PAPERS

What You Should Know About

Megaprojects and Why: An Overview
Bent Flyvbjerg, Sad Business School, Oxford University, Oxford, United Kingdom

ABSTRACT
This paper takes stock of megaproject management, an emerging and hugely costly
field of study, by first answering the question
of how large megaprojects are by measuring
them in the units of mega, giga, and tera, and
concluding with how we are presently entering a new tera era of trillion-dollar projects.
Second, total global megaproject spending is assessed, at US$6 to US$9 trillion
annually, or 8% of the total global gross
domestic product (GDP), which denotes the
biggest investment boom in human history.
Third, four sublimespolitical, technological, economic, and aestheticare identified
and used to explain the increased size and
frequency of megaprojects. Fourth, the iron
law of megaprojects is laid out and documented: Over budget, over time, over and
over again. Moreover, the breakfix model
of megaproject management is introduced
as an explanation of the iron law. Fifth, Albert
O. Hirschmans theory of the Hiding Hand
is revisited and critiqued as unfounded and
corrupting for megaproject thinking in both
the academy and policy. Sixth, it is shown
how megaprojects are systematically subject
to survival of the unfittest, which explains
why the worst projects get built rather than
the best. Finally, it is argued that the conventional way of managing megaprojects has
reached a tension point, in which tradition
is being challenged and reform is emerging.
KEYWORDS: megaproject management;
scale; four sublimes; iron law of megaprojects; breakfix model of megaprojects;
Hirschmans Principle of the Hiding Hand;
survival of the unfittest; tension points

Mega, Giga, Tera: How Big Are Megaprojects?

Megaprojects are large-scale, complex ventures that typically cost US$1 billion or more, take many years to develop and build, involve multiple public and private stakeholders, are transformational, and impact millions of
people.1 Hirschman (1995, vii, xi) calls such projects privileged particles of
the development process and points out that often they are trait making; in
other words, they are designed to ambitiously change the structure of society,
as opposed to smaller and more conventional projects that are trait taking,
that is, they fit into pre-existing structures and do not attempt to modify these.
Megaprojects, therefore, are not just magnified versions of smaller projects.
Megaprojects are a completely different breed of project in terms of their level
of aspiration, lead times, complexity, and stakeholder involvement. Consequently, they are also a very different type of project to manage. A colleague
of mine likes to say that if managers of conventional projects need the equivalent of a drivers license to do what they do, then managers of megaprojects
need the equivalent of a pilots jumbo jet license.2 And, just like you wouldnt
want someone with just a drivers license to fly a jumbo jet, you wouldnt want
conventional project managers to manage megaprojects.
Megaprojects are increasingly used as the preferred delivery model for
goods and services across a range of businesses and sectors, including infrastructure, water and energy, information technology, industrial processing
plants, mining, supply chains, enterprise systems, strategic corporate initiatives and change programs, mergers and acquisitions, government administrative systems, banking, defense, intelligence, air and space exploration, big
science, urban regeneration, and major events. Examples of megaprojects
are high-speed rail lines, airports, seaports, motorways, hospitals, national
health or pension information and communication technology (ICT) systems, national broadband, the Olympics, large-scale signature architecture,
dams, wind farms, offshore oil and gas extraction, aluminum smelters, the
development of new aircraft, the largest container and cruise ships, highenergy particle accelerators, and the logistics systems used to run large supply chainbased companies like Amazon and Maersk. Below, we will see just
how big megaprojects and the megaprojects business are. We will also try to
understand what drives scale.
To illustrate just how big megaprojects are, consider one of the largest dollar figures in public economic debate in recent yearsthe size of the U.S. debt
to China. This debt is approximately US$1 trillion and is considered so large
it may destabilize the world economy if the debt is not managed prudently.
With this supersize measuring rod, now consider the fact that the combined
cost of just two of the worlds largest megaprojectsthe Joint Strike Fighter
aircraft program and Chinas high-speed rail projectis more than one half of
this figure, US$700 billion (Figure 1). The cost of a mere handful of the largest

Project Management Journal, Vol. 45, No. 2, 619

2014 by the Project Management Institute
Published online in Wiley Online Library
(wileyonlinelibrary.com). DOI: 10.1002/pmj.21409

1As

a general rule of thumb, megaprojects are measured in billions of dollars, major projects in hundreds of millions,
and projects in millions and tens of millions. Megaprojects are sometimes also called major programs.
2 The colleague is Dr. Patrick OConnell, Practitioner Director of Major Programme Management at Oxford Universitys
Sad Business School.

Metaphors used and views expressed in all articles published in the Journal are the authors alone and do not reflect PMIs perspective.

USD, billions
1,190.0
Measuring rod

Megaprojects

400.0
300.0
150.0
51.0
US Debt to
China

Joint
Strike
Fighter

China
HSR

International Sochi 2014

Space
(estimate)
Station

26.0

18.3

11.5

Londons
Cross Rail

UK NHS IT

Athens
Olympics

Figure 1: Size of selected megaprojects, measured against one of the largest dollarfigures in the world, the accumulated U.S. debt to China.

megaprojects in the world will dwarf

almost any other economic figure and
certainly any investment figure.
Not only are megaprojects large,
however, they are constantly growing
ever larger in a long historical trend
with no end in sight. When New Yorks
Chrysler Building opened in 1930 at 319
meters, it was the tallest building in the
world. The record has since been surpassed seven times and from 1998, the
world record for height has significantly
been held by emerging economies, with
Dubais Burj Khalifa presently holding the record at 828 meters. This is a
160% increase in building height over
80 years. Similarly, the longest bridge
span has grown even faster, by 260%
over approximately the same period.
Measured by value, the size of infrastructure projects has grown by 1.5%
to 2.5% annually in real terms over the
past century, which is equivalent to a
doubling in project size two to three
times per century (authors megaprojects database). The size of ICT projects, the new kid on the block, has
grown much faster, as illustrated by
a 16-fold increase between 1993 and
2009 in lines of code in Microsoft Windows, from 5 to 80 million lines. Other
types of megaprojects, ranging from
the Olympics to industrial projects,
have seen similar developments. Coping with increased scale is therefore a

constant and pressing issue in megaproject management.

