Technical Note

Managing the Cost of Power Transmission Projects:

Lessons Learned
Hani M. Gharaibeh, Ph.D. 1
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Abstract: A major driver to project success is the ability to manage the project cost effectively. Despite the agreement among scholars and
practitioners on the importance of managing the project cost, excessive cost overruns continue to occur on major power transmission projects.
In this paper, the author, through a Delphi method, will discover problems of managing the project cost, suggest solutions to
overcome these problems, and identify lessons learned from these projects. The study was conducted with two different project teams
in the same organization in Canada. Key findings from this study will highlight similarities and differences between the two cases in terms
of how each team managed the project cost and learned from it. The paper will contribute to the body of knowledge by identifying lessons
learned from power transmission projects on how to manage the project cost and by suggesting solutions to overcome the problem of cost
overrun in these projects. DOI: 10.1061/(ASCE)CO.1943-7862.0000665. © 2013 American Society of Civil Engineers.
CE Database subject headings: Construction costs; Electric transmission structures; Electric transmission lines; Construction
management.
Author keywords: Cost overrun; Cost control; Lessons learned; Underestimation; Power utility.

Introduction
Project cost control is a cornerstone of successful delivery for any
project, yet we continue to see problems of cost overrun in a variety
of projects across the world and in several industries including
oil and gas, telecommunication, manufacturing, and information
technology, among several other industries. Among the industries
that gained considerable attention during the past few years is the
power utility industry.
High-voltage power transmission projects are gaining a lot of
attention in Canada due to their significance to the public and
the urgent need to upgrade the transmission grid across several
Canadian provinces to cope with the huge expansion in residential
and industrial infrastructure. The Canadian transmission system is
old, congested, and inefficient. The upgrading of existing transmis-
sion facilitates in Canada for the last 25 years was insufficient and
resulted in the overloading of the national grid. As a result, the
transmission system in Canada needs massive upgrade and expan-
sion (Alberta Economic Development Authority 2004). Although
there is a strong belief in the urgent need to execute power trans-
mission projects, the question of how much it costs is a growing
concern for transmission facility owners (TFOs), industry regula-
tors, and the public unions. As a result, the utility regulators and
TFOs are putting enormous pressure on all project stakeholders to
control the costs.
To understand the problems and challenges associated with con-
trolling the cost of transmission projects and the lessons learned on
how to control the project costs, the author conducted two Delphi
1
Managing Director, PMPC Consulting Inc., 47 Citadel Hills Green,
NW, Calgary, AB T3G 4J6, Canada. E-mail: hani@pmpc-inc.com
Note. This manuscript was submitted on November 2, 2012; approved
on December 10, 2012; published online on December 12, 2012. Discus-
sion period open until January 1, 2014; separate discussions must be sub-
mitted for individual papers. This technical note is part of the Journal of
Construction Engineering and Management, Vol. 139, No. 8, August 1,
2013. © ASCE, ISSN 0733-9364/(5)/$25.00.
studies with two different project teams involved in two major
transmission projects in western Canada. The purpose of this study
was to understand problems and challenges faced by project teams
in controlling costs, suggest solutions to overcome these problems,
and identify lessons learned.
Methodology
In this research, a Delphi method was used. The Delphi method is
an iterative process used to collect and distill the judgments of
experts using a series of questionnaires incorporating feedback
from previous rounds of questions. The questionnaires are designed
to focus on problems, opportunities, solutions, or forecasts. Each
subsequent questionnaire is developed based on the results of
the previous questionnaire. The process stops when the research
question is answered, when consensus is reached, when theoretical
saturation is achieved, or when sufficient information has been
exchanged. Gustafson et al. (1973), Skulmoski et al. (2007), and
Rowe and Wright (1999).
Before starting the Delphi study, the author collected internal
documents, polices, and procedures applied by the company to
understand the current process of cost management within the
organization. The analysis of these documents highlighted the
problem of cost overruns and the lack of cost management on each
project, which was attributed to such reasons as poor estimates,
design errors and rework, poor productivity, and unclear scope
of work. For further details on this, the reader is encouraged to
see Gharaibeh and Cow Falls (2011).
A sample of each project team was selected to represent various
project departments involved in the project including people from
engineering, procurement, construction, and project control and
project management. Team members were contacted and asked
to participate in this study. Fifteen people agreed to participate
in the Delphi study for project A and 12, for project B.
The following key issues were investigated in the three-round
Delphi study:

