Promising Practices Promising PracticesPromising Practices
A forum for government's best ideas and most innovative leaders.

Why Mega-Projects Always End Up Costing More Than Expected

ARCHIVES
Image via Alexander A.Trofimov/Shutterstock.com

Last week the San Francisco Chronicle reported that the Transbay Transit Center, a massive transportation hub calling itself the "Grand Central Station of the West," will cost at least $300 million more than project officials estimated. One city official characterized the situation as unfortunate but said it wouldn't have a "meaningful impact" on the project. The comment may have been meant as optimism, but it also reflects the fact that enormous cost overruns have become such a normal part of urban mega-projects that they barely even register as a problem.

So how did it get to the point where the only thing we can confidently expect from a big infrastructure project is that it will cost way more than expected?

One thing's for sure: the people who predict the cost of urban mega-projects do a terrible job. Several years ago the University of Oxford scholar Bent Flyvbjerg, who's made a career researching mega-project mismanagement, analyzed 258 transportation infrastructure projects from around the world and found that nine in ten exceeded their cost estimates. The overruns were greater on rail projects than road projects but averaged 28 percent across the board.

What struck Flyvbjerg most about the problem was how very un-random it was. If people were simply very bad at estimating the costs of huge projects, then one might expect some projects to come in under budget and others over. But an under-budget mega-project is about as rare as a dodo riding a unicorn. Instead, wrote Flyvbjerg and some collaborators in 2002, it's more likely that when it comes to mega-projects, public officials engage in "strategic misrepresentation" — aka lying:

Read more at Atlantic Cities.

Image via Alexander A.Trofimov/Shutterstock.com

FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

When you download a report, your information may be shared with the underwriters of that document.