2009 has been a brutal year - for many. The collapse of the global financial market in October 2008 required painful adjustment during 2009 - deep cuts in workforces, abrupt halt of capital investments, cancellation of orders, closure of factories, indefinite postponement of projects. That was in just about every global business except tunnelling. True to historic trend, civil tunnelling operating in many countries has been operating contrary to the overall economic trend.
Success: New York No 7 Line breakthrough
On December 21, the first of a twin-set of 6.8m diameter Herrenknecht double-shield rock TBMs completed its first drive for Manhattan's new No. 7 subway line extension, from Times Square, under 41st St and 11 Ave, breaking into the new station cavern beneath West 34th Street. The machine began work at the end of April from a launch and working shaft at 25th Street and 11th Avenue, with its twin following at the end of June. Once through the station cavern the machines will continue to a reception cavern near the existing No. 7 Line station at Times Square. Contractor for the $1.145 billion negotiated contract with the City of New York and the MTA is the Schiavone/Shea/Skanska JV. The same JV is operating a 6.6m diameter Herrenknecht gripper TBM on the $337 million contract for the first phase of Manhattan's Second Avenue Subway project also for the MTA. The No. 7 Line extension is scheduled for completion in 2013 and the Second Avenue Phase I by 2015.
At their annual 'meet the trade press' events in London in early December, both Atlas Copco and Sandvik, those international giants of equipment manufacturing for the mining and tunnelling industry, reported dramatic loses for 2009. In October 2008, their graphs of economic activity fell off a cliff, with cancellation of orders over the course of about two weeks seeing the markers fall by 30%, wiping millions and even billions in some cases off the balance sheets.
As Björn Rosengren, Senior Executive Vice President for Atlas Copco AB and Business Area President for Construction and Mining Technique explained, no one saw the speed and dramatic impact of downturn coming. "At Mine-Expo in September 2008 in Las Vegas we were all still very optimistic and by Christmas the downturn grip had taken over." It was a major "reality check". "We in Atlas Copco began to see signs of a bubble developing and started taking defensive moves two years early. We outsourced most of the boom, opened no new factories, and invested only in emerging markets. Our immediate actions after October last year were to bring down inventories, close nine production plants and reduce our Construction and Mining Technique division workforce from 15,000 to 12,000 worldwide - only few of these direct employees."
Sandvik reduced its workforce by 4,500, half of them direct employees, and restructured the complexity of the organisation to eliminate a third of management level positions, close ten manufacturing bases (three in the USA, one in Latin America, four in Europe, one in South Africa, two in Australia), cut nine sales regions, and reduced networking capital - all to accrue a 2.5 billion SK savings in operating costs through 2009. "The actions taken are the start of being profitable at this low level", said Conny Rask, Communication Manager for Sandvik Mining and Construction. "The slight up-turn in the third quarter of 2009 is not a market recovery but a result of our reactions.
But it will turn and managing the upturn is what we are preparing for now."
China figures predominantly in the forward planning strategies with Björn Rosengren, actually moving from Sweden to Shanghai to manage Atlas Copco operations from there. Sandvik is restructuring on a 50% split between the northern and southern hemispheres and has opened two new manufacturing units in Brazil in September 2009 and opened its largest ever manufacturing and assembly plant to date in China "to bring manufacturing closer to the customers", said Rask. "Distribution capacity and international spare parts inventories were closed during 2009 but not lost.
For efficiency and lower costs, these activities will be managed under a three-hub concept from Chicago, USA, Holland and Singapore. Research and development will go into improving competence, product performance, developing a common technical platform, and reducing time of new developments to market." Atlas Copco is now focusing also on stable profitable growth in the areas of development of new products and adding value to the product range in the areas of safety and energy efficiency.
Hard lesson: Metro collapse in Cologne
Catastrophic failure of a deep crossover excavation on the new underground tram-line project in Cologne, Germany in early March claimed the lives of two residents in the partially collapsed apartment buildings either side. A 'boiling' of the invert in the deep excavation is the probable root cause of a disaster that occurred more than 18 months after slurry Mixshield excavation of the running tunnels. Investigations and preparation of possible prosecutions continue in the aftermath.
Success: Rosedale outfall breakthrough
The 3.2m o.d. LOVAT EPB used by McConnell Dowell on the 3km-long Rosedale undersea outfall in Auckland, New Zealand holed through into the reception shaft, some 600m offshore in Mairangi Bay. The 2.8m i.d. segmentally lined tunnel is the key element of McConnell Dowell's design-build contract with consultants Connell Wagner-DC for the North Shore City Council. The new effluent outfall project is on track for inauguration in July 2010.
