faced a series of budgeting issue throughout the project.

The Channel Tunnel project is different to the HST project, it is the largest privately funded project in history. It was clear from the beginning that the two governments would not get involved in the funding of the project as this was the only basis on which Margaret Thatcher, British Prime Minster, would approve the project.

Funds have been raised through equity raising in capital markets and loan agreements. The first, called Equity One, would be worth £50 million. This would be initial money and would be put in by the founder shareholders of CTG and Franch-Manche, the ten construction firms and the five banks (Anderson & Roskrow 1994). In October 1986, Equity Two, a private placement of £206 million was arranged. The money is to ensure that the contractor TML had enough to pay its bills (Anderson & Roskrow 1994). Eurotunnel intended Equity Three to raise around £750 million, but its significance was far bigger than the cash it would raise, for if it flopped, the banks had said their loan agreement would automatically fall (Anderson & Roskrow 1994).

Eurotunnel had successfully arranged £5 billion loan from 50 banks worldwide in August 1987. An important clause in the 1987 loan agreement stipulated that the project had to be fully financed to completion. This was to have significant impact later, as subsequent cost overruns made it necessary for Eurotunnel to increase both equity and loan capital beyond the combined £ 6 billion which had been raised by the end of 1987 (Anderson & Roskrow 1994). It was bank which control finance at each stage, by monitoring construction before allowing Eurotunnel to draw on its agreed lines of finance.

With a final cost of around £10 billion, the Channel Tunnel project is over budget for more than 80%. Large construction project in general are notorious for cost and schedule overruns and the Channel Tunnel is no exception. There were different reasons that caused cost increases.

One of the obvious reasons that cost kept increasing was construction initiated before design completion. When the decision was made in 1984 to open the project to bidders, very little time was allowed for detailed design studies in advance of construction. The Channel Tunnel was meant to be open for operation in May 1993. This meant that the project was to move from design consideration to completion in about 8 years. The detail design such as the power, ventilation, cooling and signaling systems had never been pinpointed (Anderson & Roskrow 1994). Without this information the 10 contractors had put a price on the installation of fixed equipment which never had a chance of being close to the correct sum. What is surprising is that the banks missed this point when they began funding the project (Anderson & Roskrow 1994).

Another reason is similar to the cost increase in HST project, which is low bid. That is the competitive pressure that prompts bidders to cut their cost estimates in order to make a successful bid. This is quite common in any of acquisitions. Contract arrangement is one of the reasons as well. Eurotunnel had one contractor from beginning to the end, which was TML. The companies in TML were all experienced contractor, they know their bargain point. Eurotunnel cannot earn a cent on its investment until the Tunnel is operational, which means schedule to Eurotunnel is more demanding than cost overruns. A better approach for contracting arrangement might have been for Eurotunnel to let a series of contracts for separate sections of the work.

The adequacy of dispute resolution

Conflict of interest happens in almost every project, the HST and the Channel Tunnel projects are not exceptions. As identified in contracting section, NASA utilised the associated contract approach with industry for the design, development and construction of the Hubble Space Telescope instead of a prime contractor arrangement. This contracting arrangement allows NASA to act as a prime contractor to maintain oversight and control of the project. However, NASA is a huge organisation which has too many commitments and therefore two NASA centres, Marshall and Goddard were called to manage and develop the project.

Thus, the first project management issue was brought out as conflicting happened within the project team. Marshall and Goddard had worked badly together in Phase B and the relationship was still poor in 1977. (Smith, 1989) The reason behind the issue was that Marshall was selected over Goddard to manage the HST project. Goddard preferred to work directly for NASA headquarters, not for another centre, in this case Marshall. That was because Goddard had numerous professional astronomers and superior experience with astronomy satellites. In contrast, Marshall had less experience in optics and astronomy. (Dunar & Waring 1999) But for Goddard to have reported directly to headquarters would have undermined Marshall’s control over a project for which Marshall was ultimately responsible (Smith 1989).

