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A Portfolio will be prepared on the management of Civil-Project. Aspects such as the Health & Safety, Environment management, Quality management, Financial & commercial management and Human Resource management will be explained in details. A case study will be taken up to provide sound support to the aspects mentioned above. The said case study chosen for the purpose is the famous Channel Tunnel.
The channel tunnel is the largest engineering project to be privately financed till date. The channel connects Folkenstein, Kent, United Kingdom to Coquelles, Pas-de-Calais, France covering 32 miles approximately. The project cost was around $14.7 billion or £10 Billion according to the Bechtel Corporation, one of the companies hired by the Eurotunnel to complete the tunnel as they faced completion problems after the inception of the project. This channel has three tunnels which are interconnected, while two on the either sides are used for the rail systems, the one in the centre is used for maintenance, passenger evacuation and fresh air supply. The project faced many problems such as financial problems, technical woes, schedules which were never fulfilled and public battles between Eurotunnel and its contractors. In spite of all this the project was completed in 1994, after it was initially thought of as early as 1802.
Figure : Channel Tunnel Exhibit in National Rail Museum, York
HEALTH, SAFETY AND ENVIRONMENT MANAGEMENT
For a business firm to sustain itself in the field of civil project development, it is utmost important for it to have an impeccable record in Health, Safety and Environment commitment and policies. It is so because, it affects contractors, its employees, its reputation and hence its stakeholders. Health, Safety and Environment (HSE) Management may cover these broad fields:
Safety coordination during various phases such as design, fabrication and construction
Preventive measures recommendation
Chalking out of coordination plans
Risk analysis with regard to safety of employees/workers
Deployment of health and safety plans
Access controls for designated areas
Control of personnel protection equipment (helmets, gloves, shoes, etc.)
Safety signaling control
Periodic auditing and special reporting about the non-conformities in the system
Training for management, supervisory and execution personnel of subcontractors and visitors
Conforming to the Environmental and legislative regulations
Safe transportation of Hazardous material
Table : Nonfatal Occupational Injury and Illness Incidence Rates (per 100 full-time employees)
Agriculture, forestry, fishing
Trade, Transportation and utilities
Table : Fatal Occupational Injuries in Construction, 1997 and 2004
Contact with objects &equipment
Exposure to harmful substances and environments
Source: U.S. Bureau of Labor Statistics, Occupational injuries and Illnesses in the United States by Industry, annual (Bowker &Liebermann, 1972)
As the Table 1 illustrates, the construction sector shows very high rate of injuries /illnesses and hence lost workdays than in virtually any other industry. These injuries and illnesses prove to be exceedingly costly in times of rigid schedule. As quoting from Engineering Statistics, (Bowker & Liebermann, 1972)
"The Construction Industry Cost Effectiveness Project estimated that accidents cost $8.9 billion or nearly seven percent of the $137 billion (in 1979 dollars) spent annually for industrial, utility and commercial construction in the United States."
This includes direct costs (medical, workers' compensation premiums & benefits, liability losses & property losses) as well as indirect costs (like reduced worker efficiency and productivity, project delays and equipment damage). In such scenarios, innocent bystanders may also get. Hence such incidents have to be kept under check. Table 2 provides information about various incidents which might happen at a construction site. It provides basic information about how the precautionary measures must be directed for a civil project as keeping the workers well informed and providing them with good safety equipment will reduce more than half of these accidents. E.g. Harnesses must be given when risk of falling is there.
Leadership: An emphasis was placed on developing skills among supervisors to encourage them to challenge unsafe practices and to actively encourage the workers to get involved in various health and safety programs.
Safety Briefing Workshops: Such workshops were attended from directors to workers so as to develop good co-ordination and communication among the workforce. These included safety inductions, presentations, and briefing sessions, site tours to give all sorts of information required by the workers to work effectively and safely.
Figure : Such a briefing workshop is going on regarding crane at site
Communication: programs such as Safety Task Analysis Risk Reduction Talk (STARRT) which was a pre-task briefing which enabled workers to converse with their supervisors regarding safety issues related to the day's work and the associated control measures. And The Target Zero Truck which was suggested by the workers it visits different sites with updates on safety and health issues. It was equipped to handle video conferencing to enable the workers to get in touch with their supervisors. Target Zero was taken up so as to make avoid any loss of worker's life.
