Construction megaprojects often capture headlines for their grand ambitions and monumental scale. However, behind the façade of progress lie familiar tales of budget overruns, scheduling delays, and unmet expectations. From high-speed rails to airport expansions, megaprojects frequently succumb to the weight of complexity and uncertainty, leaving stakeholders disillusioned and communities underserved.
Examples of such failures abound.
Consider the California high-speed rail, once hailed as a visionary solution to congestion. Voters approved it in 2008. Originally slated for completion in 2020 for $33 billion, the project now faces indefinite delays and ballooning costs, with estimates surpassing $100 billion. A segment between Merced and Bakersfield will be completed between 2030 and 2033.
Similarly, Boston’s Big Dig Artery/Tunnel project, which opened in 1998, was initially projected to cost $2.8 billion. However, upon completion in 2007, its final bill soared to $8.08 billion.
Also, Denver International Airport was projected to open in October 1993 for $2.0 billion. However, the construction was completed in February 1995 for $4.8 billion.
These are not isolated incidents but symptomatic of systemic issues plaguing megaprojects worldwide.
Bent Flyvbjerg, an Oxford economist, studied the outcomes of thousands of large projects. The results are:
- 47.9% are delivered on budget.
- 8.5% are delivered on budget and on time.
- 0.5% are delivered on budget, on time, and with the projected benefits.
In other words, “Awful performance is perfectly normal.”
What makes megaprojects attractive to decision-makers?
The allure lies in what scholars term megaprojects’ “sublimes”—political, technological, economic, and aesthetic. Politicians seek monuments to bolster their legacies and causes. Megaprojects are media magnets, garner attention, and provide trade union support.
Engineers crave feats of innovation that push the envelope for the tallest, longest, and fastest projects. Businesses chase lucrative contracts while designers aspire to create iconic landmarks. Yet, beneath these aspirations lie inherent risks that often go unheeded until too late.
What Makes Megaprojects Risky?
- Megaprojects have long planning horizons and complex interfaces
- Planners and managers lead megaprojects without deep domain experience.
- Leadership changes due to long timelines
- Decision-making, planning, and management involve multiple stakeholders
- Technology and designs are often nonstandard.
- The project scope typically changes over time.
- Delivery is high-risk without consideration for “Black Swan” events.
- The complexity and unplanned events are typically unaccounted for, leaving budget and time contingencies inadequate.
- Misinformation about costs, schedules, benefits, and risks is common during project development and decision-making. This results in cost overruns, schedule delays, and benefit shortfalls that undermine a project’s viability.
(See related post, “Ensuring Success: Navigating 9 Potential Project Risks in Healthcare Construction“)
A Politician's Take on Megaproject Budgeting
Former San Francisco mayor Willie Brown’s provided a candid assessment of megaproject budgeting:
"In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there's no alternative to coming up with the money to fill it in."
This exposes a harsh truth: initial estimates serve merely as a down payment, shielding decision-makers from the daunting realities of actual costs. Without accurate cost projections, projects proceed on shaky ground, destined for cost overruns and public scrutiny.
What can we learn from Megaprojects?
Bent Flyvbjerg’s first advice is, “Think slow, act fast. The irony of megaprojects is that many are late because not enough time is spent planning, which is the most efficient way to minimize uncertainty and shrink risk. You don’t want to start digging before you know exactly what you’re doing”
His second advice is, “Find the Lego that simplifies your work and makes it modular.” Legos are a prime example of a modular building. With a modular design, you can scale up quickly and efficiently.
“Modularity is a clunky word for the elegant idea of big things made from small things,” he writes. “Look for it in the world, and you’ll see it everywhere.” Everywhere includes “software, subways, hardware, hotels, office buildings, schools, factories, hospitals, rockets, satellites, cars and app stores,” he writes. “They’re all profoundly modular, built with a basic building block. They can scale up like crazy, getting better, faster, bigger, and cheaper as they do.” Tesla’s so-called gigafactories and Apple’s headquarters are good examples of modular design
Conclusion
The failures of construction megaprojects serve as cautionary tales for future endeavors. We can chart a more sustainable path forward by heeding the lessons of the past and embracing a cautious deliberation and modular innovation mindset. Like Lego bricks, let us build our projects one block at a time, with foresight and flexibility, ensuring resilience in uncertainty.
