Problem

Cost overruns in large-scale public programmes

Nature:

The estimated cost of large-scale projects when submitted to and approved by decision-making bodies tends to be lower than the final cost. This may be due to deliberate underestimating by sub-contractors, increases in the cost of wages and materials during the life of the programme, or to unforeseen research and development difficulties.

The biggest contributor to cost overruns is delays in equipment or materials delivery. Very large and complex construction projects are usually unique. Since bringing all parts and equipment the site is not feasible, each phase of the building requires on time delivery of every necessary part and piece of construction equipment. If one item is delayed, the whole project may be delayed until it arrives.

Incidence:

By October 1993, the construction of the tunnel (the "Chunnel") between Folkestone and Calais had already overrun its original projected cost by 65% and projected completion by 5 months.

Problem Type:
D: Detailed problems
Related UN Sustainable Development Goals:
GOAL 12: Responsible Consumption and Production
Date of last update
03.06.2019 – 23:21 CEST