Rewards and Reports: Updates and alerts were swiftly provided. Near miss incident were made easier to report with lesser paper work and rewards were provided for safe working practices.
Respect the Environment: this was the motto of this project. No marine life was disturbed in the process as it was underground project. Chalk extracted from excavation sites were disposed off in friendly manner in Shakespeare Cliff, UK.
Figure : Disposal site at Shakespeare Cliff, UK
Eurotunnel setup an Environmental Management System (EMS) to continually monitor the environmental performance and controlling impact of its operations. This was done by optimizing the management of waste (customers also included), of water and optimizing the power consumption. Eurotunnel has also supported the local environment by keeping noises /nuisances under check as far as possible.
The EMS system is based on the requirements of ISO 14001, which is a recognized standard for the setting up of environmental management systems. Eurotunnel for it efforts has been acknowledged numerous times including featuring in FTSE4Good Index, the ethical stock market index.
In spite of this 10 workers lost their lives during this project. (8 British and 2 French). While one died after being caught between huge concrete lining segment and the tunnel boundary wall. 3 others were killed by the trains carrying back-forth construction material.
(Anderson et al, 1994)(Eurotunnel Environment Report, 2003)
Decisions taken during planning and designing stage regarding the standards to be maintained during the project's life-cycle can be described as the Quality of that project. These decisions can be according to the initial requirements/ demands, social & political laws and cost limits. Hence Quality control refers to the conformance to these set of standards. Quality management can be taken as sum of Technical, Operational and Project related aspect management. These are managed by a Quality Management System (QMS) which must adhere to some set standard like ISO 9001:2000. Quality assurance (QA) certification is provided for the QMS system by Government agencies to assure the investors of the organization's claims. (Govt. of NSW: QM Guidelines, 2005)
The technical aspect of quality management can be defined as conforming to the rules/standards set in the contracts. These contracts provide the general skeleton on how to run the project and hence can be described as its technical side. Activities and knowledge pertaining to an activity should not be confused here as it will be considered under the operations management.
Contracts, though often changed to reach a mutual agreement carry certain common features and use fixed industry standards such as the ones drawn by UK Institution of Civil Engineers (ICE) or International Federation of Consulting Engineers (FIDIC). These contracts have different structure and content based on different scope and type of project. These will include specifications, directions and instructions to employer, tenderers, employee and contractor. Bill of quantities along with schedule of work may also be present here but these can be modified. However, a defect correction period and a performance bond are present to keep the employers interests safe. Auditing is carried out from time to time and any violations or straying from the contracts is dealt harshly. (Hendrickson, 2000)
Almost all big projects have problems related to this aspect of their quality management. These are generally encountered with delays, cost escalations and recriminations. And this so happens because the project is vaguely conceptualized or the full implications of it are not realized in this crucial phase. This might not work in the favor of the organization in most of cases hence, must be dealt correctly and carefully.
Figure : Graph showing escalating cost of rectifying work at each stage (Thorpe, 2004)
As the figure shows it is much easier and less expensive to take things into account and make changes in the design stages as costs spirals out during the later stages. The reasons which might lead to a sudden need for rectification are lack of adequate of field research, poor planning, incomplete specification and inadequate training. Hence, in order to successfully manage and complete a project within the stipulated time following steps can be taken:
Right person must be chosen for the right job i.e. workers must be skilled; managers must have leadership, motivating skills etc.
They must share a sense of responsibility towards the work assigned to them.
The duties and responsibilities must be clearly and formally defined so as to avoid confusion.
Requirements must be well understood. Studies and research must be carried out appropriately to determine any unforeseen implication of any change.
Based on the requirement and research, a design blueprint must be prepared.
Planning must be done and feedback must be taken to keep the project running smoothly. Activities which are planned must be coordinated and monitored as part of the feedback system to make sure objectives are met.
Communication and coordination among different working and managing groups is essential.
Following these steps the management of the project is simpler and tends to give fruitful results. (Thorpe, 2004)
After the initial contracts have been drawn and planning has taken place, the work needs to be started. Operations such as leveling of the site, plane surveying, setting out of tunnels, pipelines vertical support systems should be done. Testing pits for the soil should be made for testing Rotary core drilling, light cable percussion drilling and heavy percussion drilling. As the construction is to be carried out safely, it is necessary to test the soil by moisture contest testing, in-situ density testing and compaction tests. The equipment must be checked to avoid any mishaps during the operations.
