Jonathan Shuster

CEE 337 Honors Paper

December 17, 2015
The Trouble with Megaprojects

In a world with over 7 billion people and counting, civil engineers

have been pushed to find new and innovative engineering solutions to
the growing worlds infrastructure needs. The most renown of these
engineering feats are megaprojects: huge developments that are
massive in building time, cost, and proportion. Megaprojects are the
pinnacle of engineering but are often subject to delays and unexpected
costs (50% is not uncommon).1 Projects such as Londons expansion of
the tube underground (11 years, $23 billion dollars) and the new East
Bay Oakland Bridge (12 years, $6.4 billion dollars) are just two

Figure 1: East Bay Bridge, Oakland, CA

1 Bent Flyvberg. "What You Should Know About Megaprojects and Why:
An Overview." Project Management Journal, 2014, 6-19.

examples in a world that is now blossoming with megaprojects.2

Megaprojects are defined by a number of different characteristics

that set them apart from typical engineering projects. The biggest
feature that delineates megaprojects is the cost. Initially,
megaprojects were defined as costing over $1 million (mega), but as
the world has expanded and costs have inflated the original definition
of megaproject has fallen out of style.3 Now, megaprojects typically
cost $1 billion dollars or more and require massive government and/or
private funding to be completed.

2 Tim Newcomb. "The World's 25 Most Impressive Megaprojects."

Popular Mechanics. August 11, 2015.
3 See Note 1

Another defining feature of megaprojects is that they take an extended

time to construct. Most projects are scheduled to be completed
between 3-15 years, but delays often push developments back even
farther. Besides cost and time to build, megaprojects also develop a
huge public profiles. When a project costs so much to build, both the
public and the media are highly aware of the statuses of such projects.
Finally, megaprojects are extremely technologically and procedurally
complex. There are a massive number of moving parts in
megaprojects and logistical intricacy is a large reason megaprojects
are often overdue and over budget. Although financial shortcomings
and construction delays are the most evident problems with
megaprojects, these difficulties stem from a variety of factors including
competing interests, poor planning and management, and a variety
outside variables.
A large part of the reason megaprojects often tend to fail (Ill be using
fail as a substitute for finish late and over budget) is that there are a
number of different players in the planning and construction of the
project. Professor Bent Flyvbjerg of the University of Oxford has
separated these interests into four sublimes: technological, political,
economical, and aesthetic.4 The technological sublime is the
excitement and ability for engineers to build the biggest-tallestlongest-fastest thing they can.5 The political sublime describes the
tendency politicians have for building large projects to benefit their
4 Bent Flyvberg. "What You Should Know About Megaprojects and Why:
Summaries of New Research for the Reflective Practioner." Project
Management Institute. October 1, 2014.
5 Ibid.

political career. The economic sublime is the drive of the investors and
the contractors to make a profit on the project. Finally, the aesthetic
sublime is the pleasure designers and architects derive from building a
beautiful project. 6 These four groups all share in the design process
during the early stages of the megaproject, and have differing views on
the best way to complete the project on time and on budget. Too
much of any of the sublimes will result in a failure of the project; too
much technology results in cost overruns, politicians tend to push for
huge, overcomplicated projects to boost their political capital, investors
have been known to cut corners in order to reduce costs, and
architects force engineers to build with certain materials and conform
to certain design restraints that complicate the building process.7 In
order to keep megaprojects on time and on budget, it is imperative for
planners to consider the four sublimes and design a project that
successfully balances the views of differing interests.
Another large problem with megaprojects is that are they stuck in the
design of a break-fix model. This model states that project managers
and investors dont know how to deliver a successful megaproject and
so projects tend to break somewhere along the road.8 This break
happens when delays and cost overruns catch up with the scheduled
due dates and estimated costs surrounding the project. After they
break, management tries to fix the problems by reorganizing or even
refinancing the project in an effort to get it back on track. By now,
management is often locked-in to a certain feature of the project and
as time goes on, this leads to escalated commitment to this aspect
near the latter end of the project. At this point, most contractors are
too far along to drop the project all together and look for other options,
which should have been given serious consideration had management
not been so focused on a certain part of the megaproject. This type of
mismanagement is why megaprojects have been called the Vietnams
of policy and management, and leads to the thinking of theres no
turning back now.9
Another problem related to the break fix model is the idea of failing
fast vs. failing slowly. Often talked about in regards to computer
software failure, the concept of failure speed can easy be applied to
megaprojects. When a project fails slowly, it continues working right,
6
7
8
9

Ibid.
See Note 3
See Note 1
Ibid.