Mega comes from the Greek word
megas and means great, large, vast,
big, high, tall, mighty, and important. As
a scientific and technical unit of measurement, mega specifically means
one million. If we were to use this unit of
measurement in economic terms, then
strictly speaking, megaprojects would
be million-dollar (or euro, pound, etc.)
projects; indeed, for more than one
hundred years, the largest projects in
the world were measured mostly in
the millions. This changed with World
War II, the Cold War, and the Space
Race. Project costs had now escalated
to the billions, led by the Manhattan
Project (19391946), a research and
development program that produced
the first atomic bomb, and later the
Apollo program (19611972), which
landed the first humans on the moon
(Morris, 1994; Flyvbjerg, 2014). According to Merriam-Webster Dictionary, the
first known use of the term megaproject was in 1976; but before that, from
1968, mega was used in megacity;
and later, from 1982, as a standalone
adjective, indicating very large.
Thus, the term megaproject caught
on just as the largest projects were technically no longer megaprojects but, to
be more accurate, were evolving into
gigaprojectsgiga being the unit

of measurement meaning one billion.

However, the term gigaproject never
really caught on. A Google search reveals
that the word megaproject is used 27
times more frequently on the Web than
the term gigaproject. For the largest of
this type of project, a price tag of US$50
to US$100 billion is now common (e.g.,
the California and UK high-speed rail
projects), and a price above US$100 billion is not uncommon (e.g., the International Space Station and the Joint
Strike Fighter). If these were nations,
projects of such size would rank among
the worlds top 100 countries measured
by gross domestic product, larger than
the economies of, for example, Kenya
or Guatemala. When projects of such
size go wrong, entire companies and
national economies suffer.
Tera is the next unit up, and is the
measurement for one trillion (one thousand billion). Recent developments in
the sizes of the very largest projects and
programs indicate we may presently be
entering the tera era of large-scale
project management. If we consider as
projects the stimulus packages launched
by the United States, Europe, and China
to mitigate the effects of the 2008 financial and economic crises, then we can
speak in terms of trillion-dollar projects
and thus of teraprojects. Similarly, if
the major acquisition program portfolio of the United States Department of
Defense (valued at US$1.6 trillion in
2013) is considered a large-scale project,
then this, again, would be a teraproject
(United States Government Accountability Office [GAO], 2013). Projects of
this size compare with the GDPs of the
worlds top 20 nations, similar in size to
the national economies of, for example,
Australia or Canada. There is no indication that the relentless drive to scale is
abating in megaproject development.
Quite the oppositescale seems to be
accelerating.

How Big Is the Megaprojects

Business?
Megaprojects are not only large and
growing constantly larger, however, they

April/May 2014 Project Management Journal DOI: 10.1002/pmj

PAPERS

What You Should Know About Megaprojects and Why: An Overview

Type of Sublime Characteristic

Technological

The excitement engineers and technologists get in pushing the envelope for what is possible in longest-tallest-fastest types
of projects

Political

The rapture politicians get from building monuments to themselves and for their causes, and from the visibility this generates
with the public and media

Economic

The delight business people and trade unions get from making lots of money and jobs off megaprojects, including money made
for contractors, workers in construction and transportation, consultants, bankers, investors, landowners, lawyers, and developers

Aesthetic

The pleasure designers and people who love good design get from building and using something very large that is also iconic
and beautiful, such as the Golden Gate Bridge

Table 1: The four sublimes that drive megaproject development.

are also being built in ever greater numbers, at ever greater value. The McKinsey
Global Institute (2013) estimates global
infrastructure spending will be US$3.4
trillion per year between 2013 and
2030, or approximately 4% of the total
global gross domestic product, mainly
delivered as large-scale projects. The
Economist (2008) similarly estimated
infrastructure spending in emerging
economies at US$2.2 trillion annually
for the period between 2009 and 2018.
To illustrate the accelerated pace at
which spending is taking place, consider
that in the five years between 2004 and
2008, China spent more on infrastructure in real terms than during the entire
20th century, which is an increase in
spending rate of a factor of 20. Similarly,
between 2005 and 2008, China built as
many kilometers of high-speed rail as
Europe did in two decades; Europe was
extraordinarily busy building this type
of infrastructure during this period as
well. Not at any time in the history of
mankind has infrastructure spending
been this high, measured as a share of
world GDP, according to The Economist,
(2008), who calls it the biggest investment boom in history. And thats just
for infrastructure.
If we include the many other fields
in which megaprojects are a main
delivery modeloil and gas, mining,
aerospace, defense, ICT, supply chains,
mega events, and so forththen a conservative estimate for the global megaproject market is between US$6 and
US$9 trillion per year, or approximately
8% of the total global gross domestic
8

product. To put this into perspective,

consider this is the equivalent of spending five to eight times the accumulated
U.S. debt to China, every year. Thats big
business by any definition of the term.
Moreover, megaprojects have proved
remarkably recession proof. In fact, the
downturn from 2008 has helped the
megaprojects business grow further by
showering stimulus spending on everything from transportation infrastructure
to ICT. From being a fringe activity
albeit a spectacular onemainly
reserved for rich, developed nations,
megaprojects have recently transformed
into a global multi-trillion-dollar business that affects all aspects of our lives,
from our electricity bill to how we shop,
what we do on the Internet to how we
commute.
With so many resources tied up in
ever-larger and ever-more megaprojects, at no time has the management
of such projects therefore been more
important. The potential benefits of
building the right projects in the right
manner are enormous and are only
matched by the potential waste from
building the wrong projects, or building
projects erroneously. Never has it been
more important to choose the most fitting projects and get their economic,
social, and environmental impacts right
(Flyvbjerg, Bruzelius, & Rothengatter,
2003). Never has systematic and valid
knowledge about megaprojects therefore been more important to inform
policy, practice, and public debate in
this highly costly area of business and
government.

April/May 2014 Project Management Journal DOI: 10.1002/pmj

The Four Sublimes

What drives the megaproject boom
described above? Why are megaprojects so attractive to decision makers?
The answer may be found in the socalled four sublimes of megaproject
management (see Table 1). The first
of these, the technological sublime,
is a term variously attributed to Miller
(1965) and Marx (1967) to describe the
positive historical reception of technology in American culture during the
nineteenth and early twentieth centuries. Frick (2008) introduced the term
to the study of megaprojects and here
described the technological sublime as
the rapture engineers and technologists
get from building large and innovative
projects, with their rich opportunities
for pushing the boundaries for what
technology can do, such as building the
tallest building, the longest bridge, the
fastest aircraft, the largest wind turbine,
or the first of anything. Frick applied the
concept in a case study of the multi-billion-dollar New San FranciscoOakland
Bay Bridge, concluding the technological sublime dramatically influenced
bridge design, project outcomes, public
debate, and the lack of accountability
for its [the bridges] excessive cost overruns (p. 239).
Flyvbjerg (2012; 2014) proposed
three additional sublimes, beginning
with the political sublime, which here
is understood to be the rapture politicians get from building monuments to
themselves and for their causes. Megaprojects are manifest, garner attention,
and lend an air of pro-activeness to