To run the operations smoothly, the roles of employer and the managing engineer are very important. Following steps are important from operations 'perspective:
Any contract related ambiguity should be worked out as they set the guidelines.
Any design specifications required during the construction process.
Taking decisions on any unforeseen project scenario.
Maintaining an internal audit/check system to keep the progress according to the contract/specifications. Employer can keep a check on this process by having his own people inspect the progress and audit system.
Working out any planning process, certifying completion of some activity and keeping records of any claims made by workers, contractors etc.
Deciding on any coordination disputes or communication lapse.
These are generally along with financial power are segregated to keep the work from becoming piled up and to prevent misuse of power. (Hendrickson, 2000)
Quality Management System & Quality Assurance
Quality Assurance (QA) can be described as an instrument for ensuring that the construction process takes place according to a Quality Management System (QMS). This means that the QA system defines the structure, duties and responsibilities for implementing a QMS. Hence, having a QA system in place provides satisfaction to the employers about the continuous striving for success and perfection by the organization.
Considering that the initial idea was put around 1802, general consensus could only be reached around 1970-80s. The technicality of the issue was stuck on the issue of national security which was nothing more than a political scenario. After getting over this, it was decided to make such a big project as a privately funded project as the success of it was at question. With a consortium of private players mainly banks, a team was made which was later called Eurotunnel, which was given concessionary period of 55 years from 1987.
Project management was difficult due to the sheer size of the project. This is evident from the delays caused due differences created by the increasing need for more money. Demand for money increased from £2.3 billion in 1985 to a final amount of £10 billion around the conclusion of the project. The delay resulted in the project lasting for a decade while the initial estimate according to study around 1984 was around 4 and a half years. Design had to be changed as wet regions were found around the UK coast and need cement and concrete injection which also raised the demand for funds.
Operations were marred by lack of communication and safety issues were also forgotten. But overall the project was completed successfully and is one of its type.
A project starts with cost estimation taking into account capital cost, operation cost and the maintenance cost. Capital cost covers land acquisition, planning and feasibility studies, design both engineering and architectural, material, equipment, labor costs, insurance and taxes, inspection and testing and office overhead charges. Whereas the operating costs would cover staff wages, repair costs, renovation and other utility costs.
From management point of view things to look out for are:
Land acquisition costs are the largest among this section and hence must be well thought out.
It is also important to consider any alternative facility or operation in place of a proposed operation if the possibility of reducing overheads is present.
Certain amount must be allocated for some contingencies, this facilitates better situation handling.
Future planning is important and any estimate should be done with an eye on project's future scope.
Cost indices must be taken into consideration in case the project is of a long duration. As it is evident from the figure that the costs will rise over the years.
Figure : Price and cost indices for construction for a US based Construction Company (Hendrickson, 2000)
Estimates should be based on production function which is a relationship between construction's volume and capital/ labor. It could also be based on unit cost of quantities or based on some statistical techniques.
A plan should also be made about how this estimated amount is to be allocated during the scope of the project from one phase to another. It would be more reliable if the allocation process is based on value of work completed which can be described as the product of certain units being completed and the billable labor hours spent per unit. Then, at any stage the amount of work completed in percentage is the ratio of completed value of work to that of the entire project. It thus becomes easier to track the expenditure and trap the loop holes within it. Curve B shows the effect of rapid capital mobilization while curve A shows slow mobilization.
Figure : Value of Work Completed over Project Time
A civil project has some facilities related to it and these can be economically evaluated and financed according to the needs. Such projects have some risks associated with them such act of god, suspension of work etc and hence must be financially covered in contracts.
Once the project enters into execution phase, record keeping and feedback become important for keeping control on the project and thus controlling cost expenses. Regular accounting and monitoring are important features of this. (Hendrickson, 2000)
Operations such terminal and land surface works were bundled together while fixed equipment cost were kept separate. Service tunnel, running tunnels, lining of tunnel along with excavation phases were separately evaluated. While the costs of shuttle and locomotives procurement were kept separate. Details have been explained in the figure below.
Figure : The Construction contract in 1985 (Veditz, 1993)
The capital for this purpose was to be raised by the private sector and the involvement of the government was going to be nil. Eurotunnel which was to manage the tunnel raised the capital by issuing equity II and III share. This accounted for 20% of the overall cost while 80% of the capital was raised by the private bank in form of loans.
