Denver International Airport
November 20, 2009
History:
Denver international airport was developed to replace Stapleton airport. Stapleton airport was an old airfield that was constructed in 1929 and in 1964 it was expanded to include an additional runway and terminal. In 1972 an additional extension was done to the main terminal and an additional concourse with 32 gates was opened. In an effort to ease the pressure on the airport two additional concourses were expanded in 1987 and 1988. As much as the Stapleton airport was being expanded with time it was seen as an old relic and thus necessitating the building of a new airport.
Stapleton airport had become one of the busiest airports with over 66 million passengers annually passing through the airport. This increase in commercial flights to Denver made Stapleton Airport become a source of congestion and delays in air travel in the country and any delay in Denver had a ripple effect on other flights in the nation. According to Kerzner (2004) Denver caused up to $100 million loss due to delays caused by bad weather, congestion, rerouting and canceled flights etc.
The runways at Stapleton were also too close to each other and thus it was difficult to simultaneously operate these two runways in bad weather. These reasons led the city to approve the construction of a new airport that was to serve as a hub for national and international flights.
Stapleton Airport had also become surrounded by residential and commercial buildings and this put a lot of strain on expansion capabilities of the airport. It also created a lot of safety concerns with the residents and lawsuits were brought against the airport because of noise pollution.
There was also the economic aspect of building a new and modern airport in the region. The hope was to make the new airport act as a catalyst for economic growth in Denver by first, bring in passengers into the region who would spend money in restaurants, retail stores, tourist sites etc. According to Air Transport Action Group (ATAG), a third of the world’s manufactured exports are transported by air and just under a billion passengers travel annually by air in the US thus making air transport one of the biggest growth markets and one of the greatest economic catalysts to a region. Secondly, by create employment. The city officials projected that the new airport would create thousands of new jobs at the airport and also at new corporate buildings and hotels that would come up near the airport.
Denver International airport was built on 53 square miles of Adams county land that was given to Denver after a vote by the Adams county residents, after that vote the city officials authorized the first disbursement of $ 60 million for the project.
Analysis of what went wrong
There were various things that went wrong with this project, and most of the problems could be attributed to poor project management for instance allowing uncontrolled massive scope changes that were costly and unplanned for. The city employed two engineering firms to act as part of the project management team and even though these two firms had experience in airport design and construction they seemed to have been overwhelmed by the vested interests and the complexity of the project. This team did not involve the users (airlines) in the project design stage of the airport and while the two airlines (United Airlines and Continental Airlines)contributed 80% of the flights in to Stapleton they were overlooked, this action necessitated late changes to the design of the airport as a way of appeasing the two airlines. The scope changes led to cost overruns, lost time and redundant designs e.g. building a bridge between Main terminal to terminal A while there was an underground train that joined the two terminals. These scope changes by the airlines led to a $1.1 billion cost overrun.
Testimony given by the then secretary of transportation Federico Pena to the subcommittee on aviation concerning the Denver international airport project acknowledged that major design changes late in the process were one of the causes of cost overruns and delays in completion dates.
The project management team also failed to realize that the first design they had approved not only failed to meet project standards but also failed to meet the aesthetic value that the city was looking for. The first design resembled train sheds structures and was going to cost $ 48 million more than the second design which was a Teflon fabric designed like the snow capped Rocky Mountains. The second design was later approved.
The project team also allowed for architects of the airport design to be heavily involved in the construction of the airport and this led to people questioning whether the project management team had abdicated their role as overseers of the project (Kerzner, 2004).
In 1992 the head of the project team resigned and the chief engineer Walter Slinger was left in charge, five months later Walter Slinger died and his position was taken over by Gail Edmond. Walter Slinger had more autonomy and power from the city council and thus he could make decision without having to refer to the city council, but this was not the case with Gail Edmond because after she took over from Walter slinger, the city council stripped most of her autonomy and power.
In a rush to beat the deadline construction was being done in three shifts and this led to concerns over the quality of work being done. Cracks began appearing on runways and taxiways before the official opening of the airport, rain seeped through the ceiling and this led to allegations of fraudulent contracting and construction practices. One of the contractors Ball, Ball and Brosamer allegedly diluted the concrete mixture and rigged computer formulas to add cheap ingredients to the cement mixture used in the runways and taxiways.
An inspector had photographed these shoddy job practices and had complained about them, but nobody seemed to investigate until he took the case to federal investigators. The inspection showed that concourse B was heavily affected since the steel reinforcements in the pillars were not properly anchored. It is estimated that Denver international airport would use an additional $ 30.8 million to repair the concrete panels in the runways because of this fraudulent practice (Rocky Mountain News).
Baggage handling system was also another cause of delays and budget overruns. Instead of each airline having its own baggage handling system, Denver international airport officials tried to develop one system that would serve all airlines and thus led to the purchase of the BAE (British Aerospace Electronic) system. This system according to Kerzner (2004) contained 100 computers, 56 laser scanners, conveyor belts and thousands of motors.