after but fails in strange ways later.10 A system that fails fast does
exactly the opposite; when a problem occurs, it fails right away. In
terms of megaprojects, this allows management to realize early on that
a project is not feasible before sinking too many time, money, and
effort into the break-fix model. The break-fix model is also
exceptionally wasteful and leads to the misallocation of resources
because in this model decisions are made on misinformation instead of
information. The amount of misinformation varies greatly between
projects and therefor it is not safe for us to assume that all projects are
misrepresented by the same amount. This means that we cannot
assume that we are building the best project possible, even if it
appears that way on paper. The truth is we dont know how much error
the break-fix model will create on a project, but the solution is to have
proper front-end management to minimize the chance of the project
breaking in the first place.11
Unprepared and weak management is also a contributing factor to the
downfall of many megaprojects. Most managers view megaprojects as
unique engineering feats, and overlook similar, smaller projects that
they can learn from. Management also often has only basic domain
experience and is more accustomed to similar jobs but on a smaller
scale.12 This leads to project managers who are unequipped to deal
with intricacy of a large project and ultimately the failure of
management and/or the project. An example of this is the construction
of the Sydney Opera House, which started in 1959.13 The architect of
the building was Dane Jrn Utzon, who won a contest to design the
building. Utzon had minimal knowledge in designing large venues and
his design fell out of favor part way through construction. He resigned
and left the country, while construction continued with major
alterations to his original design.14 When he resigned the total cost of
the buildings was expected to be $22.9 million Australian dollars; by
completion that number had jumped up to $103 million dollars.15 A
key part to completing a successful megaproject is hiring the right lead

10 Jim Shore, and Martin Fowler. "Fail Fast." MartinFowler.com.

September 1, 2004.
11 Ibid.
12 See Note 1
13 "Sydney Opera House - the Architect." Sydney Opera House. 2015.
14 Ibid.
15 "Jrn Utzon (1918-2008)." Danishnet.com. May 15, 2015

for the project, and being aware that firing a failing manager will not
always get the project back on track.
It is sometimes argued that megaprojects would never be
constructed if the public knew the real cost of the projects, and that
hiding the true cost and length of the project is the only way to get it
off the ground. Many proponents of this idea use the 1967 theory of
Hirschmans Hiding Hand as an excuse to build project in this manner.
The theory of Hirschmans Hand states that ignorance of future
obstacles allows management to rationally undertake a project and
that once the project is in swing, human creativity will overcome any of
the unforeseen obstacles.16 On the other hand (literally), the
previously
mentioned
professor Flyvbjerg
recently released a
paper refuting the
Hiding Hand,
claiming that
Hirschmans
finding are based
on the study of
only 11 projects,
and are thus
incorrect.17 In this
paper Flyvbjerg
Figure 3: Sydney Opera House
distinguishes
between Hirschmans Benevolent Hiding Hand and the much more
realistic Malevolent Hiding Hand. The Malevolent Hand hides
unexpectedly high costs and low benefits from planners and, according
to Flyvbjergs research is actually much more common than the
Benevolent Hand. Flyvbjerg and his colleague Cass Sunstein looked at
over 1,200 projects and found that 78% of them were subject to the
Malevolent Hand, while the remaining 22% were subject to the
Benevolent Hand.18 So in conclusion Hirschmans Hiding Hand is no
16Albert Hirschman. "The Principle of the Hiding Hand." National
Affairs, 1967.
17 Bent Flyvberg, and Cass R. Sunstein. "The Principle of the
Malevolent Hiding Hand; Or, the Planning Fallacy Writ Large." SSRN
Electronic Journal SSRN Journal, 2015.
18 Ibid.

excuse to start a project without proper front-end planning, and hoping

human nature will fix any problems that come up. It is absolutely
essential for managers to plan well at the beginning stages of the
project in order to produce a successful result.
Ultimately, the shear size of megaprojects is what creates their
downfall. These projects take so long to build that they are susceptible
to the influence of a large variety of unexpected events which ultimate
cause the project to fail.19 Megaprojects are vulnerable to a
phenomenon called Black Swan Theory, which essentially states that
highly unexpected occurrences play a vastly larger role in the outcome
of a project than regular occurrences. Along with black swan theory
comes retrospective, where humans rationalize these unlikely events
making them explainable and predictable.20 A perfect megaproject
example of this is The City of Seattles massive tunnel boring machine,
Bertha, which was out of commission for almost two years.21
Something highly unexpected (your brand new, state of the art cutter
head failing) causes a huge set back, pushing the completion of the
project almost 27 months past its original date.22 The failure is then
rationalized with the explanation that dirt got past the seals on the
cutter head, causing it to fail: something both predictable and
preventable. Other Black Swans include inflation and changing sociopolitical environments. Megaprojects take so long to plan and
construct that inflation has to be taken into account and when the
value of currency dips more than expected it can cause projects to be
massively over budget. For example, planners on Pakistans Tarbela
Dam projected seven and a half percent inflation during the
construction of the project, but the dam took eight extra years to build
and inflation actually jumped 380% over the time period.23 This
unanticipated and massive inflation rate caused the total cost of the
damn to quadruple, leaving the project both very late and over
budget.24
19 Leslie, Jacques. "The Trouble with Megaprojects." The New Yorker,
April 11, 2015.
20 Taleb, Nassim. "The Black Swan: The Impact of the Highly
Improbable." The New York Times, April 22, 2007.
21 Lindblom, Mike. "New Bertha Start Date: Nov. 23." The Seattle
Times, July 17, 2015, Local News sec.
22 Brownstone, Sydney. "Behind-Schedule Bertha to Reenter Pit Two
Weeks Late." The Stranger, August 6, 2015, Transportation News sec.
23 See note 15
24 Ibid.