Figure : Cost Details for Channel Tunnel (Anderson , 1994)
Final cost of the project by 1995 was around £8 billion. Out of this chunk of capital i.e. £6.75 billion was spent on construction, equipment and the tunnel commissioning. Whereas £2.75 billion was paid as fee and interests to the lending and servicing banks. The cost increased due to unparalled engineering challenges, uniqueness of geology such as the chalk passage, state of the art construction material and rising labor & industry costs.
The contract was awarded to CTG-FM as it had simpler financial portfolio and this consortium included national railways of both the countries. And Eurotunnel was organized to raise the required capital by means of loans and equity. With the initial cost in 1985 being quoted around 1431 million pounds, there was a net 94% increase in the expenditure, making it a mega scale project of capital intensive nature. (Veditz,1993)
HUMAN RESOURCES MANAGEMENT
Civil projects are labor intensive and over the years its relevance has emerged. The management of this resource involves improvement of effectiveness and productivity by better management and supervision. It also involves continuous improvement in the workforce's skills so that they are able to embrace new technology and guidelines better. Management of this resource should cover the following aspects:
Motivation and leadership skills should be adequate to inspire and guide the workforce towards a successfully project completion.
Age, retirement and promotions should be carefully monitored. Adequate opportunities should be provided to an individual to express himself and grow within the organization.
Suitable individuals should be found to replace the aging workforce to maintain continuity in the functioning of the organization.
Working conditions should be made suitable in order to draw maximum productivity which is one of the main aims of this management. Job size and complexity should be matched perfectly to an individual. Local cultural values should be considered when a project is being carried out in foreign land.
Absentee time, early quits and loss of life should be adequately planned for beforehand. Absenteeism should be discouraged and some incentives should be provided to keep it under check.
Feedback should be taken to maintain proper skill levels.
Quality control on the knowledge, judgment, dependability, analytical ability with ability to perform under pressure & stress and safety consciousness are some of the key characteristics which should be developed and improved on. This will ultimately help the organization function better and sustain itself under testing times.
Communication should be encouraged between management and the workforce. Unions should not be discouraged. However a check should be kept on the functioning on such unions.
Leadership should be encouraged and innovation should be sort for. Incentives should be there for innovation at even the labor level. (Hendrickson, 2000)
The channel tunnel project involved around 15,000 workers. And with such a high headcount and project of this enormous size, communication and coordination was the most important factor to manage. Team work was encouraged and regular training sessions were held to update on safety issues and grant knowledge about the latest technology and equipments to be used at the site. Communication between the French and the British side were not so great but a system of conference/meeting was arranged every three month to sync with each other's progress. It later improved as the project came to its ending phase.
According to Building research establishment survey carried out in 1987on the quality problems of construction sites in Britain. And it was found that half were design related while 40% were due to faulty construction whereas 10% were due to product failing. Hence, how to avoid:
Eliminating misunderstandings of client's requirement
Using relevant and updated information
Applying quality standards
Providing adequate and proper specifications
Adhering to specifications or standards
Improper supervision may lead to poor quality work, hence avoiding it.
Lessons from the Case Study
Delay was resulted due to the involvement of only the contractors and the Banks, which resulted in mistrust.
Political hurdles in civil projects are often encountered and must be dealt the right way by generating public awareness and opinion in projects favor.
Relationships such as contractor-employer, lender-borrower must be independent.
Right people with right skills must be sought for.
A project development plan and a corporate plan for the project must be devised and managed well from the starting days.
Civil projects are generally capital intensive hence Long lead time planning is carried out. Such projects often demand use of specialized, latest and dedicated infrastructure which often makes the management work more tedious. The cost management becomes very important as underestimation of capital costs, Equipment cost and functioning cost could spiral the budget out of control. How the repayment is to be done should also be carefully forecasted.
As with the Channel Tunnel, the revenue and traffic values were wrongfully forecasted. Which resulted in late repayment of the bank loans as Eurotunnel still owes the banking consortium over £8billion, and the loss for the year ending 1995 was nearly £1bn.
And for any project to succeed safety regulations must be installed and environmental laws must be adhered to. It is also necessary that quality management system should be in place and assurance of it should be taken care of. This is because today without assurance the chances of getting some investor, constructor are very dim. To summarize, a portfolio of managing some important aspects of Civil engineering project were discussed with the help of Channel Tunnel, taken as the case study.