MANAGING AN INTERNATIONAL CONSORTIUM

It appears from Appendix B that substantial parts of the fixed link have been built by international consortia. The East Bridge superstructure represents an exception to this general rule which as indicated was strongly encouraged by the client’s early procurement policy. In this section aspects of project management in an international organisation will be reviewed. Politically as well as strategically the East Tunnel project played an important role in the fixed link because it was a central element in planned time-lagged link - a completion by stages in order to give an initial three years advantage for train traffic (see above). Technologically the tunnel project required a considerable innovativeness as tunnelling through soft and heterogeneous ocean subsurface layers was practically untested at that time. Tenders for the East Tunnel were submitted to A/S Storebæltsforbindelsen in June 1988 and based either on a bored or immersed tunnel. MT Group was awarded the contract on its proposal for a bored solution. The client referred to economic as well as environmental criteria leading to his choice. In early negotiations about the contract it was laid down by the client that tunnelling should take place simultaneously in two tubes from both Zealand and Sprogø. Consequently four tunnel boring machines (TBM) were to be procured. Scottish firm Howden was chosen as supplier of the TBMs, based on Japanese technology, because only this company offered a very short period of delivery. MT Group is a true international joint venture, with the distribution of the partners’ capital investment as shown in table 5. Thus from the beginning Monberg & Thorsen was appointed sponsor of the consortium. Although established on M&T’s initiative during the tender preparation phase the role as sponsor obviously became a sensitive issue as the project evolved and technology problems started accumulating. member nationality share % Monberg & Thorsen Denmark 24 Campenon Bernhard France 19 SOGEA France 19 Dyckerhoff & Widmann Germany 19 Kiewit Construction Company USA 19 Table 5 : MT Group It could be argued that the JV-formation process at this early stage had been determined by pragmatic considerations and perhaps even by the casualties of a busy period in which the main concern of all major Danish contractors and their international companions was to get in a favourable position for submitting tenders rather than focusing on the specific planning and management properties inherent in the single projects tendered for. However, at a formal level nothing seems to indicate that the different firms in MT Group were not technically qualified for the JV-partnership - M&T had at earlier occasions performed successfully with all members and not least the French and German firms possessed recently updated knowledge of tunnel boring. Nevertheless - as mentioned - the management functions of the newly established JV organisation were not resistant to the internal and external pressures which inevitably will accompany unforeseen incidents during execution. An important task for a sponsor in a JV is to ensure progress in the first critical period of a project, i.e. during the organisational running-in phase. However, even the critical delivery conditions for the TBMs mentioned above caused substantial delays. Functional defects on the machines subsequently increased delays in the production plans - in October 1990 estimated to be 9 months behind schedule - and disputes between MT Group and A/S Storebæltsforbindelsen were a fact. This early project situation is best characterised by inconsiderate client requirements, insufficient specifications from MT Group, and lack of quality control within Howden’s production. Only one year and minor progress later, however, the project was struck by the first of several really spectacular disasters: a water burst from the seabed found its way through the TBM-head which had been left open due to modification works. Both 300 m long drives at the Sprogø site were instantly flooded and the two TBMs seriously damaged. On the political level this incident resulted in a questioning of the integrity of the bored tunnel project, and requests for a reconsideration of alternative solutions were put forward by the political monitoring group. But renegotiations on the fulfilment of the contract between the client and MT Group eventually led to a resumption of operations. The two parties agreed on a splitting model for the expenses incurred but also on an expanded project economy as well as revised scheduling and organisational provisions. As an element of this restart and in order to upgrade its supervisory capability A/S Storebæltsforbindelsen recruited tunnelling expertise from the Channel Tunnel project. The client accordingly assessed MT Group’s organisational performance as being poor in particular concerning the building-up of an efficient site team. As from the start the competence of the organisation in relation to the specific technology management issues had appeared to be low also "the learning curves" developed much too slowly. The manning, for instance, of the four TBMs was characterised by a turbulence which was impeding the development of routines and efficient co-operation in the individual teams. Characterising the reorganisation of MT Group, imposed by this project turn, was consequently an attempt to comply with such assessments. The project management function (held by the French firm Campenon Bernard) was reinforced by a project director from the same firm. This additional level represented a strong liaison with the board of the joint venture which (incidentally!) at the same time was undergoing a sponsor change due to a merging of Campenon Bernard and SOGEA in France. The Danish firm M&T, from that time, was left in a secondary role and received the deputy manager function. Although from a formal perspective this reorganisation is appearing to be quite radical it is obviously not perceived as such by its actors - or rather, it is precisely of a formal nature, reflecting external claims and pressures from client and parent firms. On the informal level, however, it seems likely that MT Group already at that time had worked up a modus vivendi as an independent organisation, having passed through a year-long team building process. Some circumstances even indicate that the technological and contractual problems experienced by the MT Group throughout the initial project stages had rather hardened the temporary JV organisation and led to a strengthening of the actors’ perception of project completion as a joint concern. Thus two main precautions obviously proved valuable for the "new" MT Group’s relatively successful performance during the remaining project stages: MT Group developed a hitherto quite unforeseen "public relations" profile as part of its technology management concept. The effect of openness was evidently rehabilitating the image of MT Group and making the handling of the spectacular technical problems an almost nation-wide, common concern! Breaking the client’s monopoly in relation to the press furthermore changed and balanced the "interpretation" of project complexities, eventually leading to better collaboration with the technical experts in A/S Storebælt. The reorganisation of the MT Group brought decision processes in better accordance with social constitution of the JV, i.e. the variety of local social constitutions anchored in different national contracting systems was reduced during this process. Several changes in the manning of the organisation contributed to this rationalisation, most important the merging of the two French participants in the JV. One of these was characterised as a traditional, mainly domestic oriented firm adherent to centralised planning and limited delegation of responsibility, whereas the other French partner is an experienced international contractor with a more "diluted", global managerial concept. During the JV reorganisation staff from the former was replaced with staff from the latter, apparently giving room for the implementation of a more consensus-oriented, "hybrid" project management style, thus facilitating problem solving and co-operation within MT Group. Seen in the light of the immense technical challenges experienced on the tunnel project it is now broadly recognised that the MT Group produced remarkable innovative and operational results during completion of the project. However, the overall project economy and time overruns remain disastrous. Within MT Group as within the other observed international consortia at Storebælt the organisational ability throughout the first critical existence of the JVs is striking. While the JV organisations almost occur to become operational by chance their parent firms do not appear to have management and organisation implementation strategies ready when they enter into international collaborative constellations. As demonstrated in this case, these deficiencies could, for instance, be rectified through application of a distinctive technology management programme concept within the joint ventures - a capability which should be integrated within the client’s contractual provisions.