Misrepresentation Drives Projects
Bent Flyvbjerg, "Misrepresentation Drives Projects." Engineering News-Record, January 5, 2004, p. 87
2 Pages Posted: 24 Jan 2016
Date Written: 2004
Recently, as I was concluding a study on megaprojects, I was made to think of Nobel Price winner F.A. Hayek's controversial article "Why the Worst Get on Top," about the selection of political leaders. Like Hayek's political leaders, we found it is not necessarily the best megaprojects that succeed. We discovered that there seemed to be a formula at work deciding which projects get built: underestimated costs plus overestimated revenues plus undervalued environmental impacts plus overvalued economic development effects equals project approval. But during project implementation, when fact catches up with fiction, the consequences of this formula are huge cost overruns, delays, revenues that don't materialize, crippling debt, and, often, endless litigation aimed at clarifying who's responsible for the mess.
Keywords: Megaprojects, project management, project finance, cost overrun, benefit shortfalls
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