Figure 4: Cost overrun is not uncommon on megaprojects

and can reach extreme levels
A changing political climate and shifting public perception also
play a role in the common failure of megaprojects. An example of this
is building the new Denver international airport in the early 1980s. In
1982 Mayor Bill McNichols announced a $1.4 billion dollar expansion of
the airport, but was voted out of office in 1983.25 The new mayor,
Federico Pea, and his experts decided that it would actually be better
for the city to build an entirely new airport. As this time, Denver was
the hub of three major airlines and the economy was poor, so general
support for the new airport was high.26 By 1987, Denver was home to
only one major commercial airline and tensions were so high that some
airlines stopped paying taxes to the city of Denver. The public was also
split over the issue, which eventually came down to a vote in 1989,
where the citizens of Denver decided to uphold the plan to build a new
airport.27 In this example, we see that changes in the socio-political
climate managed to delay the megaproject by over seven years.

25Joseph S. Szyliowicz, and Andrew R. Goetz. "Getting Realistic About

Megaproject Planning: The Case Of The New Denver International
Airport." Policy Sciences 28, no. 4 (1995): 347-67. JSTOR.
26 Ibid.
27 Ibid.

Despite common shortcomings and cost overruns, megaprojects still

manage to be a giant engine for economic development. The United
States Department of Transportation has recognized that in rebuilding
our roads, bridges, transit systems, and airports, we can spur the
creation and growth of small businesses, Americas economic
engine.28 Studies have shown that private sector productivity rises
from public infrastructure developments, and if projects are done well
they can provide significant positive spillovers to areas such as
economic development, energy efficiency, public health, and
manufacturing.29 This is particularly true in developing countries,
where large infrastructure projects can help lift a whole region out of
poverty. The estimation for infrastructure development in developing
countries is over $900 billion a year, mostly focused in Africa and
Asia.30 Thus, improving the success rate of mega projects will not only
make the projects themselves better, but also drastically improve
industries and areas connected to the projects. Correctly balancing
competing interests, frontloading quality planning, and taking
unexpected factors into consideration will significantly decrease the
failure rate on megaprojects and enhance the success of surrounding
sectors.

Bibliography
Brownstone, Sydney. "Behind-Schedule Bertha to Reenter Pit Two
Weeks Late." The Stranger, August 6, 2015, Transportation News
sec.
Flyvbjerg, Bent. "What You Should Know About Megaprojects and Why:
An Overview." Project Management Journal, 2014, 6-19.

28 Virginia Greiman. "Introduction." In Megaproject Management:

Lessons on Risk and Project Management from the Big Dig, 1-13.
Hoboken, New Jersey: John Wiley and Sons, 2013.
29 Ibid.
30 Ibid.

Flyvbjerg, Bent. "What You Should Know About Megaprojects and Why:
Summaries of New Research for the Reflective Practioner."
Project Management Institute. October 1, 2014.
Flyvbjerg, Bent, and Cass R. Sunstein. "The Principle of the Malevolent
Hiding Hand; Or, the Planning Fallacy Writ Large." SSRN
Electronic Journal SSRN Journal, 2015.
Greiman, Virginia. "Introduction." In Megaproject Management:
Lessons on Risk and Project Management from the Big Dig, 1-13.
Hoboken, New Jersey: John Wiley and Sons, 2013.
Hirschman, Albert. "The Principle of the Hiding Hand." National Affairs,
1967.
"Jrn Utzon (1918-2008)." Danishnet.com. May 15, 2015.
Leslie, Jacques. "The Trouble with Megaprojects." The New Yorker, April
11, 2015.
Lindblom, Mike. "New Bertha Start Date: Nov. 23." The Seattle Times,
July 17, 2015, Local News sec.
Newcomb, Tim. "The World's 25 Most Impressive Megaprojects."
Popular Mechanics. August 11, 2015.
Shore, Jim, and Martin Fowler. "Fail Fast." MartinFowler.com. September
1, 2004.
"Sydney Opera House - the Architect." Sydney Opera House. 2015.
Taleb, Nassim. "The Black Swan: The Impact of the Highly Improbable."
The New York Times, April 22, 2007.
Szyliowicz, Joseph S., and Andrew R. Goetz. "Getting Realistic About
Megaproject Planning: The Case Of The New Denver International
Airport." Policy Sciences 28, no. 4 (1995): 347-67. JSTOR.
Figures

Figure 1. The World's 25 Most Impressive Megaprojects. East Bay

Bridge. 2015.
Figure 2. Bent Flyvberg. The Cost of Megaprojects. 2015.
Figure 3. Michael Seebeck. Sydney Opera House at Night. 2009.
Figure 4. Bent Flyvberg. Cost Overrun. 2015.