their promoters; moreover, they are

media magnets, which appeals to politicians who seem to enjoy few things
better than the visibility they get from
starting megaprojects, except, perhaps,
the ceremonious ribbon-cutting during
the opening of one in the company of
royals or presidents, who are likely to
be present, lured by the unique monumentality and historical import of many
megaprojects. This is the type of public
exposure that helps get politicians reelected; so, therefore, they actively seek
it out.
Next, there is the economic sublime, which is the delight business people and trade unions get from making
lots of money and jobs from megaprojects. Given the enormous budgets for
megaprojects, there are ample funds
to go around for all, including contractors, engineers, architects, consultants, construction and transportation
workers, bankers, investors, landowners, lawyers, and developers. Finally,
the aesthetic sublime is the pleasure
designers and people who appreciate
good design get from building, using,
and looking at something very large
that is also iconically beautiful (e.g., San
Franciscos Golden Gate Bridge or Sydneys Opera House).
All four sublimes are important
drivers of the scale and frequency of
megaprojects described above. Taken
together they ensure that strong coalitions exist of stakeholders who benefit
from megaprojects and who will therefore work for more such projects.
For policymakers, investing in infrastructure megaprojects seems particularly coveted because, if done right,
such investing:

sound replace infrastructures that

arent (Helm, 2008, p. 1).
There is a big if here, however,
as in if done right. Only if this is
disregardedas it often is by promoters and decision makers for megaprojectscan megaprojects be seen as an
effective way to deliver infrastructure.
In fact, conventional megaproject delivery, infrastructure and other, is highly
problematic, with a dismal performance
record in terms of actual costs and benefits, as we will see below. The following
characteristics of megaprojects are typically overlooked or glossed over when
the four sublimes are at play and the
megaproject format is chosen for the
delivery of large-scale ventures:
1. Megaprojects are inherently risky due
to long planning horizons and complex interfaces (Flyvbjerg, 2006).
2. Often, projects are led by planners
and managers without deep domain
experience who keep changing
throughout the long project cycles
that apply to megaprojects, leaving
leadership weak.
3. Decision making, planning, and
management are typically multiactor processes involving multiple stakeholders, both public and
private, with conflicting interests
(Aaltonen & Kujala, 2010).
4. Technology and designs are often
non-standard, leading to uniqueness bias among planners and
managers, who tend to see their
projects as singular, which impedes
learning from other projects.3

3Uniqueness

Creates and sustains employment;

Contains a large element of domestic
inputs relative to imports;
Improves productivity and competitiveness by lowering production costs;
Benefits consumers through higherquality services; and
Improves the environment when infrastructures that are environmentally

bias is here defined as the tendency of planners and managers to see their projects as singular. This
particular bias stems from the fact that new projects often use
non-standard technologies and designs, leading managers to
think their project is more different from other projects than
it actually is. Uniqueness bias impedes managers learning,
because they think they have nothing to learn from other projects because their own project is unique. This lack of learning
may explain why managers who see their projects as unique
perform significantly worse than other managers (Budzier &
Flyvbjerg, 2013). Project managers who think their project is
unique are therefore a liability for their project and organization. For megaprojects this would be a mega-liability.

5. Frequently there is overcommitment

to a certain project concept at an
early stage, resulting in lock-in or
capture, leaving analyses of alternatives weak or absent, and leading to escalated commitment in later
stages. Fail fast does not apply; fail
slow does (Cantarelli, Flyvbjerg,
& Rothengatter, 2010; Ross & Staw,
1993; Drummond, 1998).
6. Due to the large sums of money
involved, principal-agent problems and rent-seeking behavior
are common, as is optimism bias
(Eisenhardt, 1989; Stiglitz, 1989;
Flyvbjerg, Garbuio, & Lovallo, 2009).
7. The project scope or ambition level
will typically change significantly
over time.
8. Delivery is a high-risk, stochastic
activity, with overexposure to socalled black swans; i.e., extreme
events with massively negative outcomes (Taleb, 2010). Managers tend
to ignore this, treating projects as if
they exist largely in a deterministic
Newtonian world of cause, effect, and
control.
9. Statistical evidence shows that such
complexity and unplanned events
are often unaccounted for, leaving budget and time contingencies
inadequate.
10. As a consequence, misinformation
about costs, schedules, benefits, and
risks is the norm throughout project development and the decisionmaking process. The result is cost
overruns, delays, and benefit shortfalls that undermine project viability
during project implementation and
operations.
In the next section, we will see just
how big and frequent such cost overruns, delays, and benefit shortfalls are.

The Iron Law of Megaprojects

Performance data for megaprojects
speak their own language. Nine out
of ten such projects have cost overruns; overruns of up to 50% in real
terms are common, over 50% are not

April/May 2014 Project Management Journal DOI: 10.1002/pmj

PAPERS

What You Should Know About Megaprojects and Why: An Overview

Project

Cost Overrun (%)

Suez Canal, Egypt

1,900

Scottish Parliament Building, Scotland

1,600

Sydney Opera House, Australia

1,400

Montreal Summer Olympics, Canada

1,300

Concorde Supersonic Aeroplane, UK, France

1,100

Troy and Greenfield Railroad, USA

900

Excalibur Smart Projectile, USA, Sweden

650

Canadian Firearms Registry, Canada

590

Lake Placid Winter Olympics, USA

560

Medicare transaction system, USA

560

Bank of Norway headquarters, Norway

440

Furka Base Tunnel, Switzerland

300

Verrazano Narrow Bridge, USA

280

Bostons Big Dig Artery/Tunnel project, USA

220

Denver International Airport, USA

200

Panama Canal, Panama

200

Minneapolis Hiawatha light rail line, USA

190

Humber Bridge, UK

180

Dublin Port Tunnel, Ireland

160

Montreal Metro Laval extension, Canada

160

Copenhagen Metro, Denmark

150

BostonNew YorkWashington Railway, USA

130

Great Belt Rail Tunnel, Denmark

120

London Limehouse Road Tunnel, UK

110

Brooklyn Bridge, USA

100

Shinkansen Joetsu high-speed rail line, Japan

100

Channel Tunnel, UK, France

80

KarlsruheBretten light rail, Germany

80

London Jubilee Line extension, UK

80

Bangkok Metro, Thailand

70

Mexico City Metroline, Mexico

60

High-speed Rail Line South, The Netherlands

60

Great Belt East Bridge, Denmark

50

Table 2: Large-scale projects have a calamitous history of cost overrun.

