TNAG-2254-FCO40-3238-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-gene-1991 — Page 115

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The

Second, the Channel Tunnel project has proved yet again that time should first be spent on planning, on design, and on mobilisation of resources and logistical support. Such time spent yields a gain in time and money later to the project. 10 contractors who promoted this great project were under pressure from their own excitement, from bankers to the project and from their own bankers, worried about their pre-funding of early work, back in 1986. They therefore launched into construction and into prospectus issues for funds after spending only £45 million, under 1% of then predicted project cost. principal causes of the forecast overrun since then are:

The

a 50% overrun, at constant prices, in tunnelling costs an even bigger percentage overrun, though smaller in money terms, in rolling stock and certain related control and safety equipment.

The tunnelling cost overrun is the less forgivable - it comes down to design, to management of mobilisation, and to investment in logistics. The rolling stock-related overrun ought to have been less with more time for planning and design and cooperation with suppliers.

as

On the other hand - momentum is all-important. Get started and keep going somehow you will overcome the difficulties, we are doing. The best answer, as always, is in the middle - more preparation will probably give more momentum later so that the main cash outflow on the project is later, with consequent savings on accrued interest.

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