Problems in Underground Construction: Lessons Learned and
Methods Developed for Success
Maria Petrov1 and Patricia Galloway2
1
The Nielsen-Wurster Group, Inc., San Diego, California, United States
2
The Nielsen-Wurster Group, Inc., Seattle, Washington, United States
ABSTRACT
As with all engineering and construction developments, tunneling and underground construction
projects require good design and thorough planning; they do not magically succeed or fail. Even
when an underground construction project is well planned at its inception, however, conditions
and requirements change during execution. The key to a project’s ultimate success is the
identification and management of risks during construction. For example, a contractor must
acquire pertinent geological data, provide appropriate machinery, and deliver adequate materials
and manpower for each facet of the work. Through a discussion of issues encountered and
Lessons Learned on four major underground construction projects, this paper explores how
owners and contractors can better identify and manage risk during construction, implement
reasonable management actions, avoid time and cost impacts, and bring a project to a successful
conclusion. It also explores how Lessons Learned on completed projects can serve as an
invaluable springboard to better success in the construction of new underground projects.
1. INTRODUCTION
Understanding the potential risks that might arise during the course of a tunneling project is an
important step in determining a tunneling project’s success. One such risk would entail the path
the tunnel will take: will the tunnel be dug through a mountain, under a city, or beneath a river?
Other risks include the earth’s composition, which must be assessed: is it entirely soil or will
there be bedrock, concrete or even water involved? Socio-economic risks must be evaluated, such
as the political environment, culture, and views of the population residing where the project will
be constructed, as well as the impacts on urban growth and development, and environmental
sustainability. In addition, the design and planning must be carefully evaluated through a risk
assessment, as they can contribute greatly to a project’s success or failure.
Through a discussion of Lessons Learned on four major underground projects, this paper explores
how owners and contractors can better identify and manage risk during construction, implement
reasonable management actions, avoid time and cost impacts, and bring a project to a successful
conclusion. This paper also explores how the Lessons Learned on completed projects can serve as
an invaluable springboard to better success in the construction of new underground projects.
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2. RISK MANAGEMENT
A successful tunneling project involves thorough planning that encompasses choosing the most
appropriate project control tools and implementing proficient design. Those key tasks are most
effectively executed through proper risk management. Ultimately, the success of a project lies
within the identification and management of risks as they occur throughout the planning, design,
construction, operations and maintenance phases. Some of the biggest risks are faced early during
the life of a project, with fewer and fewer options available to avoid or minimize those risks as
the project progresses. Even a well-planned project can be subject to risk due to changing
conditions and requirements as the project moves forward.
Risk can be defined as an unexpected event or occurrence which adversely impacts a project.
Each project has a unique set of risks. These evolve from the relationship and integration of
various project components, including the contract, execution plan, and relationship between the
parties. In most cases, risks are identified during the project’s design and construction phases. An
ideal project employs a team of professionals consisting of both project and third-party
individuals. These experts can provide both managerial services and on-the-spot analysis for
effective planning, financing, and delivery of the project.
The Project Management Institute has produced a Guide to the Project Management Body of
Knowledge (2000) and define risk management as “a systematic process of identifying,
analyzing, and responding to project risk.” The effectiveness of a risk management system can be
measured by its ability to accomplish the following:
! Cost and schedule estimates are at an acceptable level of accuracy.
! Execution risk has been identified and evaluated.
! Contract risk has been identified and evaluated by analyzing the legal requirements and
contract structure, the project delivery method and organization risk, and the scope of work
and performance standards.
! An action plan has been developed to mitigate the impacts from identified risks.
! A reliable performance system is in place to monitor the risk.
To achieve the project delivery goals and to successfully complete a project on time and budget,
owners and contractors should have a risk management system in place. The risk management
system should be systematic, simple and flexible for the entire life of a project. It must be
integrated into the work practices and methods employed by the project team. It should be
employed by both owners and contractors, and implemented at an early stage while also
providing an objective analysis. The system must be flexible and adaptable to large and small
projects. Additionally, the system must be capable of thoroughly addressing the risks on any
project. When a risk management system provides uniform procedures and techniques, the project
management team can make key decisions based upon consistent criteria. When analyses are
performed inconsistently from project to project, each analysis must be reevaluated, producing an
unreliable tool for the project management team.