uncommon. The cost overrun for the

Channel Tunnel, the longest underwater rail tunnel in Europe, connecting the United Kingdom and France,
was 80% in real terms. The cost overruns for the Denver International Airport were 200%; for Bostons Big Dig,
220%; and for the Sydney Opera House,
1,400% (see more examples in Table 2).
10

Overrun is a problem in private as well

as public sector projects, and things are
not improving; overruns have stayed
high and constant for the 70-year period
for which comparable data exist. Geography doesnt seem to matter either;
all countries and continents for which
data are available suffer from overruns.
Similarly, benefit shortfalls of up to

April/May 2014 Project Management Journal DOI: 10.1002/pmj

50% are also common and above 50%

not uncommon, again with no signs of
improvements over time and geography
(Flyvbjerg, Holm, & Buhl, 2002, 2005).
Combine the large cost overruns
and benefit shortfalls with the fact that
business cases, costbenefit analyses,
and social and environmental impact
assessments are typically at the core
of planning and decision making for
megaprojects and we see that such analyses can generally not be trusted. For
example, for rail projects, an average
cost overrun of 44.7% combines with
an average demand shortfall of 51.4%,
and for roads, an average cost overrun
of 20.4% combines with a 50-50 risk
that demand is also incorrect by more
than 20%. With errors and biases of such
magnitude in the forecasts that form the
basis for business cases, costbenefit
analyses, and social and environmental
impact assessments, such analyses will
also, with a high degree of certainty, be
strongly misleading. (Flyvbjerg, 2009)
Garbage in, garbage out, as the saying
goes.
As a case in point, lets consider the
Channel Tunnel in more detail. This
project was originally promoted as highly
beneficial both economically and financially. At the initial public offering, Eurotunnel, the private owner of the tunnel,
tempted investors by telling them that
10% would be a reasonable allowance
for the possible impact of unforeseen
circumstances on construction costs
(The Economist, 7 October, 1989, 3738).
In fact, costs went 80% over budget for
construction, as mentioned above, and
140% over budget for financing. Revenues have been one half of those forecasted. As a consequence, the project
has proved non-viable, with an internal
rate of return on the investment that is
negative, at minus 14.5% with a total loss
to the British economy of US$17.8 billion; thus, the Channel Tunnel detracts
from the economy instead of adding to
it. This is difficult to believe when you
use the service, which is fast, convenient,
and competitive with alternative modes
of travel. But, in fact, each passenger is

heavily subsidizednot by the taxpayer

this time, but by the many private investors who lost their money when Eurotunnel went insolvent and was financially
restructured. This drives home an
important point: A megaproject may well
be a technological success, but a financial failure, and many are. An economic
and financial ex post evaluation of the
Channel Tunnel, which systematically
compared actual with forecasted costs
and benefits, concluded that the British
Economy would have been better off
had the Tunnel never been constructed
(Anguera, 2006, p. 291). Other examples
of non-viable megaprojects are Sydneys
Lane Cove Tunnel, the high-speed rail
connections at the Stockholm and Oslo
Airports, the Copenhagen Metro, and
Denmarks Great Belt Tunnel, the second-longest underwater rail tunnel in
Europe, after the Channel Tunnel.
Large-scale ICT projects are even
more risky. One in six such projects
becomes a statistical outlier in terms
of cost overrun, with an average overrun for outliers of 200% in real terms.
This is a 2,000% over incidence of outliers compared with normal and a 200%
over incidence compared with large
construction projects, which are also
plagued by cost outliers (Flyvbjerg &
Budzier, 2011). Total annual project
waste from failed and underperforming
ICT projects for the United States alone
has been estimated at US$55 billion by
the Standish Group (2009).
Delays are a separate problem for
megaprojects and they cause both cost
overruns and benefit shortfalls. For
example, preliminary results from a
study undertaken at Oxford University,
based on the largest database of its kind,
suggest that delays on dams are 45% on
average. Thus, if a dam was planned
to take 10 years to execute, from the
decision to build until the dam became
operational, then it actually took 14.5
years on average. Flyvbjerg, Holm, and
Buhl (2004) modeled the relationship
between cost overrun and length of
implementation phase based on a large
data set for major construction proj-

ects; they found that, on average, a

one-year delay or other extension of the
implementation phase correlates with
an increase in percentage cost overrun
of 4.64 percentage points.
To illustrate, for a project the size of
Londons US$26 billion Crossrail project, a one-year delay would cost an
extra US$1.2 billion, or US$3.3 million
per day. The key lesson here is that in
order to keep costs down, implementation phases should be kept short and
delays small. This should not be seen
as an excuse for fast-tracking projects,
in other words, rushing them through
decision making for early construction start. Front-end planning needs to
be thorough before deciding whether
to give the green light to a project or
stopping it before it starts (Williams
& Samset, 2010). But often the situation is the exact opposite. Front-end
planning is scant, bad projects are not
stopped; implementation phases and
delays are long; costs soar, and benefits
and revenue realization recedes into the
future. For debt-financed projects this
is a recipe for disaster, because project
debt grows, whereas there is no revenue
stream to service interest payments,
which are then added to the debt, which
increases interest payments, and so on
in a vicious cycle. As a result, many
projects end up in the so-called debt
trap, where a combination of escalating
construction costs, delays, and increasing interest payments makes it impossible for income from a project to cover
costs, rendering the project non-viable.
That is what happened to the Channel
Tunnel and Sydneys Lane Cove Tunnel,
among other projects.
This is not to say that there are no
projects that were built on budget and
on time and delivered the promised
benefits. The Guggenheim Museum Bilbao is an example of that rare breed of
project. Similarly, recent metro extensions in Madrid were built on time and
to budget (Flyvbjerg, 2005), as were
a number of industrial projects (Merrow, 2011). It is particularly important
to study such projects to understand

the causes of success and test whether

success may be replicated elsewhere. It
is far easier, however, to produce long
lists of projects that have failed in terms
of cost overruns and benefit shortfalls
than it is to produce lists of projects
that have succeeded. To illustrate this,
as part of ongoing research on success in megaproject management, this
author and his associates are trying to
establish a sample of successful projects
large enough to allow statistically valid
answers; but, thus far have failed. Why?
Because success is so rare in megaproject management that, at present,
it can only be studied as small-sample
research; whereas, failure may be studied with large samples of projects.
Success in megaproject management is typically defined as projects
being delivered on budget, on time, and
with the promised benefits. If, as the
evidence indicates, approximately one
out of ten megaprojects is on budget,
one out of ten is on schedule, and one
out of ten delivers the promised benefits, then approximately one in one
thousand projects is a success, defined
as on target for all three. Even if the
numbers were wrong by a factor of
twoso that two, instead of one out
of ten projects were on target for cost,
schedule, and benefits, respectively
the success rate would still be dismal,
now eight in one thousand. This serves
to illustrate what may be called the iron
law of megaprojects: Over budget, over
time, over and over again (Flyvbjerg,
2011).4 Best practice is an outlier, average practice a disaster in this interesting
and very costly area of management.

