The infrastructure industry’s standard risk tool systematically understates schedule risk, and the cost-of-capital consequences run to hundreds of millions. But the fixes already exist in the profession next door, mechanical engineer Johan Landman says.
HS2 was first costed at around £33 billion in 2012, with the first trains promised for 2026. By the time its northern leg was scrapped in 2023, the projected cost of a far smaller railway had climbed toward £100 billion by some estimates, and not a single passenger had boarded. It is an extreme case, but not a freak one. On megaprojects, overruns of this kind are closer to the rule than the exception.
The evidence is overwhelming. Across a database of more than 16,000 projects in 136 countries, assembled over decades by Bent Flyvbjerg’s Oxford Global Projects, nine out of ten megaprojects overrun their budget, their schedule, or both. The average cost overrun is well over half. Barely one project in 200 delivers everything it promised on...