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 • Problems and challenges that prevented the project team from
controlling the project cost and resulted in exceeding the project
budget;
• Solutions and recommended actions that should be adopted by
the project team to be able to control the project cost and mini-
mize variances to the project budget;
• Lessons learned from the project that should be implemented in
future projects to help in managing the project cost.
To deal with the issue of bias in the data collection process, the
author adopted the following key steps: (1) The sample was care-
fully selected from a variety of people with diversified skills from
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different departments within the organization (i.e., engineering pro-
curement, construction, project controls and project management);
therefore, the feedback reflected variety of opinions and perspec-
tives on any certain point. (2) The author validated the results from
one case (i.e., one project team) with the opinions and data col-
lected from another case (different project team) to compare simi-
larities and differences in the responses. (3) The author used
triangulation by validating the results of the Delphi study against
other methods used in the research study such as case studies and
focus groups.
The first round of the Delphi study used a fully unstructured
format to try to collect answers on the preceding issues. Responses
were collected, and all problems, solutions, and lessons learned
were summarized and grouped into certain categories based on
certain identified themes (e.g., estimate, scope, schedule, people,
process). The second round presented the results obtained from
the first round to the team with the aim to rank the items identified
according to the degree of importance and relevance based on each
participant’s own judgment and expert opinion. Participants were
given the chance to comment on the items identified, eliminate
any of the items, or add new items that were not originally listed.
The result of round one identified 30 problems, 25 solutions, and
20 lessons learned.
All responses from round two were collected, and a score was
calculated for each item based on the unique ranking numbers as-
signed by each participant. The ranking number was a number from
1 to 10 with 1 being the most important and 10 being the least im-
portant item. An average score was then calculated for each of the
problems, solutions, and lessons learned identified by the project
team to represent the group ranking of all project team members.
The average score was calculated by adding up the individual
scores (ranking numbers) from each participants and dividing this
by the total number of participants. The top 10 problems, top 10
solutions, and top 10 lessons learned were selected for the third
round of the Delphi study.
In round three the team was asked to assign a percentage/weight
to represents the degree to which each respondent agrees/disagrees
with the group ranking identified by the project team for each item.
The higher the percentage, the more the participant is in agreement
with the statement indicated. All responses were then gathered
and analyzed collectively. An average weight was calculated by
adding all the individual weights assigned by each participant
and dividing by the total number of participants. Because the rank-
ing number was assigned in ascending order (i.e., the lower the
number, the more important the item, whereas the higher the per-
centage, the more important the weight of this item), it was neces-
sary to reverse the ranking numbers so that 10 is the most important
item and 1 is the least important item. This reverse rank was
necessary to achieve before multiplying the reversed score by the
average weight to reach a weighted score. The final step was to
rerank the items and assign a revised ranking number based on
the highest weighted score ranked No.1 and the lowest weighted
score ranked No. 10.
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Discussion and Analysis
Having completed the two cases and conducted the analysis, the
following were noted with regard to the main three questions con-
sidered in the Delphi study:
Problems of Controlling the Project Cost
In terms of similarities between the two projects; six problems were
identified that were similar across the two cases; however, they had