The BreakFix Model

of Megaproject Management
The above analysis leaves us with a
genuine paradox, the so-called megaprojects paradox, first identified by
4 The Economist (March 10, 2012, p. 55) describes the nearcertainty of large cost overruns and delays in transportation
infrastructure projects as the iron law of infrastructure projects. Our data show the iron law is not limited to infrastructure; it applies to megaprojects in general and covers benefit
shortfalls in addition to cost overruns and delays.

April/May 2014 Project Management Journal DOI: 10.1002/pmj

11

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What You Should Know About Megaprojects and Why: An Overview

Flyvbjerg et al. (2003, pp 110). On one

side of the paradox, megaprojects as
a delivery model for public and private ventures have never been more in
demand, and the size and frequency of
megaprojects have never been larger.
On the other side, performance in megaproject management is strikingly poor
and has not improved for the 70-year
period for which comparable data are
available, at least not when measured in
terms of cost overruns, schedule delays,
and benefit shortfalls.
Today, megaproject planners and
managers are stuck in this paradox
because their main delivery method
is what has been called the breakfix
model for megaproject management.5
Generally, megaproject planners and
managersand their organizations
do not know how to deliver successful megaprojects, or do not have the
incentives to do so, and therefore such
projects tend to break sooner or later,
for example, when reality catches up
with optimistic, or manipulated, estimates of schedule, costs, or benefits;
delays, cost overruns, and benefit shortfalls follow. Projects are then often
paused and reorganizedsometimes
also refinancedin an attempt to fix
problems and deliver some version
of the initially planned project with a
semblance of success. Typically, lockin and escalation make it impossible
to drop projects altogether, which is
why megaprojects have been called the
Vietnams of policy and management:
easy to begin and difficult and expensive to stop (White, 2012; Cantarelli
et al., 2010; Ross & Staw, 1993; Drummond, 1998). The fix often takes place
at great and unexpected cost to those
stakeholders who were not aware of
what was going on and were unable or
lacked the foresight to pull out before
the break.
The breakfix model is wasteful and
leads to misallocation of resources, in

5 The

author owes the term break-fix model to Dr. Patrick

OConnell, Practitioner Director of Major Programme
Management at Oxford Universitys Sad Business School.

12

both organizations and society, for the

simple reason that under this model
decisions to go ahead with projects are
based on misinformation more than on
information. The degree of misinformation varies significantly from project
to project, as documented by the large
standard deviations that apply to cost
overruns and benefit shortfalls (Flyvbjerg et al., 2002; 2005). We may therefore
not assume, as is often done, that on
average all projects are misrepresented
by approximately the same degree and,
therefore, we are still building the best
projects, even if they are not as good
as they appear on paper. The truth is,
we dont know, and often projects turn
out to bring a net loss to the economy,
rather than a gain. The cure to the
breakfix model is to get projects right
from the outset so they dont break,
through proper front-end management.

Hirschmans Hiding Hand,

Revisited
One may argue, of course, as famously
done by Hirschman (1967a, pp 1213)
that if people knew in advance the real
costs and challenges involved in delivering a large project, they probably
would never have touched it and nothing would ever get built; so, it is better
not to know, because ignorance helps
get projects started, according to this
argument. The following excerpt is a
recent and particularly candid articulation of the nothing-would-ever-getbuilt argument, by former California
State Assembly Speaker and Mayor of
San Francisco, Willie Brown, discussing
a large cost overrun on the San Francisco Transbay Terminal megaproject in
his San Francisco Chronicle column (27
July 2013, with emphasis added):
News that the Transbay Terminal
is something like $300 million over
budget should not come as a shock
to anyone. We always knew the initial
estimate was way under the real cost.
Just like we never had a real cost for the
[San Francisco] Central Subway or the
[San FranciscoOakland] Bay Bridge
or any other massive construction

April/May 2014 Project Management Journal DOI: 10.1002/pmj

project. So get off it. In the world of

civic projects, the first budget is really
just a down payment. If people knew
the real cost from the start, nothing
would ever be approved. The idea is
to get going. Start digging a hole and
make it so big, theres no alternative to
coming up with the money to fill it in.

Rarely has the tactical use by project advocates of cost underestimation,

sunk costs, and lock-in to get projects
started been expressed by an insider
more plainly, if somewhat cynically. It
is easy to obtain such statements off
the record, but few are willing to officially lend their name to them, for legal
and ethical reasons, to which we will
return later. Nevertheless, the nothingwould-ever-get-built argument has
been influential with both practitioners
and academics in megaproject management. The argument is deeply flawed,
however, and thus deserves a degree of
attention and critique. Hirschmans text
contains the classic formulation of the
argument and has served widely as its
theoretical justification, as has Sawyer
(1952), who directly inspired and influenced Hirschman.6 A recent celebration
of Hirschmans thinking on this point
may be found in Gladwell (2013).
Hirschman (1967a, pp. 1314)
observed that humans are tricked into
doing big projects by their own ignorance. He saw this as positive because,
just as humans underestimate the difficulties in doing large-scale projects
they also underestimate their own creativity in dealing with the difficulties,
he believed, and the only way in which
we can bring our creative sources fully
into play is by misjudging the nature of
the task, by presenting it to ourselves as
more routine, simple, undemanding of
genuine creativity than it will turn out
to be. Hirschman called this the prin6 Two versions of Hirschmans text exist (1967a, 1967b). The
version of the text referenced here is the one published
in Development Projects Observed (Hirschman, 1967a),
which is the original text. The differences between the two
texts are minor and are mainly due to the editing of Irving
Kristol, editor of The Public Interest at the time of publication
(Adelman, 2013, p. 405).