The baggage handling system by BAE was a new system that had been implemented only in Frankfurt Germany and even there it had taken six years to implement the software and another two years to debug the software. Testimony given by the then secretary of transportation Federico Pena to the subcommittee on aviation concerning the Denver international airport project acknowledged that they relied on highly sophisticated newly written software that wasn’t sufficiently designed and tested. According to computer software experts the BAE system was implemented as a whole instead of having it developed in a piece-meal fashion. Mark Webster the system was too complex to be implemented as a whole and instead it should have been implemented from a small working systems and then gradually improved and expanded to the large complex system that they had wanted.
When the airport opened each airline had its own baggage handling system, United airlines the proponents of the BAE system were left with the difficult task of implementing BAE system which they later abandoned in 2005 because of high maintenance costs ($1 million a month).
The master plan for DIA construction called for the construction of 60 departure gates for each of the four concourses that were to be developed. During the construction, the country was hit by a recession and the scope of the project was change to reflect this situation. They finally built only three concourses and future expansion plans were to incorporate the construction of the final two concourses.
In 2002 DIA officials undertook to build a sixth runway that was to be the the largest runway in the world at time. It was to be built in an effort to attract more international airlines such as non stop flights to Asia and Europe and also to allow long haul flights to carry more weight to and from DIA. A new generation of jets were be built at that time, the super jumbo jet and they need longer runways than usual and this sixth runway was also developed to attract such planes to DIA. The cost of the runway was at $166 million which was considered a bargain at the time. (Denver Post May, 15, 2002)
WorldPort was a cargo facility that city officials approved to be built on DIA’s land. It was to be a privately financed project at a cost of $ 100 million and it was projected to bring an annual rent to DIA of about $ 1.3 million. This state of the art cargo facility was supposed to address the concerns of the cargo airlines like FedEx, UPS etc by developing a separate area for cargo handling. Since 2000 the project was not completed and this has necessitated a discussion by city officials to buyout the private firm at a cost of $ 4 million and lease the two 50,000 square feet space to cargo handling firms. The failure of WorldPort is being blamed for the decline in cargo flights through Denver and the loss of revenue. (Denver Business Journal)
Denver international airport had a poor public relations image from the beginning, but it did not help when it came to the attention of the then Mayor Webb that the new airport was being built on an ancient Indian burial and warring site and this led to several rituals being performed by the Indian witch doctors in an effort to appease the dead spirits. The Mayor at a later stage also commissioned murals to be painted for the new airport. The murals that were painted were considered offense because they depicted an African woman, a Red Indian woman and a Caucasian lady lying in open caskets. This led to a lot of speculation that the murals had masonic interpretations.
Denver international airport after its’ opening encountered a few legal issues when residents living near the airport filed a lawsuit against it. They claimed that the airport violated a noise abatement agreement they had signed earlier to ensure that the airlines flying into the airport were low noise airplanes, but instead the airport allowed for nosier aircrafts usually used by budget airlines. (Denver post, June 7 1997). In 2002, the airport officials reached a $ 26 million settlement with the Adams county officials. This settlement was for fines for noise pollution for the years 1996-2000.
Another lawsuit was filed against Denver international airport on behalf of employees and travelers. This lawsuit claimed that concourse B had extensive mold and fungi contamination caused by several raw sewerage leaks and emissions of toxic gas. This lawsuit claimed that several employees had complained of respiratory problems, dizziness and nausea as far back as 1993 when the airport was being built. They further claimed that the poor design of Denver international airport’s system for reclaiming toxic deicing fluids was a major cause of this problem.
Occupation safety and health administration officials (OSHA) inspected the airport and found there was significant water leakage, contaminated air and standing water on concourse B belonging to United Airlines. Their recommendations were largely ignored and the problem persisted until the lawsuit was filed and the situation was rectified.
After its official opening, most airlines signed agreements with DIA, United Airlines and Continental Airlines had already signed agreements with DIA, but in 2002 United Airlines filed for bankruptcy in an effort to reorganize, it cut flights to most airports including DIA. United’s plan to build a regional jet operation in DIA was put on hold and an agreement was reached that further cemented the relationship between United airlines and DIA. As part of this agreement DIA agreed to service United’s $ 184 million debt tied to the baggage handling system in return United Airlines agreed to fly a minimum of four flights a day from each of their six gates at concourse B and increase the number of passengers it flew each year by 100,000 from 2006 through 2025. United Airlines agreed to pay $ 6 per passenger if it failed to meet these requirements.
Southwest airlines also signed up with Denver international airport in 2006, after DIA substantially reduces in fees and allowed for low cost airlines such as southwest to compete and pass on to consumers benefits of market competition such as low airline fares etc.
Over the years Denver international airport has improved its’ telecommunication capabilities by offering superior WiFi access. This offering has made Denver international airport to be the largest airport in the world offering free WiFi services. Although the WiFi access has enhanced the image of Denver international airport there have been a number of problems with the Internet access. According to the Denver post one of these problems was the installation of filtering software that is used to block pornographic websites, but it also tends to block other legitimate websites such as Vanity Fair website, Perezhilton.com and others.
