By Steve Kelman

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The Chunnel and project management

My wife and I took a train ride through the English Channel tunnel from London to Paris last night, and it was a good reminder that not only large public-sector projects run into problems.

This complex engineering project was built completely by a private, for-profit company spending its own money -- and the cost overrun was something like 300 percent. Hard, complex projects are typically hard and complex, no matter who does them. A Rand study a number of years ago concluded that, on average, Defense Department weapons projects had cost growth comparable to that of similar private projects. One difference is that the cost of Chunnel overruns was borne by shareholders and bondholders, both of whom lost lots of money.

The trip was interesting. The train was very long, and it generally went more slowly on the English than the French side, which has to do with track quality. The seats were a bit narrow. The train arrived seven minutes late in Paris, on a journey of almost two hours.

Posted by Steve Kelman on May 09, 2007 at 12:08 PM


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