Case Study Estimated Tunnel Costs for the Channel project

Source: Case 8.2, Page 318-319, Project Management for Engineering, Business
and Technology, Nicholas and Steyn, Fourth Edition, Routledge, 2012.

Before construction began on the English Channel Tunnel (Chunnel) Project, the banks
underwriting the project hired consulting engineers to review cost estimates prepared by
the contractors. The consultants concluded that the tunneling estimates were 20% too
high. Their analysis was based on comparison of costs from recent European tunnel
projects, including 50 German railroad tunnels ranging in length from 400 m to 11 km, to
the Channel, which would be 49 km in length. The costs of the tunnels ranged from 35
to 140 pounds per cubic meter (cum) of open tunnel; the cost of the Chunnel was
estimated at 181 pounds per cum on the British side of the channel and 203 pounds on
the French side (the difference owing to more difficult conditions on the French side).
The Chunnel is actually three interconnected tunnels one for trains going in each
direction, a smaller service tunnel in between them. Note, however, that the cost
estimates are per cubic meter of tunnel, so presumably, differences in tunnel lengths
and diameters are not major factors. Why might the estimates for the Chunnel be so
much higher per cum than the costs for the analogy projects? Discuss possible, logical
adjustments to the analogy tunnel project costs to arrive at the cost estimate for the
Chunnel tunnel.