Nevertheless Marshall had advantages. Goddard had too many commitments and too few people and so its director did not support the new project. Marshall, in contrast, had too many people and too few commitments (Dunar & Waring 1999). Moreover, Marshall leadership had become enthusiastic about the HST.

It was impossible for project to be progressed without solving the conflicting issue. NASA headquarters had rewritten the memorandum of agreement between Marshall and Goddard, whereas Marshall would have overall authority for the telescope, Goddard would be responsible for the scientific instruments and the operations for the Space Telescope – responsibilities constituting a sizable chunk of the whole program. (Smith, 1989)

Another big conflict in HST project was between NASA and the Space Telescope Science Institute. Soon after its establishment in 1981, the Institute and NASA had come to distinctly different positions on the appropriate size and scope of the institute’s activities (Smith 1989). They also had different view regarding the institute’s size and manpower. NASA, Headquarters, whose telescope managers lived every day with the severe financial constraints on the program, was disturbed because it believed the Institute was growing too rapidly (Smith 1989). NASA also concerned that there had been excessive growth of staff and funding at the institute, and appealed to the self-interest of the astronomers by contending that extra money devoted to the institute would have to be siphoned away from NASA space budget.

Another dispute between NASA and the institute was the Science Operations Ground System (SOGS), which was the complex system to enable the institute to plan, schedule, and perform observations with the scientific instruments aboard the telescope. It was argued that NASA to hand management responsibility for SOGS to the institute during the contract period. Hence the institute was assumed responsible for the SOGS functions.

The dispute was solved until the Space Science Board entered in May 1984. The Board emphasised that the Institute should be of sufficient size, in facilities and staff, to carry out its functions, but should not become so large as to absorb an inordinate fraction of the resources devoted to astronomical research (Smith 1989). Then NASA and the institute were able to establish what both sides would come to regard as a reasonable working relationship.

Dispute issue on the Channel Tunnel project is just as complicate as the HST project. Eurotunnel was not happy about the contractor TML because of the project schedule. In the last week of August 1988, Eurotunnel formally notified TML that it was failing to meet the agreed project schedule. The delay meant that TML was liable for substantial financial penalties (Anderson & Roskrow 1994). Though it was not TML’s fault, not 100%, as discussed already, the bad ground condition had not been picked up by the geological surveys, TML had to modify the boring machines to dig through wet chalk. TML had no interest in the project finishing late, any more than Eurotunnel did. But it did know that late completion would hurt Eurotunnel more than it would hurt the TML member contractors. More than anything, Eurotunnel – with banks on its back needed trains running through a completed tunnel and money coming in to start paying off its debts (Anderson & Roskrow 1994).

Moreover, what really bothered Eurotunnel was not just the construction delay but also how TML was being managed (Anderson & Roskrow 1994). It is very difficult doing a job with two contractors joint venturing. It’s nearly impossible with three unless one is appointed the lead contractor. But when there are ten together with equal authority in two different language, it’s very difficult to sort out. One of the key management issues that TML had was safety management.

The safety management issue was brought on the table when Andrew McKenna, the first man to die on the Channel Tunnel. At one point the tunnel was losing a man every two months in tragic circumstances. At this time workers were accusing TML of “push, push, push” to get the project finished at the expense of safety. TML did have safety induction course in place, however, the difficulty was in spreading the awareness of the dangers to every one of the thousands of people who worked on the tunnel (Anderson & Roskrow 1994).

The Health and Safety Executive (HSE) began a major audit of the project’s safety procedure, which TML insisted were in order. The problem, which TML recognised, was getting the workers to abide by the rules (Anderson & Roskrow 1994). The HSE soon had an outcome from audit with a report. The report said that more than half the management had not attended the induction course and that the managers were not held individually responsible for health and safety. Management was also criticised for not attending safety meetings or showing positive attitudes towards safety and health. TML scrapped its safety management system and, on the advice of the HSE and under the American influence of Jack Lemley, introduced an American-style safety system to the site (Anderson & Roskrow 1994).

