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Cost Estimation Plan - Coursework Example

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This paper is about cost estimation plans for Sydney harbour Tunnel. After giving a brief introduction of the tunnel, various approaches and perspectives for cost estimations of huge infrastructure projects are given. The tunnel proved to b less than a success and there were a number of hindering factors which are responsible for the failure of the project which is also considered as an important Public Private Partnership (PPP)…
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Cost Estimation Plan
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Download file to see previous pages According to the agreement, these operations will be transferred to government.
Approach road to this tunnel is shared with that of Sydney Harbour Bridge. The SHT is 2.3 kilo meters long with only 1 kilometer of the tunnel being under the Sydney Harbour. There are total 4 sections in the tunnel; two on the North of the Sydney Harbour and the other two on its Southern side. The two land tunnels on the North side have a length of 1 kilometer each and those on the Southern side have a length of half kilometer each. The four units are joined by means of eight solid concrete blocks. There are two carriage ways in SHT, each having two traffic lanes.
This tunnel is one of the largest tunnels in Australia and therefore, has much importance. The project for construction of the SHT can be considered as one of its own nature as there are certain outcomes observed which have raised questions about the project. One such important issue is the fact that the project Sydney Harbour Tunnel was a PPP in which the private partner bore higher portion of risk as compared to that of public partner, or to be more precise, in this case government of Australia.
In the next section of this essay we will focus on the various assumptions made during the cost estimation of the STH plan. Various approaches towards the cost estimation of mega infrastructural projects and their application to the Sydney Harbour Tunnel Project will follow the assumptions. A cost-benefit analysis of the project is given and conclusion is drawn on the basis of all the discussion. To start the discussion about cot estimation of STH, let us first discuss some of the major assumptions made during the financial planning stages of the project. Given are some of the basic facts and figures about Sydney Harbour Tunnel:

2.0 Looking into The Finances and Economics of Sydney Harbour Tunnel
Sydney Harbour Tunnel was built on the principle of 'BOT,' i.e., Build, Operate and Transfer. There were a number of financial advisors involved in economic and financial analysis of the project. A combination of analysis techniques were used by these consultants and a unified statement as a result of the analyses was given by the Auditor General NSW in 1994.It was stated that the project was viable and beneficial on financial, economic and environmental basis. The tunnel was reported to be justified on the basis of factors like travel time, air quality, economics of the project and the quality of travel with special reference to air quality. However, it was mentioned in the later parts of the report that technical deficiencies and constraints may affect some of the outcomes o the project. These assumptions are addressed in the very next section of the essay with their detailed analysis and how it influenced the overall functioning of the tunnel from the start up to the date.
The estimated cost for the construction of the tunnel was reported to be 3.8 million Australian Dollars. These funds were generated from three different sources. The first tool used was the issuance of inflation-index bonds of maturity 30 years to raise a capital of AU $ 486. The second ...Download file to see next pagesRead More
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