Magazine article The Futurist

Megaprojects and Megamistakes: When Big Thinking Creates Big Problems

Magazine article The Futurist

Megaprojects and Megamistakes: When Big Thinking Creates Big Problems

Article excerpt

The Suez Canal cost 1,900% more to build than planners originally estimated. The Sydney Opera House cost 1,400% more. And the Channel Tunnel (Chunnel) between Britain and France exceeded its estimated costs by a modest 80%.

Big projects always cost big money, but nine times in ten they cost far more than planners say they will. Cost overruns are often at least 50% higher than the estimates for grandiose development projects like intercontinental transportation systems and other "mega" infrastructure schemes--and 100% overruns are not uncommon, according to the authors of Megaprojects and Risk. Because more and more of these large infrastructure projects are being proposed and built, their poor economic track records bear closer scrutiny.

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Is the problem poor planning or duplicitous developers? Clearly, developers want their projects developed and so might deliberately underestimate costs or overestimate benefits. But the real culprit is the failure to take risk into account in planning, whether that failure stems from the planners' oversight or willful attempts to deceive those holding the purse strings, suggest development scholars Bent Flyvbjerg, Nils Bruzelius, and Werner Rothengatter.

The environmental impacts of megaprojects (dams in particular) are a major source of additional cost surprises, the authors note. Environmental impact assessments are routinely prepared, but their conclusions may justifiably provoke suspicion. For instance, though developers of the Chunnel studied such factors as the impacts of changes in rail and traffic patterns on the U.K. side, "no major environmental risks were identified as a result of the assessment," the authors report. "A further investigation of environmental impacts regarding safety, noise, and air pollution resulted in an overall positive figure. …

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