different ranking numbers for each case. Moreover, in all cases the
first problem in terms of managing project costs was “high em-
ployee turnover.” In addition, project team members in both cases
agreed with close ranking number (5 and 6) that continuous design
changes in the late engineering phase were a major problem in con-
trolling project costs.
By looking across the organization, we can easily notice that
high employee turnover is a corporate challenge regardless of
the project. The turnover rate in this organization was noticeably
higher than other organizations, with at least one or two persons
leaving the company each week at the time the study was con-
ducted. The high turnover has a severe impact on the productivity
of the organization as new employees joining the project will need
sufficient time to understand the project and most often end up
learning by themselves as the systems and processes are not adap-
tive to learning, which ultimately results in hours billed to the client
with very low earned value to them. This represented additional
cost to the project.
In terms of differences between cases, the following two prob-
lems were ranked as significantly less important in affecting the
final costs of the project by project team B as opposed to project
team A. Those problems were the heavy regulations of the industry
and the unclear scope of work. These two problems were ranked: 2
and 4, respectively, in case A and 6 and 10, respectively, in case B.
This could be explained by fact that project A is more complex in
scope when compared with project B.
Tables 1 and 2 demonstrate how project teams A and B rank
these problems.
Solutions to Control the Project Cost
In terms of similarities between the two projects, the following
solutions were seen as almost equally important in both projects
A and B: a clear understanding of the scope of work, documenta-
tion of assumptions in the scope of work and estimates, alignment
with key project stakeholders, and staff retention. The ranking
numbers were 1, 5, 7 and 9, respectively, for project A and 3,
4, 9 and 10, respectively, for project B. The first two solutions
are scope related and therefore important to both projects, as man-
aging the scope of work is essential for controlling project costs.
The third problem is industry related and therefore would impact
any project in this industry. The fourth problem is corporate related
and has a severe impact on all projects across the organization.
In terms of differences between the two projects: the following
solution was seen as more important by project team A compared
with project team B: site visits by estimators. This is explained by
the fact that project A suffered from a poorly done estimate more
than project B, and it was seen as beneficial for the estimator to visit
the site prior to putting together the estimates. Other solutions iden-
tified by project A are the role of the project control group in
the preparation of the estimate and spending more time to create
realistic estimates. This was more a topic of focus by project team
A as there was a greater concern to develop accurate estimates at an
early phase of the project. Tables 3 and 4 highlight the solutions
 Table 1. Top 10 Most Important Problems in Managing Project Cost (Project A)
Group Reversed Average Weighted Revised
rank Problems score weight score rank
1 High employee turnover rate especially in engineering and procurement 10 74 736 1
2 Restrictions imposed by heavily regulated industry beyond the control of the project team 9 80 720 2
3 Shortage of staff in general and senior staff in particular 8 75 600 3
4 Original scope of work not sufficiently detailed by the client to fully define the work required 7 74 520 4
5 Changing key project players and senior team members in the middle of the project 6 67 403 5
6 Continuous design changes in the late detailed engineering phase leading to cost variances 5 76 379 6
7 Inaccurate initial estimate (i.e., missing items, underestimation of other items) 4 66 263 7
8 Submission by subcontractors of inflated bid prices that do not reflect true costs 3 61 184 8
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9 Changes made by the regulator to the requirements of the project during the execution phase 2 80 160 9
10 Overly optimistic in terms of achieving key schedule milestones (i.e., permits and license, 1 64 64 10
equipment delivery dates, in service date)