ciple of the Hiding Hand and it consists

of some sort of invisible or hidden
hand that beneficially hides difficulties
for uswhere the error of underestimating difficulties is offset by a roughly
similar error in underestimating our
ability to overcome the difficulties, thus
helping accelerate the rate at which
mankind engages successfully in problem-solving.
Sawyer (1952, pp. 199, 203), in a
study of early industrial infrastructure
projects that he called a work in praise
of folly, similarly identified what he
called creative error in project development as, first, miscalculation or
sheer ignorance of the true costs and
benefits of projects; second, such miscalculation being crucial to getting
an enterprise launched at all. Sawyer
argued that such creative error was
the key to building a number of large
and historically important projects,
including the Welland Canal between
Lake Erie and Lake Ontario, the Panama Canal, the Middlesex Canal, the
Troy and Greenfield Railroad, and early
Ohio roads. For these and other projects, Sawyer found that the error in
estimating costs was at least offset by a
corresponding error in the estimation
of demand (p. 200). Hirschman (1967a,
p. 16) explicitly mentioned Sawyer as an
inspiration and his creative error as
a close approximation to the Hiding
Hand principle.
It is easy to understand why
Hirschmans and Sawyers theories
have become popular, especially with
people who benefit from megaprojects.
The theories encourage promoters and
decision makers, such as Willie Brown
quoted above, to just go ahead with
projects and not worry too much about
the costs or other problems, because
the Hiding Hand will take care of them,
eventually. And, in any case, who wants
to be the killjoy stopping large projects
from going ahead by an overdose of
truth? Hirschman (1967b) was an
immediate hit with practitionersfrom
Washingtons policy establishment to
the United Nations, to the World Bank.

The head of the World Banks Economics Department told Hirschman:

Youve helped in part to remove the
unease that I have had in reflecting
on the fact that if our modern project
techniques had been used, much of
the existing development in the world
would never have been undertaken
(Adelman, 2013). Hirschmans thinking
also eventually penetrated academia.
Teitz and Skaburskis (2003) follow the
Hiding Hand logic when they ask of the
huge cost overrun on the Sydney Opera
House: Did people really think that the
Sydney Opera House would come in on
budget? Or did we all agree to accept the
deception and engage in wishful thinking in order to make something that we
really wanted happen? ... [D]o Australians really regret those dramatic sails in
the harbour? Or would they have regretted more the decision [not to build]
that would most reasonably have been
based on a fair prediction of costs?
The logic is seductive, yet precarious. In retrospect, of course Australians do not regret the Sydney Opera
House, given what it has done for Australia though, at first, the building was
not called dramatic sails in the harbour, but copulating white turtles
and something that is crawling out of
the ocean with nothing good in mind
designed by an architect with lousy
taste (Reichold & Graf, 2004, p. 168).
Non-Australians may feel regret, however; for example, the architect of the
Opera House: Whats his name? Does
anybody know? Only few do, which
seems surprising given we are talking
about the architect of arguably the most
iconic building of the 20th century. And,
if anybody knows the architect is the
Dane Jrn Utzon, how come they can
hardly ever mention another building
designed by him? Because the overrun
on the Opera House, and the controversy that followed, destroyed Utzons
career and kept him from building
more masterpieces. He became that
most tragic figure in architecture: the
one-building-architect. This is the real
regretand real costof the Sydney

Opera House, not premier Joe Cahills

deliberate deception about the cost
to get approval in Parliamentand
the consequential huge cost overrun
(Flyvbjerg, 2005).
In a meeting held in support of
Utzon at Sydney Town Hall in March
1966six weeks before the controversy
made Utzon leave Australia and the
Opera House, in the middle of construction and never to returnthe Viennaborn Australian architect Harry Seidler
said, If Mr. Utzon leaves, a crime will
have been committed against future
generations of Australians (Murray,
2004, p. 105). Seidler was more right
than he could have imagined, except the
crime would not be limited to Australiansit became a crime against lovers
of great architecture everywhere. After
winning the Pritzker Prize, the Nobel
for architecture, in 2003, Utzon again
became widely acclaimed, even in Australia, where the Sydney Opera tour
guides for years had been forbidden
to even mention his name. But it was
too late. Utzon was now 85 years old
and had not built anything major for
decades. So instead of having a whole
oeuvre to enjoy, as we have for other
architects of his caliber, we have just the
one main building. Utzon was 38 when
he won the competition for the Opera
House. How would other works by the
mature master have enriched our lives?
We will never know.
As a thought experiment, consider
the collected works of architect Frank
Gehry, who is in the same league as
Utzon; then consider which building
you would choose, if you could choose
only one, and the rest would have to go.
So if you chose, say, the Guggenheim
Museum Bilbao, then Los Angeles Disney Concert Hall, Chicagos Jay Pritzker Pavilion, Pragues Dancing House,
and Seattles Experience Music Project Museum would be eliminated. This
illustrates the high price the government of New South Wales has imposed
on the world by mismanaging the planning of the Sydney Opera House and
deliberately playing the game of cre-

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What You Should Know About Megaprojects and Why: An Overview

ative error and Hiding Hand. Even if the

Opera House is an extreme case, Sydney drives home an important point:
managing by creative error is risky and
disruptive, sometimes in drastic and
unexpected ways, and the Hiding Hand
isnt big enough to hide all, or even
most, errors.
Hirschmans and Sawyers theories
are also flawed on a more basic level,
that of validity. A close look reveals the
theories to be based on small samples
and biased data. Hirschman studied
only 11 projects or a few more if we
take into account the subprojects, and
Sawyer studied 10 to 15. This important
fact is typically ignored when the Hiding
Hand principle is discussed. Hirschman
(1967a, pp. 7, 14) seemed aware of the
weak foundations and limited applicability of the principle when he called
it speculative and useful only [u]p
to a point. To a colleague he admitted
at the time of publication that his book
was an exploration, an experiment;
to another he said he had deliberately
biased his analysis to emphasize unexpected successes (Adelman, 2013, pp.
404405). Even so, Hirschman went on
to call the Hiding Hand a general principle of action and brazenly used a
name for it with clear connotations to
Adam Smiths famous Invisible (Hidden) Hand. Evidently, the temptation
to formulate an economic law was
too strong, despite the weak and biased
data. Sawyer (1952, p. 204) warned the
reader up front that his study must be
considered a marginal and distinctly
limited note. He admitted the study
considers only a quite special kind of
case and neglects projects that were
failures in order to focus on projects that were successful in the sense
that an original gross miscalculation
as to costs ... was happily offset by at
least a corresponding underestimation
of demand. Sawyers results, thus, do
not describe a general characteristic of
large projects, but a characteristic of
his biased sample that includes only
projects lucky enough to have had large
underestimates of costs compensated
14

