2010-08-28

tunnel vision

Someone suggested that Risk Management takes place at the intersection of three disciplines: psychology, economy and technology. This is an important observation.

Consider.

The recent, long-awaited breakthrough in the Hallandsås Ridge Tunnel highlights the tremendous challenges facing this infrastructure project which was originally launched way back in the 1990's.

Let's recall the issues.
1. Was it a good idea to have this new railroad through the notorious ridge?
2. Was it doable?
3. Was it economically viable?

At the outset, we knew the geology was tough. It turned out worse than expected. We knew we needed extraordinary technology. That still wasn't enough. Time schedules slipped, budgets evaporated and as the nervousness began to set in, the previous project management started cutting corners, introducing substances which would create an environmental scandal. The Rhoca-Gil pollution issue turned out to be grossly exaggerated but in the hearts and minds of the locals and the general public is was a complete PR catastrophe. Viewed through the respective lenses of technology, economy and psychology the halted project was a hopeless failure.

So, where does one go from there? First the technology. Means and methods for tunneling through hopeless "non-rock" had to be reinvented. Then the economy. A credible plan had to be laid out, setting the record straight on what the job would cost and when it would get done. Still, succeeding on those two difficult fronts wouldn't be worth a penny unless trust could be regained. Trust from the locals that the construction work would be pursued safely. Trust from the taxpayers that huge piles of additional money would in fact be well spent. Trust from decision-makers who once again had to go on record, actively supporting this ill-fated tunneling effort. And there you have it. Technology risk, environmental risk, financial risk and political risk - all intertwined.

I wouldn't open the real expensive champagne quite yet but the events of last week, the spectacular breakthrough, was an important psychological milestone.

Let's revisit the main issues.
1. Today hardly anyone would argue against the importance of investing in our railroads. The climate threat changes everything. So yes, it is a good idea to have this new railroad.
2. Having the first tunnel completed is a fact which speaks loudly for itself. Yes - although the geology of Hallandsås Ridge may still hold some surprises for us, this is in fact doable. Our means and methods are working - and in a safe way too. Through openness and engaging in public debate, the new project management has regained the confidence of those living and breathing around the ridge.
3. Which leaves us with the issues of time and money. Skanska-Vinci are now delivering on the new plan. They're on schedule for allowing trains into the tunnel in 2015. The economists will continue arguing on whether the huge cost-overruns have been justifiable. As always, the money you already spent will be lost if you give up and seal the tunnel. What matters is the marginal cost of the work remaining.

Now, this time let's stay on track.
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