Table 2. Top 10 Most Important Problems in Managing Project Cost (Project B)

Group Average Reversed Weighted Revised
rank Problems weight score score rank
1 High employee turnover rate, especially in engineering and procurement 86 10 858 1
2 Misunderstanding/wrong interpretation of the scope of work by the contractor 69 9 618 3
3 Changing key project players and senior team members in the middle of the project 83 8 667 2
4 Overly optimistic in terms of achieving key schedule milestones (i.e., permits and license, 83 7 578 4
equipment delivery dates, in service date)
5 Poor procurement practices (i.e., too many purchase orders to buy small value items, zero dollar 70 6 420 5
purchase orders)
6 Restrictions imposed by heavily regulated industry beyond the control of the project team 76 5 379 6
(i.e., permits and license, landowner issues, environmental issues, hearing process)
7 Continuous design changes in the late detailed engineering phase leading to cost variance 69 4 277 7
8 Poorly defined scope of work for subcontractors/suppliers 59 3 178 8
9 Lack of contingency and escalation for material and construction labor costs in the initial estimate 50 2 100 9
10 Original scope of project not sufficiently detailed by the client to fully define the work required 65 1 65 10

Table 3. Top 10 Most Important Solutions for Managing Project Cost (Project A)
Group Reversed Average Weighted Revised
rank Solutions score weight score rank
1 Obtain clear understanding of scope of work and client requirements upfront 10 94 940 1
2 Heavily involve engineering and project controls during the process of estimation 9 81 733 2
3 Spend sufficient time detailing and clarifying subcontractor’s scope of work to ensure it 8 76 611 3
captures all work required
4 Attach a sufficiently detailed estimate assumptions document with each estimate produced 7 69 485 5
5 Spend more time on creating realistic estimates based on sound conceptual design 6 81 488 4
6 Communicate budget information to lead engineers, project managers, and key project 5 66 332 6
members once the estimate is approved
7 Require that estimators visit project sites before developing the estimate 4 56 226 8
8 Establish better alignment with key project stakeholders 3 74 221 7
9 Work on staff retention to accumulate knowledge gained through experience 2 70 140 9
10 Establish better integration between various departments 1 61 61 10

proposed by each project team to deal with the problem of cost
overrun.
Lessons Learned to Control the Project Cost
Due to similarities between the two projects, the following les-
sons were ranked as equally important by the two project teams:
continuous design changes lead to engineering redesign, high
employee turnover rate results in lower productivity, develop es-
timates consistently with quantity-tracking concept, and absence
of on-site storage yard leads to lost or stolen materials. Project A
ranked those lessons at 1, 2, 6, and 7, respectively, and project B
ranked them at 1, 3, 6, and 7, respectively. The first lesson
learned regarding continuous design change was a client-related
issue that was obvious on both projects. This was because the
client was the same on both projects. The second lesson learned
with regard to employee turnover is an organizational challenge
that applies to all projects. The third and fourth lessons learned
were process-related lessons that had to do with internal com-
pany procedures and policies that affected both projects. These
lessons were similar between the two projects because they were
both conducted in the same organization; therefore, all the
organizational issues were applicable to both projects to a certain
extent.
In terms of differences between the two projects, the follow-
ing lessons learned were different in terms of ranking: Provide

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 Table 4. Top 10 Most Important Solutions in Managing Project Cost (Project B)
Group Average Reversed Weighted Revised
rank Solutions weight score score rank
1 Spend sufficient time detailing and clarifying subcontractor’s scope of work to ensure it captures 18 10 183 2
all work needed
2 Obtain clear understanding of scope of work and client requirements upfront 13 9 120 3
3 Attach a sufficiently detailed estimate assumptions document with each estimate produced 12 8 93 4
4 Communicate budget information to lead engineers, project managers, and key project members 27 7 187 1
once the estimate is approved
5 Develop better communication between disciplines, departments, and project teams 10 6 60 7
6 Commit members to the team (do not move them between projects before completion of project) 10 5 50 8
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7 Require that estimators visits project sites before developing the estimate 21 4 83 5
8 Establish better integration between various departments (i.e., engineering, procurement, 22 3 65 6
construction)
9 Work on staff retention to accumulate knowledge gained through experience 12 2 23 10
10 Establish better alignment with key project stakeholders 25 1 25 9

sufficient training and mentorship was ranked at 3 in project A and
8 in project B. This was due to the sophisticated scope of work
and complexity of project A, which required special training
and constant mentoring of new team members to be able to learn
quickly. In project B the scope of work was less complex, and the
project suffered from continuous delays, so there was sufficient
time for training and mentorship. The second lesson was that
optimistic schedules and estimates lead to cost variances. This was
ranked at 4 by project team B and 8 by project team A. This
was explained by the significant impact of the regulatory process
in the delivery of project B as there were major delays in obtaining
permits and license for construction and meeting construction dates
and project completion date. Tables 5 and 6 highlight the lessons
learned in controlling project costs on each project.

