Leland Teschler, Executive Editor
On Twitter @ DW—LeeTeschler
Governments today struggle with budgetary overruns and deficits, and the resultant wrangling has put what might be called megaprojects in the spotlight: Big bridges, high-speed rail lines, and new fighter jets that are all large-scale, complicated undertakings typically having price tags in the billions.
Of course, when a megaproject runs into trouble, the true price tag can exceed the total gross domestic product of some countries. For example, consider San Francisco’s new Bay Bridge. Originally estimated to cost $1 billion, it came in at $6.4 billion, a little less than the GDP of Kosovo. The total cost of the Joint Strike Fighter program has been estimated at $388 billion, 50% more than the initial projections and a bit more than the GDP of Austria.
The culprits usually fingered for massive cost overruns include multiple design changes, politics, and too little consideration of changing market conditions. But one interesting facet of megaprojects is that a high percentage of them are engineering efforts involving hundreds of not thousands of engineers. And engineers have a reputation for being both conservative and pragmatic – not the sort to underestimate obstacles. So it is worth pondering whether the engineers in these projects are victims of their circumstances or share some of the blame for mushrooming costs.
Insights on this subject come from University of Oxford business school professor Bent Flyvbjerg who has analyzed data on huge projects spanning 70 years. If nothing else, Flyvberg’s work shows that underestimates of problems in big projects are nothing new. He says several realities get glossed over or ignored in the execution of these boondoggles, and many of them have roots in engineering. For one thing, the technology and designs underlying megaprojects are often nonstandard or one-of-a-kind. That tends to make participants see their project as unique, so they think the lessons-learned from other projects don’t apply. Similarly, planners sometimes over-commit to specific project concepts at an early stage. The analysis of alternatives tends to be given short shrift or not done at all.
And despite engineers’ fondness for citing Murphy’s Law, evidence indicates they don’t account for Murphy in their planning. Flyvbjerg says statistical evidence shows that managers tend to ignore the unpredictable nature of big undertakings and often treat projects “as if they exist largely in a deterministic, Newtonian world of cause, effect, and control.”
All these difficulties compound, leading to misinformation about price tags, schedules, benefits. and risks. The result is a mixture of cost overruns, delays, and shortfalls in the benefits the project is supposed to deliver.
Flyvbjerg estimates that about one in ten megaprojects comes in on budget, one in ten is on schedule, and one in ten delivers promised benefits. Of course, the joint probability of a megaproject delivering on all three works out to about one in a thousand. “Even if the numbers were wrong by a factor of two, the success rate would still be dismal,” he says.
You might conclude from all this that though the engineers involved in big projects that go off the rails aren’t guiltless; there is plenty of blame to go around. The net result is that the megaprojects that get built aren’t really the most promising, but rather the ones that look best on paper. And the projects that look good on paper are those that grossly underestimate costs, overstate benefits, and don’t mention that the whole idea might be flawed.
As Flyvbjerg puts it, “They have been designed….as disasters waiting to happen.”