Cost Overruns – Helping to Define What They Really Mean

Abstract

Civil engineers are often in the firing line for alleged cost overruns, particularly on major publicly funded infrastructure projects. This usually occurs when the final cost of a project is simply compared with the original estimate, even though this was published a long time ago, in different circumstances and for a quite different project to the one carried out. This paper proposes a systematic approach to ensure that cost overruns, should they occur, are more accurately defined in terms of when the initial and end costs are assessed, from which point of view, at which project stage, and including scope changes and financial assumptions. The paper refers to the UK’s £163 billion nuclear decommissioning programme.

Keywords: Decommissioning, Economics & Finance, Project Management

JEL Classification: O22