by similarly large or larger underestimates of demand. Some would call

this dubious data fishing, and the only
redeeming factor is that Sawyer was disarmingly honest and tongue-in-cheek
humoristic about it. He appears to not
have expected to be taken wholly seriously, which he unfortunately was by
some, including Hirschman.
Today we have much better data and
theories on megaproject performance
than at the time of Hirschman and
Sawyer. We now know that, although
there may be elements of truth in these
authors theories for certain types of
projects and contexts, their samples and
conclusions are not representative of
the project population. In particular,
their odd asymmetrical assumption that
optimism would apply to cost estimates,
yet pessimism to estimates of benefits,
has been solidly disproved by Kahneman and Tversky (1979a, 1979b) and by
behavioral economists building on their
work. They found that optimism bias
applies to estimates of both costs and
benefits. An optimistic cost estimate is
low and leads to cost overrun, whereas
an optimistic benefit estimate is high
and results in benefit shortfalls. Thus,
errors of estimation do not cancel each
other out, as Hirschman would have
it; the exact opposite happenserrors
generally reinforce each other.
Megaproject planners and managers would therefore be ill advised to
count on Hiding Hands, creative errors,
or any other general principle according
to which underestimates of costs would
be balanced by similar underestimates
of benefits. We also now know it would
be equally foolhardy to assume that
downstream human creativity may be
generally counted on to solve problems
that planners and managers overlook
or underestimate when the decision is
made to go ahead with a project. The
data show that for too many projects
with front-end problems, such creativity never materializes and projects end
up seriously impaired or non-viable.
Initial problems, if not dealt with up
front, tend not to go away. The iron

April/May 2014 Project Management Journal DOI: 10.1002/pmj

law of megaprojects, described above,

trumps Hirschmans Hiding Hand at a
high level of statistical significance, and
we know why. The Hiding Hand is itself
an example of optimism and does therefore not capture the reality of megaproject management. For such capture, and
true explanatory power, we must turn to
theories of optimism bias, the planning
fallacy, strategic misrepresentation, and
principalagent behavior.

Survival of the Unfittest

In sum, one does megaprojectsand
megaproject managementa disservice if one claims they can only be
done through the Hiding Hand, creative error, or downright deception.
It is, undoubtedly, quite common for
project promoters and their planners
and managers to believe their projects
will benefit society and they, therefore,
are justified in cooking costs and
benefits to get projects built (Wachs,
1990; Pickrell, 1992). Such reasoning is
faulty, however. Underestimating costs
and overestimating benefits for a given
project (which is the common pattern,
as described above) leads to a falsely
high benefitcost ratio for that project,
which in turn leads to two problems.
First, the project may be started despite
the fact it is not financially and economically viable. Or, second, it may
be started instead of another project,
which would have shown to yield higher
returns than the project started had the
real costs and benefits of both projects
been known. Both cases result in Pareto
inefficiency; that is, the misallocation of
resources and, for public projects, waste
of taxpayers money. Thus, for reasons
of economic efficiency alone, the argument must be rejected that cost underestimation and benefit overestimation
are justified for getting projects started.
But the argument must also be
rejected for legal and ethical reasons.
In most democracies, for project promoters, planners, and managers to
deliberately misinform legislators,
administrators, bankers, the public,
and the media about costs and benefits

would not only be considered unethical

but, in some cases also illegal, for example, where civil servants would intentionally misinform cabinet members, or
cabinet members would intentionally
misinform parliament. In private corporations, Sarbanes-Oxley-like legislation
similarly makes deliberate misrepresentation a crime under many circumstances, which in the United States is
punishable by imprisonment of up to
20 years.7 There is a formal obligation
to truth built into most democratic
constitutionsand now also in legislation for corporate governanceas
a means for enforcing accountability.
This obligation would be violated by
deliberate misrepresentation of costs
and benefits, whatever the reasons for
such misrepresentation may be. Not
only would economic efficiency suffer
but also democracy, good governance,
and accountability.
A first answer to the skeptics question of whether enough megaprojects
would be undertaken if some form of
misrepresentation of costs and benefits
was not involved is, therefore, that even
if misrepresentation was necessary in
order to get projects started, such misrepresentation would typically not be
defensible in liberal democraciesand
especially not if it was deliberatefor
economic, legal, and ethical reasons.
A second answer to the skeptics question is that misrepresentation is not necessary to undertaking
projects, because many projects exist
with sufficiently high benefits and low
enough costs to justify building them.
Even in the field of innovative and complex architecture, which is often singled
out as particularly difficult, there is the
7 The

Sarbanes-Oxley Act of 2002 pioneered this area in the

United States, but many other countries have since followed
suit with similar legislation. Section 802[a] (18 U.S.C.1519)
of the original act states that whoever knowingly alters,
destroys, mutilates, conceals, covers up, falsifies, or makes a
false entry in any record, document, or tangible object with
the intent to impede, obstruct, or influence the investigation
or proper administration of any matter within the jurisdiction
of any department or agency of the United States or any case
filed under title 11, or in relation to or contemplation of any
such matter or case, shall be fined, imprisoned not more than
20 years, or both.

Basque Abandoibarra urban regeneration project, including the Guggenheim

Museum Bilbao, which is as complex,
innovative, and iconic as any signature architecture, and was built on time
and budget. Complex rail projects, too,
including the ParisLyon high-speed
rail line and the London Docklands
light railway extension have been built
to budget. The problem is not that projects worth undertaking do not exist or
cannot be built on time and on budget.
The problem is that the dubious and
widespread practices of underestimating costs and overestimating benefits
used by many megaproject promoters,
planners, and managers to promote
their pet project create a distorted hallof-mirrors in which it is extremely difficult to decide which projects deserve
undertaking and which do not.
In fact, the situation is even worse
than that. The common practice of
depending on the Hiding Hand or
creative error in estimating costs and
benefits, thus showing the project at
its best as an interviewee put it in a
previous study, results in an inverted
Darwinism, i.e., the survival of the
unfittest (Flyvbjerg, 2009). It is not
the best projects that get implemented
in this manner, but the projects that
look best on paper, and the projects
that look best on paper are the projects
with the largest cost underestimates
and benefit overestimates, other things
being equal. But the larger the cost
underestimate on paper, the greater
the cost overrun in practice; and the
larger the overestimate of benefits, the
greater the benefit shortfall. Therefore,
the projects that have been made to
look best on paper become the worst, or
unfittest, projects in reality, in the sense
that they are the very projects that will
encounter the most problems during
construction and operations in terms
of the largest cost overruns, benefit
shortfalls, and risks of non-viability.
They have been designed like thatas
disasters waiting to happen.
The result is, as even the industrys
own organization, the Major Projects

Association, has stated that too many

projects proceed that should not have
done (Morris & Hough, 1987, p. 214).
One might add that projects also exist
that do not proceed but should have,
had they not lost out, not to better projects but to projects with better creative error; that is, better manipulated
estimates of costs and benefits.