For example, disputes may arise during construction when the project contracting structure is
inappropriate for the project-specific circumstances, or when one or more parties are unclear on
how to perform tasks, what task to perform or when to perform them. By cooperatively
evaluating and managing project risk, owners and contractors can maximize the return on their
investments and minimize the possibility of disputes.
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3. LESSONS LEARNED
Four major international projects, featuring tunnels as a major component, were evaluated using a
Lessons Learned perspective. Each evaluation was performed to determine if a risk management
system already in place had worked effectively, or whether a new system could have aided in
better achieving the project delivery goals and meeting the objectives of the project parties. Those
objectives included an increased return on investment, dispute prevention or minimization, and an
improvement to the contractor’s bottom line. All evaluations were performed by
Nielsen-Wurster during the normal course of business at the request of respective project parties.
3.1 Melbourne City Link Project
The City Link Project was a major infrastructural improvement undertaken in Melbourne,
Australia, to transform a congested and inadequate road network with new tunnels, urban
expressways, elevated roadways, bridges spanning major rivers, and state-of-the-art electronic
traffic management systems. The primary goal was to reduce traffic within the City of
Melbourne, and to reduce traffic congestion and travel time to and from Melbourne’s
international airport. The project was structured as a Build-Own-Operate-Transfer (BOOT)
contract. Nielsen-Wurster was requested to assist the Melbourne City Link Authority by
performing risk assessments during project execution and reviewing the project risk assessments
with senior management of the City Link Authority in order to avoid and mitigate potential risks
identified in the risk assessments.
One element evaluated for the risk assessment was the Project construction schedule as prepared
by the Engineering Procurement Construction (EPC) Contractor, which was retained by the
Concessionaire. The evaluation revealed that the Critical Path Method (CPM) schedule, which
consisted of more than 10,000 activities, was being subjected to thousands of constraints. A
Constraint is defined as a manual application of a date certain (i.e. constraint) to a specific
activity that will override any other date for that activity, which would normally be derived
through the forward and backward pass applications of CPM scheduling. It was further learned
that there was no contractual relationship or reason for the constraints.
Specific areas of risk and potential impacts from the manually applied constraints to activities on
the CPM schedule included:
! Potential risk of forcing activities on or off the critical path, which could, in turn, indicate
project delay and responsibilities that might not reflect the actual critical path or the actual
delay occurring to the project.
! Potential risk that project reporting based upon schedules with multiple non-contractual
constraints could misrepresent the actual progress and planned or forecasted dates, which, in
turn, could result in the owner being unable to effectively monitor the Project.
! Potential inability to mitigate or eliminate the impacts of issues that might arise on the
Project.
! Multiple non-contractual constraints not corresponding with International Scheduling
Practices could raise unnecessary reviews or questions, which could further divert attention
from the real issues that would need to be addressed by the Project parties.
The risk management system in place was indeed successful, as it was able to quickly identify the
constraints placed in the CPM schedule, which then served as the starting point of commentary
regarding the CPM schedule and changes that were necessary. The regular risk assessments
performed helped to avoid delays and disputes.
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Typically, tunnel construction is thought to be linear and thus, to have minimal risk variables.
Major tunnel projects, however, are often incorporated into a much larger infrastructure project
with much greater risk variables; it is critical that owners and contractors recognize the
importance of full regular risk assessments as part of a rigorous risk management program in
stating and achieving project goals.
3.2 Casecnan Multi-Purpose Project
The Casecnan Multi-Purpose Project is a combined irrigation and hydroelectric power project in
Northern Luzon, Philippines. It is structured as a Build-Operate-Turnover (BOT) project and
initially involved a U.S.-based owner/operator and a Korea-based EPC Contractor. The Project
diverts and conveys the water from two rivers through a 26-kilometer tunnel to an existing
reservoir. From there, an underground powerhouse generates 150 megawatts of hydroelectric
capacity. The Project also provides either new or stabilized irrigation for more than 100,000
hectares of land. There are approximately 80-kilometers of roadways on the Project site, many of
which have become permanent roadways not only for project use, but also for the local residents
as an infrastructural upgrade.