The airport officials indicated that the action to block or filter websites within the airport facilities was because the airport was considered a family friendly area and the software was not 100% effective, but this didn’t please a lot of travelers who were inconvenienced by this filtering software.
Denver international airport decided to remodel their restrooms and replace the ceiling tiles in three concourses. This was done at a cost of $ 6.2 million and included the addition of more sinks, addition of a diaper changing facility, replaced of ceiling tiles that had been stained because of the leaking roof and replacement of urinals that had started to age.
Another improvement in DIA has been its adoption of environmental standards that have seen DIA become the first airport to receive ISO14001 international standard in 2004. DIA is also a member of the US environmental protection agency’s performance track program and is known as the greenest airport in US because of its accomplishment in environmental standards, such as having 678 alternative powered vehicles, including buses and sweepers that use compresses natural gas, 108 electric and hybrid cars and 360 heavy duty vehicles running on B20 biodisel.
In 2008, DIA opened a new two megawatt solar energy system that was built on seven and half acres of land. This solar system produces three million kilowatt hours of clean electricity for use at the airport and reduces carbon emissions by 6.3 million pound annually. DIA opted not to by the solar panels instead it entered into partnership with a private company called MMA renewable ventures, this company financed and owns the clean electricity generated by the solar panel. The electricity is sold to DIA at an agreed cheap price stipulated by the long term power purchase agreement signed by the two companies.
By 2006, DIA was the sixth busiest airport in the US and had over 50 million passengers pass through the airport annually and over 1450 flights daily with over 106,000 passengers daily half of whom were transfers. This indicates that DIA had become a strategically placed airport within the US. Denver international Airport now employes over 30,000 people making it one of colorado’s biggest employers.
Conclusion
Although Denver international airport was built for the right reasons its’ failure to develop a competent project management team that would have tightly controlled various aspects of the project indicates that this project was headed for disaster from the beginning.
Denver International airport was projected to cost $1.7 billion, but by the time of its’ opening in 1995 the cost was $5 billion, $3.3 billion over budget. It was also scheduled to be opened in October 1993 but it was opened in February 1995, sixteen months past it scheduled date. From a project management perspective this can hardly be said to have been a successful project in fact DIA as it came to be known serves as an example of how costly poor project management can be.
Conflict Management
November 20, 2009
Classical management involves running an organization based on breaking down an organization in functional departments and allocating resources to these functional areas for the purpose of achieving organizational goals. Project management , “is the directing and controlling of a relatively short term project or systems-oriented organization with functional personnel assigned as required and established for the completion of specific goals”.
Project management institute defines project management as “the application of knowledge, skills, tools, and techniques to project activities to meet project requirements”. According to Kerzner one of the most important functions of top management was the resolution of conflicts.
A second change has been the establishment of a project management office in strictly hierarchical structures to handle and coordinate project issues like conflict resolution etc.A third change in classical management was having detailed plans and involving everyone in the aspects of planning, budgeting and scheduling. This reduced conflicts among functional managers and ensured that there was no struggle for power among the managers.
Causes of conflict:
In organizations conflict tend to happen in different situations, some of the causes of these conflicts involve competing for resources among departments. Theses resources can be manpower especially skilled manpower, equipment and money. In classical management, managers tend to fight over these resources because whoever controls most of these resources is deemed to be more powerful, more productive and can be easily get promoted or offered bigger executive pay package.
In project management resources tend to be allocated according to projects, thus these resources are dynamic in nature as opposed to the classical management style of allocating resources. Resources are thus distributed more evenly and can easily shift if needed between projects, when conflicts arise a compromise can be easily reached and tradeoffs can be done.
Communication is another huge source of conflict, especially in classical management where communication channels are few and tightly controlled by departmental managers. Information is normally passed upwards or downwards and rarely does lateral communication occur in classical management, this can cause conflicts especially when information is distorted due to interests, prejudices or emotions. While in dynamic project management, communication channels especially lateral communication are open thus avoiding conflicts and distrust among the stakeholders and ensuring success of the projects. Communication conflicts can be handled by the project manager through force or confrontation, thus establishing proper lines and mode of communication. When it comes to project success one cannot compromise on modes and lines of communication because compromising on this issue can seriously lead to project problems at a future stage.
Conflicting objectives/interests can be another cause of conflicts especially in classical management where functional managers tend to create their little empires and approve or support issues or projects that would benefit them. Project management tends to create an environment where everyone is involved in decision making or least is present when decisions are made this help to build consensus among stakeholders and also allows for personal interests to be laid out openly and handled. In project management, a project manager can handle this type of conflict through compromise and tradeoffs between the different stakeholders.
Conclusion
Conflicts can have both positive and negative impact on productivity. When individuals conflict on how best to proceed in terms of finding a solutions to a problem then one argue that conflicts are positive, but when conflicts involve fighting over resources, objectives or personal interest then one can accurately state that such conflicts are negative in nature and can affect productivity of the project team.
Project managers need to be experienced enough to know when to step in when conflicts arise and sort out issues and when to step back and let the project teams members handle conflicts on their own.