Table 5. Top 10 Most Important Lessons Learned in Managing Project Cost (Project A)
Group Reversed Average Weighted Revised
rank Lessons learned score weight score rank
1 Continuous changes in project objectives, scope, and client requirement lead to engineering redesign. 10 24 243 1
2 High employee turnover rate results in lower productivity in the project and leads to additional cost. 9 26 231 2
3 Provide sufficient training and mentorship to new members joining the project team to increase their 8 27 217 3
productivity
4 Clearly define lines of accountability for each project team member 7 26 180 4
5 Develop estimates consistently with quantity-tracking concept, project execution plan, and scope 6 20 120 6
of work
6 Streamline the process of preparing issued for construction drawings (IFC) packages so it arrives on 5 26 129 5
site in a timely manner
7 Absence of a centralized storage yard on site leads to material being lost or stolen from the project. 4 23 91 7
8 Optimistic schedules and estimates lead to significant cost variance as they do not take into account 3 24 73 8
various factors that could affect the project
9 Regulatory process imposes restrictions that will result in project schedule delays and additional costs 2 21 43 9
incurred
10 Applying quantity-tracking concept helps to monitor changes of material and construction labor 1 26 26 10
quantities

Table 6. Top 10 Most Important Lessons Learned in Managing Project Cost (Project B)
Group Average Reversed Weighted Revised
rank Lessons learned weight score score rank
1 Continuous changes in project objectives, scope, and client requirements lead to engineering redesign 89 10 892 1
2 High employee turnover rate results in lower productivity in the project and leads to additional cost 90 9 810 3
3 Always review engineering man-hour estimates to make sure they reflect actual project scope before 83 8 660 2
estimate is approved
4 Optimistic schedules and estimates lead to significant cost variance as they do not take into account 87 7 607 4
various factors that could affect the project
5 Regulatory process imposes restrictions that will result in project schedule delays and additional costs 88 6 525 5
incurred
6 Absence of a centralized storage yard on site leads to material being lost or stolen from the project 63 5 313 7
7 Develop estimates consistently with quantity-tracking concept, project execution plan, and design bias 79 4 317 6
memorandum
8 Provide sufficient training and mentorship to new members joining the project team to increase their 83 3 250 8
productivity
9 Applying quantity-tracking concept helps to monitor changes of material and construction labor 81 2 162 9
quantities
10 Remove barriers between client and contractor to work as one project team 67 1 67 10

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 Conclusions
The problem of cost control is a complex and sophisticated problem
associated with so many internal and external factors, such factors
include government involvement, project execution strategy, corpo-
rate culture, organizational processes, corporate information sys-
tems and tools, and human behaviour. To address this problem
at a project level requires involvement and collaboration from
the project team and all stakeholders. Therefore, it becomes crucial
for the project team to improve its learning skills on how to deal
with the problem on an individual level, a group level, and an
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organizational level.
This research sheds light on the scarce literature in organiza-
tional learning in major engineering and construction projects.
Prior to conducting this study, there was limited information
available on what makes project teams learn from problems re-
lated to cost overrun on major projects in Canada. Although we
know the kind of problems normally faced on a project, the fact
that we still continue to see cost overruns on these projects in-
dicates a failure to learn lessons. This paper helped to identify
lessons learned from existing projects in the power transmission
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J. Constr. Eng. Manage., 2013, 139(8): 1063-1067
industry and how to apply such lessons to improve project learn-
ing. Moreover, this paper contributed to the profession of con-
struction engineering and management by identifying industry
practices to be implemented on major projects and to minimize
cost overruns.
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