During construction, multiple issues were experienced, causing delays and culminating in the
termination of the EPC Contractor. Project progress monitoring became the primary area of risk
and the ultimate reason for the Contractor’s termination.
A detailed schedule delay analysis performed by the risk manager as part of the risk assessment
process determined that Project progress had declined. In the beginning, the EPC Contractor
experienced lower-than-planned production rates in drilling and excavation. To cover the delay,
the EPC Contractor changed its own schedule logic, taking the tunnel boring machine (TBM)
work and the drilling work for two adits (2 & 3) off the critical path. Originally, the critical path
activities, as based upon the EPC Contractor’s baseline schedule, progressed through three
concurrent paths: TBM work, powerhouse mechanical and equipment procurement and
installation; and Adits 2 and Adits 3 drill and blast work.
The risk assessment also identified poor project management as another reason the project might
be experiencing problems. Further investigation indicated that, in addition to the EPC
Contractor’s decision to revise the CPM’s schedule logic, further compounding the situation and
slowing the project were the EPC Contractor’s poor planning, engineering and design. Late and
insufficient performance by the survey subcontractor delayed the build-up of the topographical
model, which was critical to the EPC Contractor’s efforts to properly locate the intake weirs and
other intake-related structures and earthwork. This led to inaccurate design and construction.
The EPC Contractor assured the Owner that recovery was possible, and EPC Contractor’s
revisions of the schedule showed that the Project would be completed by the Guaranteed
Substantial Completion Date. However, as the Owner had relied upon the EPC Contractor to
provide the on-site project control tools, the Owner did not have its own project control tools to
monitor the Project progress. It was only able to identify the problems much later after the risk
assessment was performed, at which point the ability to recover the schedule loss had diminished
significantly.
Two Lessons Learned resulted from this Project. First, in selection of the EPC Replacement
Contractor, more extensive reviews were made in relation to the EPC Contractor’s financial
capabilities and experience with Projects of this size and type, which would served to reduce the
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risk that had actually occurred in the initial EPC contract. Second, the Owners learned the
importance of investing in and implementing project control tools to review and analyze the EPC
Contractor’s progress. By reviewing progress early and consistently, Owners can identify
problems early and preserve the opportunity to minimize damages.
When constructing major capital projects in remote areas of the world, combined with parties
who come from different backgrounds, cultures and project execution techniques, it is extremely
important to be assured that the EPC Contractor has the financial backing and experience base,
that thorough planning been completed, and that proper project control tools are in place to ensure
that the project’s progress can be regularly monitored to identify potential problems early. These
key aspects are risk areas that should be identified and evaluated in a risk assessment conducted
at the Project’s inception, and regularly and consistently repeated throughout the Project.
3.3 Xiaolandgi Dam
Located on the Yellow River in China, the Xiaolandgi Dam is one of the world’s largest intake
structures. It includes one of the largest diameter diversion tunnels and a massive complex of
plunge pools (water outflow and energy dissipating tanks). The Project provides control of
flooding, sediment, and ice jams, as well as irrigation, water supply, and hydroelectric power
generation. Harnessing and developing the river will cultivate new economic development
throughout that region.
One of the largest risk areas faced in underground construction is unforeseen geological
conditions. No matter what type of soil boring and/or geological information may be available,
the risk of unforeseen geological conditions is real and must always be factored into any tunnel
project risk assessment. This risk was real on the Xiaolandgi Dam Project, as during construction
of the Project, unforeseen geological conditions were encountered that adversely impacted the
underground and surface earthwork, as well as all aspects of the Contractor’s work. The extent of
the unforeseen geological conditions was the primary cause of the acceleration of project costs
and project delays.
Here, the first Lesson Learned was not necessarily the risk identification of the unforeseen
condition, which, in tunneling is a given risk, but rather the importance of contractual allocation
of risk for unforeseen geological conditions. The contract should have addressed, in clear and
precise language, the allocation of risk to a specific Project party in the event that unforeseen
geological conditions are encountered. Further, negotiations between the Project parties regarding
the contractual allocation of the risk of unforeseen geological factors could have helped minimize
disputes and costly litigation.
