Decision-Making on Mega-Projects

Decision-Making on Mega-Projects

Cost–benefit Analysis, Planning and Innovation

Transport Economics, Management and Policy series

Edited by Hugo Priemus, Bent Flyvbjerg and Bert van Wee

This book enlarges the understanding of decision-making on mega-projects and suggest recommendations for a more effective, efficient and democratic approach. Authors from different scientific disciplines address various aspects of the decision-making process, such as management characteristics and cost–benefit analysis, planning and innovation and competition and institutions. The subject matter is highly diverse, but certain questions remain at the forefront. For example, how do we deal with protracted preparation processes, how do we tackle risks and uncertainties, and how can we best divide the risks and responsibilities among the private and public players throughout the different phases of the project?

Chapter 2: Management Characteristics of Mega-Projects

Hans de Bruijn and Martijn Leijten

Subjects: business and management, operations management, development studies, development economics, economics and finance, development economics, public sector economics, regional economics, transport, environment, transport, urban and regional studies, transport


Hans de Bruijn and Martijn Leijten 2.1 INTRODUCTION Over the years the development of mega-projects has presented us with some of the most persistent problems of our times. Cost overruns, delays, use and revenues falling short, and even technical failure – sometimes with devastating consequences – plague our progress. In this chapter we provide an overview of the uncertainties and the management dilemmas many project owners or commissioners encounter. There are at least two generically formulated pitfalls in the implementation of mega-projects: ● ● The project is unmanageable in terms of time or money. This can have many causes that often have to do with the technical and social complexity of the project and its environment. Most implementation problems come into this category. An example of an important factor in technical complexity is the extent of technical uncertainty. In social complexity such a factor can be, for instance, the extent to which there is disagreement between the parties involved regarding the desirability and design of the project. The costs involved in a project may be well managed during the setting up of the project, but after the planning has been completed it turns out that the project is much less cost-effective than originally thought – for example because the number of users of the completed project falls short. This is also an aspect of manageability. The project is impoverished as to its substance: to prevent unmanageability it has too little ambition, is not sufficiently future-oriented. The outcome would have had greater added value...

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