TML also had its own concern and disappointment. The main worry for TML was the lack of design information coming from Eurotunnel on key areas of the mechanical and electrical work. Without this information TML was struggling to plan properly its procurement and site work, and this would eventually lead to inefficiencies on site that would cost money (Anderson & Roskrow 1994). This problem was at the heart of the dispute over costs between Eurotunnel and TML at the end of 1989. TML argued that the cost increase were chiefly due to deficiencies in the initial design and cost estimates. Eurotunnel maintained they were due to TML inefficiencies in following a perfectly satisfactory design.

In January 1990, TML announced it was taking Eurotunnel to court in France because it had not been paid its monthly account ( Anderson & Roskrow 1994). The dispute issue between the client and contractor finally reached its peak point. The greatest civil engineering project in the world was on its knees. Eurotunnel was somewhat in a difficult situation, they need money from bank to pay TML, but without TML’s signature the banks would still not release the money to Eurotunnel. In order to restore the bank syndicate’s confidence, Eurotunnel was forced to revise its contract with TML and seek additional equity and loan capital.

Agreement had been reached between Eurotunnel and TML on most, but not all cost disputes. The new agreement not only greatly exceeded what had previously been thought a maximum financing limit, it was based on a lower Tunnel specification. Eurotunnel had to accept lower speeds through the tunnel for trains and shuttles, open rather than closed truck-shuttles, a less glamorous Tunnel portal on the French side, and so on (Anderson & Roskrow 1994).
Why the selected project are considered to be successful, or otherwise

The Channel Tunnel project has been completed a year later and at more than double the original cost. All in all, that the Channel Tunnel project management was not very effective. However, I still consider the project is successful. What Eurotunnel and TML did – without help from the governments – was build a scheme which will benefit Europe as a whole. The Channel Tunnel was constructed in order to have a cheaper and faster transport connection between UK and France and finally improve the living standards of European people. Therefore, the project is considered as successful.

The project can be considered a failure if we take following aspects: it lost 6 months revenue due to delay in opening; cost more than double the original budget, huge dispute with the contractors and killed 10 men. These project management issues have left a valuable lesson to the future complex projects. 1. Better to have sufficient government support. If it is possible, the government should be involved as a key stakeholder, not only for the money but more importantly the political influence. At least, the project should keep close communication with the government. 2. Detail design before construction. One of the reasons that the project had cost overruns was because there was no detailed design in place before digging into the tunnel. A detailed design would help correctly estimate total cost and a comprehensive risk management plan. 3. Coordinate with key stakeholders and contractors. A clear and frequent communication between contractors and client is necessary. If the communication was effective in the Channel Tunnel project, Eurotunnel would have known the project issue earlier and be prepared with solutions. 4. Risk and Safety management. Safety management is not just about an induction course, it is everyone’s responsibility to ensure the workplace is safe, especially at construction site.

The Hubble Space Telescope project is considered to be successful as well from many aspects. Although not the first space telescope, Hubble is one of the largest and most versatile, and is well known as both a vital research tool and a public relations boon for astronomy. Frankly, it has its own problems through the project life. The problems include: contract arrangement, program design, political issue, quality control. But in the end the HST has made murmurs great astronomy achievements in the history. HST’s successor James Webber Space Telescope is under manufacturing and I believe NASA has learnt valuable lessons from the HST project to build the next generation Space Telescope.

Reference

Allen, Lew “The Hubble Space Telescope Optical Systems Failure Report”, National Aeronautics and Space Administration, 1990, P10-1

Anderson, Graham and Roskrow, Ben “The Channel Tunnel Story”, E&FN SPON, 1994

Dunar, Andrew and Waring, Stephen “Power to Explore: A History of Marshall Space Flight Centre 1960-1990”, 1999

Smith, Rober W “The Space Telescope – A study of NASA, Science, Technology and Politics”, Cambridge University Press, 1989

The Hubble Project http://hubble.nasa.gov accessed on 27 Oct 2013…...

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