As previously indicated, one of the greatest risks in underground constructions, and the most
common reason for claims, is unforeseen geological conditions. While this risk cannot be
eliminated entirely, certain measures, such as providing a more thorough soils/geotechnical
reports to contractors at bid time, can minimize it. Even with a systematic geotechnical report,
however, the issue of the risk of an unforeseen underground condition and its allocation still exist.
3.4 South Bay Ocean Outfall
In San Diego, California, the South Bay Ocean Outfall extends approximately 5.6 kilometers
offshore and discharges effluent in approximately 30 meters of water. The Outfall consists of 5.7
kilometers of tunnel and approximately 2.7 kilometers of seafloor pipeline. A raiser structure
connects the pipeline to the ocean floor.
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Based upon the original design, a TBM was selected to excavate the segmentally lined tunnel. In
order to accommodate its own means and methods, the Contractor modified the TBM and
changed the shape of the tunnel segments. Additional changes to the tunnel design were then
requested by the Designer and Owner (City of San Diego). Changes to the design of the tunnel
required the TBM to be rebuilt and the precast tunnel segment molds to be modified by the
Subcontractor. The Subcontractor (manufacturer of the precast tunnel segments) sued for cost
increases and schedule delays. Essentially, multiple issues resulted from a single design change
early in the Project.
In addition to CPM schedule modifications, lack of project control tools, and unforeseen ground
conditions, all of which are risks faced in underground tunneling, one of the other common risks
is design change.
From an Owner’s standpoint, the Lesson Learned from this Project was that designs should be
fully understood and frozen at the time of bid initiation. Changes to a design after the bid report
will only lead to delays and cost increases. An early risk assessment performed prior to contract
finalization and bid document release may have identified this early, with the decision to either
hold the Project or to provide options to the contractor.
From a Contractor’s standpoint, the Lesson Learned was that if there is a possibility that a design
change will affect a subcontractor, those changes must be thoroughly reviewed to determine what
the precise impact will be down the line in terms of costs and scheduling. The changes must also
be fully reviewed in case the means and methods need to be modified from those originally
planned. These reviews are easily conducted through project risk assessments, which can identify
the likelihood of occurrence, and cost of occurrence including potential delay impact. The results
of such a risk assessment review must then be clearly communicated to the owner and all relevant
project parties prior to starting work. Contemporaneous communication with an owner,
accompanied by documented analyses of impacts that could result from owner-requested design
changes will, in turn, reduce the likelihood of delays, cost increases, and litigation.
Again, whether from the owner’s or contractor’s perspective, the one risk factor that should
always be considered is the design employed for a project. Design changes, when not fully
recognized or assessed in a consistent and independent manner, can affect a contractor’s means
and methods, which, in turn, can result in schedule delays and cost increases. In the preparation of
contract documents, the technical specifications for changes in design should be clearly stated.
4. CONCLUSIONS
Tunneling and underground construction projects, as with all engineering and construction
projects, require good design and thorough planning. The key to success, however, is the
development of a complete risk management program and procedure to conduct specific project
risk assessments so risk can be first identified and then managed from project inception to
completion.
By using risk management tools, owners and contractors can better identify and manage risk,
implement reasonable management actions and minimize time and cost impacts. A few of the
Lessons Learned that can be applied as identified from risk assessments of these four particular
projects include:
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! Use clear and concise language to explain the contractual allocation of the risk of unforeseen
ground conditions;
! Implement risk evaluations at the beginning of a project;
! Evaluate contractor schedules and preventing schedule manipulation (Owner);
! Minimize design changes;
! Choose appropriate means and methods (Contractor); and
! Thoroughly evaluate the impact of schedule or design changes.
These Lessons Learned can serve as a springboard to success in the construction of new
underground projects.
Risk takes many forms and can occur at any stage of a project. Because risk is applicable to
owners and contractors, both parties should address their own risks as early as possible and
continue to monitor them throughout the life of the project. Project-specific risk assessments and
regular risk review can also help minimize time and cost increases.
REFERENCES
Project Management Institute, 2000. Project risk management. Project Management Institute’s
Book on the Body of Knowledge (PMBOK Guide), Chapter 11, p. 127.
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