Both companies emphasised after-sales services with Rosengren stating that 60% of the Atlas Copco business will be in "aftermarket" services and Rask at Sandvik saying that the goal is to establish service contracts with major clients and focusing on moving away from yesterday's "pit stop" approach to service, to avoiding the pit stops tomorrow through product improvements.
Through the pain of 2009, Conny Rask for Sandvik, said that only tunnelling in the construction market (down -32% as a sector) held up. Rosengren said that of Atlas Copco's 60/40 split between mining and construction, more is expected of construction for 2010, "not in general construction but in specific markets and particularly in heavy construction". "Hydro is up; there is road construction in Asia (China, India), Africa and South America; and high speed rail is a bright spot. China is bigger this year for us than last year, with more anticipated for 2010, and with India and Brazil also providing growth. Russia is weak and both East and West Europe and North America are down". For specific tunnelling industry manufacturers, the sentiment holds true. Lok Home told TunnelTalk that, but for delivery of some orders extending into early 2010, 2009 would
have been the best year ever for Robbins, up some 50% on 2008 and with order books looking healthy into next year. "Only the small diameter sector was off some for Robbins," said Home. Delivery of machines by Herrenknecht through 2009 also indicated busies productive and profitable times and NFM reported important orders and deliveries through 2009. Wirth and Lovat were still managing mergers after full talk-over by Aker Solutions and Caterpillar respectively through 2009 and are yet to show clear, new ownership strategies into the coming years.
For material suppliers in the industry, much has depended on actual project activity through 2009 and with many contracts closing out and others yet to start, recent times for some have been lean and worrying. Contraction of production capacity and reduction in employee numbers have been a consequence with the hope that programmes of new tunnelling projects will take off to re-establish those life lines.
Recognition: Franklin Laureate Dick Robbins
At a gala evening in April, Dick Robbins was honoured with the 2009 Benjamin Franklin Medal in Engineering in recognition of his contribution to the development of mechanized TBM tunnelling, for his imagination and skill in developing a hard-rock TBM and its associated systems as a safe, economical, and efficient means of building tunnels.
Remembered: Sir Alan Muir Wood
One of the world's leading professional engineers and a leading statesman of the tunnelling industry died at the age of 87 in February 2009. As well as being a founder and past Chairman of the British Tunnelling Society (BTS), Sir Alan was most well known internationally as a co-founder and first President, and the Honorary Live President there after, of the International Tunnelling Association (ITA). In recognition of Sir Alan's contribution to the tunnelling industry profession the BTS is organising a day-long symposium on state-of-the-art design, construction, procurement and management of tunnelling projects in October 2010.
For the consulting and contracting industries, fortunes rose and fell on the ability of owners to move new projects into detailed design and construction. In some markets, 2009 was a year of delay and painful cancellation. Termination of recently awarded interceptor tunnelling contracts in Detroit exemplified the hardest impacts in North America and the situation in the UK was illustrated most vividly by a statement from Morgan Est (one of the UK's leading tunnelling contractors) that, once excavation on its sewer contract in Belfast holed through in 2009, it would not have a TBM working on a project for the first time in 50 years. Employee layoffs and the wait for long delayed award of contracts were signs of the times.
Much optimism through 2009 hung on the huge stimulus packages confirmed by governments of the hardest hit nations around the world. The public sector construction industry was said to be the largest beneficiaries of stimulus package spending with 'shovel ready' projects being the prime targets, as they are described in the US. 'Shovel ready' however doesn't seem to have lived up to its expectation, or perhaps too much was anticipated by the term. There is many a twist and turn between project signoff and the passing of a contract into the procurement phase and from there onto ground breaking. As Rosengren at Atlas Copco reported in early December: "We are yet to see stimulus package money translate into equipment investments." So the expectation for 2010 is great.
2009 in hindsight But as 2009 closes out, TunnelTalk looks back on some of the industry's highlights and most significant events. First the great news: During the year intense programmes of urban transportation tunnelling were progressing in many cities around the world with hundreds of TBMs in action and open-face NATM-type excavations creating road and transit tunnels under New Delhi, Johannesburg, Brisbane, Seattle, New York, Beijing and Singapore to name just a few. Mega-TBM road tunnels under the Yangtze in Shanghai progressed towards their inauguration and in Switzerland there was great celebration when the northern section of the Gotthard Baseline railway tunnel
was completed. A final TBM breakthrough in September marked 91%, or about 137km of the total 151.8km of the excavation completed.
In Norway, the nation that has made undersea tunnelling an speciality celebrated the opening of its 28th subsea road tunnel, the Atlantic Tunnel on the road between Averøy to Kristiansund. New York continued TBM running tunnel progress and station cavern excavations on the East Side Access project as well as on the Second Avenue Subway project, and welcomed a recent TBM breakthrough into the vast 34th Street station cavern on its No. 7 Line subway extension.
