This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: Nine out of 10 major transportation projects go over their initial budget. This isn't always because of incompetence.
In many cases, a specific dollar figure for the project is announced too early, when there are still a lot of uncertain variables. But shaky assumptions soon become public promises, after which the cost overrun—though predictable—becomes a scandal. People look for a simple explanation or sometimes a scapegoat.
In reality, cost overruns can stem from a wide variety of causes. Some result from external factors, such as rising costs of materials, labor shortages, changing regulations or an economic downturn. Other overruns are the result of limitations or errors in the initial estimate: data was missing, studies were too preliminary or the project was not defined well enough.
Optimism also plays a role: without necessarily having bad intentions, teams and decision-makers underestimate the difficulties they'll face. Added to this are weaknesses in governance. Responsibilities are unclear, decisions are delayed and coordination is lacking.
There are also sometimes inadequate controls. Finally, some underestimates are strategic. In these cases, decision-makers present an artificially favorable estimate to make it easier to get political, social or financial acceptance of the project.
These reasons may occur simultaneously. But they leave a key question unanswered: How does an uncertain estimate become a benchmark figure and then a public promise? Research confirms the scale of the problem: cost overruns are not isolated incidents.
Extract — continue reading at the source.
