Page 33 - Global Project Management Handbook

THE EVOLUTION OF PROJECT MANAGEMENT 1-15

The Franco-Egyptian feat of engineering was advantageous to the British, who were
the most skeptical. Britain’s ocean links to India would benefit most from a canal. Before
the canal opened, it had taken at least 113 days for a steamship to sail the 6000 miles
from London to Calcutta via the Cape of Good Hope. The canal cut the distance by a
third under the terms of the concession obtained by Lesseps, whose company had the
clearance to dig a channel across the arid Suez Isthmus, a distance of 100 miles, and to
operate it for 99 years. The Egyptian government would receive 15 percent of the profits,
the founders 10 percent, and the shareholders the rest.
Experience with modern major construction projects indicates that they cost at least
twice the amount stated in the prospectus and that the expected revenues usually are
about half of what is projected. In the Suez Canal there were additional reasons for cost
overruns. A huge labor force would have to be obtained from the Egyptian peasantry. In
addition, there were major problems in cutting the canal through its pathway in arid land.

The Panama Canal (1870–1914)

The Panama Canal, often called the “big ditch,” was started by a French company in
1870. The company ultimately went into bankruptcy. The technical challenges were
part of the problems faced by the French company, but perhaps the greatest problem
was one of health. Malaria plagued the workers and many died within weeks of arriving
in Panama. The French company sold its interest in the Panama Canal to the United
States in 1903. The United States, under the political leadership of President Teddy
Roosevelt, started working on the Panama Canal and finally finished it in 1914. The
canal was the biggest and most costly venture that Americans had ever tried outside
their borders.
The Panama Canal was a vast, unprecedented feat of engineering, political intrigue,
and logistic challenge. Apart from wars, it represented the largest, most costly single
effort ever before mounted and held the world’s attention over a span of 40 years.

Transcontinental Railroad, Omaha, Nebraska,
to Sacramento, California (1862–1869)

In the United States in the mid-1800s, a project was initiated to join the continent of

North America by railroad. The two biggest corporations in America, the Central Pacific
and the Union Pacific railroads, had armies of men at work building separate railroad
lines. This project was an epic of logistics, organization, and endurance. When the two
railroads were joined in Promontory, Utah, a single transportation system became opera-
tional from the east coast to the west coast of the United States.
Completion of this project linked the east and west coasts of the United States through
a rail system to conduct commerce. Between Omaha and Sacramento, there were few
towns on the path to benefit from the commerce. The railroad, however, provided the
incentive to build communities both to service the system and to use it.

The Pennsylvania Turnpike (1935–1940)

Building the Pennsylvania Turnpike in the late 1930s is an example of the early use of
project management in the United States. The Pennsylvania Turnpike opened on
October 1, 1940, and was completed on time and within budget. Moreover, it attained its
objective as an innovative means for improving highway systems.