Success: Arrowhead tunnels now on-line
The water seen flowing through these pipes into Diamond Valley Lake is proof positive that the Arrowhead Tunnels on the $1.2 billion Inland Feeder project for the Metropolitan Water District of Southern California are finished and on-line. In construction since 1997, and with the Shea/Kenny JV operating two Herrenknecht machines of distinct design over the past 4.5 gruelling year, it was dogged determination that won the day and eventually had the last TBM holed through for the two 9.2km and 6km long tunnels in August 2008, the inner precast concrete pipeline installed and the water flowing by September 2009. A final account report will be published on TunnelTalk early in 2010.
Vancouver, Canada celebrated grand opening of its new metro system four months ahead of schedule. 2009 also marked the end of tunnelling activities for South Africa's Gautrain in Johannesburg and Pretoria with final breakthrough of the last tunnel drive to complete more than 15km of high-speed rail tunnels.
In the field of water infrastructure, this year saw the finish, at long last, of the Arrowhead Tunnels section of the Inland Feeder project in Southern California following final TBM breakthrough late last year. A final account of this extraordinary tunnelling endeavour is in progress for a report on TunnelTalk in the early weeks of 2010. Decisive action in the Swiss Alps neutralized a potential disaster with the construction of an emergency tunnel to drain melt-water from the receding Grindelwald Glacier and Sacramento, California saw the first use of an embedded PVC liner in a segmental lined sewer tunnel.
Hydro schemes powered ahead in 2009 with Ethopia wrestling success from major struggles on the Beles II hydo scheme. New drill+blast advance rate recorders where set on the Kjøsnesfjorden hydroproject in Norway and mega-diameter TBM excavation began four headrace tunnels for China's Jinping-II hydropower station.
Major acquisitions and partnerships were signed in 2009 most notably the stunning acquisition of Parsons Brinckerhoff by UK contracting group Balfour Beatty. Wirth GmbH became a fully controlled subsidiary of Aker Solutions of Norway in March 2009, and the new name Aker Wirth was launch in June and BASF's Meyco division and the giant Sandvik manufacturing company decided to partner in November 2009 to combine spare parts management and the service and maintenance of Meyco shotcreting machines. 2009 saw consolidation of Caterpillar's acquisition of Lovat and also China's purchase of CIFA.
On the downside, the industry learned some hard lessons. Collapse of an open-cut crossover on the subway project in Cologne, Germany was amongst the most devastating claiming the lives of two people in the associated collapse of adjacent buildings. A segment falling from a completed ring of segmental lining was the stated cause of a major sinkhole on the Cairo Metro in September and significant rock falls forced shutdown and proposed excavation of a bypass tunnel on Scottland's Glenndoe hydro scheme. Partial downfall of an Albanian road tunnel following excavation has engineers currently working on a fix, and an old geotechnical bore hole cause a major crown collapse behind the mega TBM driving the hydro diversion tunnel at Niagara. Voids behind the segmental lining tarnished inauguration of Seattle's new light rail line under Beacon Hill. Also in Seattle, downtime to repair excessive ware on two of the TBMs excavating the city's Brightwater conveyance tunnel continues.
As well as accolades for leading personalities in the tunnelling industry, including Dick Robbins and Martin Herrenknecht there were awards of recognition for different tunnelling projects around the world. These included the Charlston sewer project in South Carolina in the USA and also in the US the vital seismic retrofit of the Claremont water supply tunnel in the South Bay area of San Francisco in Northern California. In the UK, the Docklands light rail crossing of the Thames in London was recognised for the significant undertaking that it is.
As well as tributes and recognitions, there is cause also to remember those who died during the year, most celebrated among these are Sir Alan Muir Wood
(February 2009); Dan Eisenstein (June 2009); and Tor Brekke (March 2009).
As 2009 draws to a close, TunnelTalk is preparing its editorial programme through 2010. Among the articles already in the pipeline we will keep you up to date on development towards the massive BAUMA construction equipment fair in Munich in April; the ITA WTC and General Assembly in Vancouver in May; and the NAT conference in Portland in June (see Diary Dates). We will report on the Strait Crossing symposium held in Trondheim, Norway earlier in 2009 and bring editorial exposés on Singapore's tunnelling boom; the industry's economic outlook for 2010; a Heathrow settlement; and close out of the Arrowhead Tunnels contract and Inland Feeder project in Southern California.
As TunnelTalk gears up for another busy year in 2010, we wish everyone in the international tunnelling industry a productive and successful and very happy New Year!
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