Reference no: EM131086579

The Big Dig

Any project that involves tunneling is risky. Any project that involved tunneling under a city whilst trying to keep that city fully operational, is very risky. When that city is bottom in the USA, it is in a risk category all of its own. This does not, how - ever, excuse the financial performance of this project, the results of which are exceptional and even make the performance of previous 'stars of disaster' such as the Channel Tunnel, look good. During the 1950s, the Commonwealth of Massachusetts commissioned new roads as part of a national road-building frenzy that took place at that time. The result was a partly elevated freeway that cut the city off from its old harbour and over time coped increasingly less well with the volumes of traffic that were trying to use it. For many years, the project had been the subject of much politicking and had been rejected by a number of national administrations. In 1993, it was given the go-ahead. At this time the budget was $US2.6 billion, an enormous sum of money for an 8-mile tunnel, but given the technical complexity of the task, this was considered acceptable. Gradually the costs rose, until in 1998, the estimated final cost was 410.4 billion. By mid-2000 this had risen to $13 billion and by mid-2001 to over $15 billion. It was still considered a technical success, but both politically and economically, it was a disaster. In project management terms it is also a disaster - a 500 per cent-plus overrun on budget can only be described as 'talented'. How did such a financial disaster occur? The first is a feature of many large 'political' projects - that the 'real cost' would not be politically acceptable. The original budget was deliberately deflated to make the project happen. The second is technical risk - that of the tunnelling process. The ground through which the tunnelling is being carried out is reclaimed land that was originally under the sea. The tunnelling process being used was also new, presenting a degree of technical novelty.

1) How might the project be considered a technical success but an economic, political and project management disaster?

2) Suggest how the 500 per cent-plus overrun might have come about.

(limit 150-200 words)