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 9: How to Overcome Major Weaknesses in Mega-Projects? The Norwegian Approach

Knut Samset

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


9. How to overcome major weaknesses in mega-projects: the Norwegian approach Knut Samset 9.1 INTRODUCTION A truly successful project is one that has been implemented in accordance with its budget and time schedule, and which significantly contributes to the fulfilment of its agreed objectives. Also, it should have only minor negative effects, its objectives should be consistent with needs and priorities in society, and it should be viable in the sense that the intended long-term benefits resulting from the project are produced. These requirements were first formulated for US-funded international development projects by the USAID in the 1960s. They were subsequently endorsed by the UN, OECD and the European Commission. They are summarised in terms of five requirements or success factors that have to be fulfilled: more specifically the project’s efficiency, effectiveness, relevance, impact and sustainability. These are tough requirements that go far beyond the performance measures that are usually highlighted in the media and attract public attention when news about shortcomings in mega-projects hit the headlines. In most such cases the debate is about the projects’ efficiency measures, such as their budgetary compliance and progress, and in some cases also their costefficiency as compared with similar projects. However, these efficiency measures are only the first signs and immediate indicators of a project’s success. Clearly, they are main features of the contractual arrangements governing the implementation of the project, and therefore essential concerns both for the commissioning party and...

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