FEATURED PAPER
By Pat Weaver
Melbourne, Australia
Introduction
A previous paper The Origins and History of Cost Engineering[1] identified a range of deficiencies in the estimating, and cost control, of early engineering projects. These deficiencies were particularly noted in the United Kingdom (UK) during the canal mania of the late 1700s, followed by the railway mania of the early 1800s. This paper takes a closer look at these two classes of project.
J. A. Sutcliffe, in his Treatise on Canals and Reservoirs, published by Law and Whittaker, London, 1816[2] has this to say at page 168 “Had the engineer told the subscribers at first what would be the fatal consequences of this canal……..; and had he given them a true statement of the expense, and a rational estimate of the probable quantity of tonnage [to be shipped on the canal], most likely the spade would never have been put into the ground; but whether giving this kind of plain, useful information, is any part of the engineer’s creed, I leave the subscribers to judge by his estimates.” Similar comments could easily be applied to the early railway projects, although as this paper will show, the causes may be different.
The difficulties in determining a realistic cost for a new class of project are understandable. But, significant transport projects in the UK pre-date the industrial revolution by many decades. This suggests that in addition to the lack of empirical cost information, the problem with the cost estimates identified in The Origins and History of Cost Engineering may have been caused, or exacerbated, by various combinations of poor governance, questionable ethics[3], and optimism bias. The same set of issues that continue to plague many modern megaprojects such as the London Crossrail[4] project.
The objective of this paper is to identify and understand the reasons for the cost control challenges on many of the canal and railway projects built between the 1760s and 1840s.
Project timeframes
The canal and railway projects discussed below occurred in the same general timeframe as second phase of the industrial revolution; the transition from water power to steam power. Richard Arkwright is credited with building the prototype of the modern factory in 1769 when he established Cromford Mill as the world’s first water-powered cotton spinning mill. Water powered factories quickly spread along suitable rivers. The transition to steam power from the late 18th century on, removed the dependence on flowing rivers, and facilitated the concentration of industries and the expansion of cities. The factories and cities created a demand for both the transport of raw materials (particularly coal) to the city, and then the shipping of manufactured materials to market. This demand initially created a need for more canals and wagonways, and then steam powered railways.
There were very few canals in the UK prior to the boom in canal construction between the 1790s and 1830s. Most of the earlier canals were designed as simple improvements to the navigability of a river, and were described as navigations. Despite construction cost overruns, most canals were initially profitable. The factor that ended canal boom was a new round of technological advances that allowed the widespread construction of efficient railways.
The oldest of the large-scale transportation systems in the UK were the wagonways (alternatively spelled as waggonway). Most wagonways were built between a mine and a river wharf and were used to transport coal, or ore, from the mine down to ships or barges for onward transportation to market. The first wagonways were built in the 16th century, and the concept continued to be viable through to the 19th century.
Wagonways were initially constructed as horse drawn railways using timber rails, later various forms of iron rail were introduced, and by the 19th century, most of the horses had been replaced by steam powered locomotives. The first steam powered railways were the result of converting a horse powered wagonway to steam power. Based on these early successes, the use of steam power spread remarkably quickly:
- The first viable steam locomotive was created in 1812
- The first intercity railway opened in 1830, and
- The railway mania discussed below was in full swing by 1840.
The challenges of managing factories also caused major changes in the way businesses were managed and controlled, these aspects are discussed in two previously published papers and will only be lightly touched on here:
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To read entire paper, click here
How to cite this paper: Weaver, P. (2022). Cost Overruns on Early Canal & Railway Projects; PM World Journal, Vol. XI, Issue V, May. Available online at https://pmworldlibrary.net/wp-content/uploads/2022/05/pmwj117-May2022-Weaver-Cost-Overruns-on-Early-Canal-and-Railway-Projects.pdf
About the Author
Patrick Weaver
Melbourne, Australia
Patrick Weaver, PMP, PMI-SP, FAICD, FCIOB, is the Managing Director of Mosaic Project Services Pty Ltd, an Australian project management consultancy specialising in project control systems. He is a Fellow of the Chartered Institute of Building, Australasia (FCIOB) and a Fellow of the Australian Institute of Company Directors (FAICD). He is a member of the the PMI Melbourne Chapter (Australia), as well a full member of AIPM, and the Project Management College of Scheduling (PMCOS).
Patrick has over 50 years’ experience in Project Management. His career was initially focused on the planning and managing of construction, engineering and infrastructure projects in the UK and Australia. The last 35 years has seen his businesses and experience expand to include the successful delivery of project scheduling services and PMOs in a range of government, ICT and business environments; with a strong focus on project management training.
His consultancy work encompasses: developing and advising on project schedules, developing and presenting PM training courses, managing the development of internal project control systems for client organisations, and assisting with dispute resolution and claims management.
In the last few years, Patrick has sought to ‘give back’ to the industry he has participated in since leaving college through contributions to the development of the project management profession. In addition to his committee roles he has presented papers at a wide range of project management conferences in the USA, Europe, Asia and Australia, has an on-going role with the PGCS conference in Australia and is part of the Australian delegation to ISO TC258.
Patrick can be contacted at patw@mosaicprojects.com.au or at www.mosaicprojects.com.au.
[1] Download The Origins and History of Cost Engineering: https://mosaicprojects.com.au/PDF_Papers/P207_Cost_History.pdf
[2] Download Treatise on Canals and Reservoirs, by J. A. Sutcliffe:
https://mosaicprojects.com.au/PDF-Gen/A_Treatise_on_Canals_and_Reservoirs.pdf
[3] Daniel Defoe published: An essay upon projects in 1697 which discusses projects from the year 1680 onwards (but also recognizes there were earlier projects). The essay discusses the Projectors (in today’s language entrepreneurs) responsible for raising funds for their pet projects, often in less than flattering terms [page 11]: Wherefore ‘tis necessary to distinguish among the projects of the present times, between the honest and the dishonest. See: https://books.google.com.au/books?id=-5oxAQAAMAAJ
[4] The Crossrail construction project will become the Elizabeth Line when operational. Operation with end-to-end services are now expected in May 2023, a delay of 4 years and a cost overrun of £4 billion: https://www.crossrail.co.uk/