Light at the End of the Tunnel?

Fortunately, signs of improvement in
megaproject management have recently
appeared. The tacit consensus that misrepresentation is an acceptable business model for project development is
under attack. Shortly after taking office,
U.S. President Barack Obama openly
identified the costly overruns, the
fraud and abuse, the endless excuses in
public procurement for major projects
as key policy problems (White House,
2009). The Washington Post rightly
called this a dramatic new form of discourse (Froomkin, 2009). Other countries are seeing similar developments.
Before Obama came into office, it was
not common in government or business
to talk openly about overruns, fraud,
and abuse in relation to megaprojects, although they were as widespread
then as now. The few who did so were
ostracized; however, as emphasized by
Wittgenstein (2009), we cannot solve
problems we cannot talk about. So talking is the first step.
A more material driver of improvement is the fact that the largest projects
are now so big and consequential in
relation to individual businesses and
agencies that cost overruns, benefit
shortfalls, and risks from even a single
project may bring down executives and
whole corporations. This happened
with the Airbus A380 superjumbo jet,
when delays, cost overruns, and revenue shortfalls cost the CEO and other
top managers their jobs. The CEO of
BP was similarly forced to step down
and the company lost more than half
its value when the Deepwater Horizon
offshore oil drilling rig caught fire and
caused the worlds largest oil spill in

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What You Should Know About Megaprojects and Why: An Overview

the Gulf of Mexico in 2010. At Kmart,

a large U.S. retailer, the entire company went bankrupt when a new multibillion-dollar ICT enterprise system,
which was supposed to make Kmart
competitive with Walmart and Target,
went off the rails (Flyvbjerg & Budzier,
2011). In China, corruption and related
safety issues on the countrys US$300
billion high-speed rail program have
caused massive reputational damage,
and cost the railway minister his political career in 2011. Today, if you are a
CEO, minister, permanent secretary,
or other top manager and want to be
sure to keep your job, you will want to
manage your megaprojects properly.
Episodes such as these have triggered
leaders to begin looking for better
megaproject delivery.
Even the wealth of whole cities and
nations may be affected by a single
megaproject failure. In Hong Kong,
months of obstacles during the opening of a new international airport made
traffic go elsewhere, resulting in a fall in
GNP for the entire city state. For Greece,
a contributing factor to the countrys
2011 debt default was the 2004 Olympic
Games in Athens, for which cost overruns and incurred debt were so large
they negatively affected the credit rating of the whole nation, substantially
weakening the economy in the years
before the 2008 international financial
crisis. This resulted in a double dip
and disasterfor Greece, when other
nations had only a single dip. Likewise,
in Japan in 2011, the nuclear tragedy at
Fukushima significantly and negatively
impacted the national economy as a
whole. It is becoming increasingly clear
that when megaprojects go wrong they
are like the proverbial bull in the china
shop: it takes just one bull to smash up
the entire store. It is becoming similarly
clear to many involved that something
needs to be done about his.
In the United Kingdom, at the
beginning of the century, cost underestimation and overrun were rampant in
so many projects and in so many ministries that the reliability of national bud16

gets suffered, leading the chancellor to

order a Green Book on the problem and
how to solve it (HM Treasury, 2003).
This move inspired other countries to
follow suit. Lawmakers and governments have begun to see that national
fiscal distress and unreliable national
budgets are too high a price to pay
for the conventional way of managing
megaprojects. In 2011, the UK Cabinet
Office and HM Treasury joined forces
to establish a Major Projects Authority,
with an enforceable mandate directly
from the Prime Minister to oversee and
direct the effective management of all
large-scale projects that are funded
and delivered by central government.
In 2012, the Authority established, in
collaboration with Oxford University, a
Major Projects Leadership Academy
the first of its kind in the worldto
train and authorize all UK civil servants
in charge of central government major
projects.8
Outside of government, private
finance in megaprojects has been on
the rise over the past twenty years,
which means that capital funds, pension funds, and banks are increasingly
gaining a say in management. Private
capital is no panacea for the ills in
megaproject management, to be sure;
in some cases, private capital may even
make things worse (Hodge & Greve,
2009). But private investors place their
own funds at risk; therefore, funds and
banks can be observed to not automatically accept at face value the cost and
revenue forecasts of project managers
and promoters. Banks typically bring
in their own advisers to do independent forecasts, due diligence, and risk
assessments, which are important steps
in the right direction (Flyvbjerg, 2013).
The false assumption that one forecast
or one business case may contain the
whole truth about a project is problematized. Instead, project managers
and promoters are getting used to the

8 For

full disclosure: The author was involved in the planning,

start up, and delivery of the UK Major Projects Leadership
Academy.

April/May 2014 Project Management Journal DOI: 10.1002/pmj

healthy fact that different stakeholders hold different forecasts and that
forecasts are not only products of data
and mathematical modeling but also
of power and negotiation. And why is
this healthier? Because it undermines
trust in the misleading forecasts often
produced by project promoters.
Moreover, democratic governance
is generally getting stronger around the
world. Corporate scandals, from Enron,
WorldCom, and onward have triggered
new legislation and a war on corporate deception that is spilling over into
government with the same objectives:
to curb waste and promote good governance. Although progress is slow,
good governance is gaining a foothold
even in megaproject management. The
main drivers of reform come from outside the agencies and industries conventionally involved in megaprojects
and this is good because it increases
the likelihood of success. For example,
the UK Treasury now requires that all
ministries develop and implement procedures for megaprojects that will curb
so-called optimism bias (Flyvbjerg,
2006). Funding will be unavailable for
projects that do not take into account
such bias, and methods have been
developed for doing this (UK Department for Transport, 2006). Switzerland
and Denmark have followed the lead of
the United Kingdom (Swiss Association
of Road and Transportation Experts,
2006; Danish Ministry for Transport and
Energy, 2006, 2008). In Australia, the
Parliament of Victoria has conducted
an inquiry into how government may
arrive at more successful delivery of
significant infrastructure projects (Parliament of Victoria, 2012). Similarly,
in the Netherlands, the Parliamentary
Committee on Infrastructure Projects
did extensive public hearings to identify
measures that will limit the misinformation about large infrastructure projects
presented to the Parliament, public, and
media (Dutch Commission on Infrastructure Projects, 2004). In Boston, the
government sued to recoup funds from
contractor overcharges for the Big Dig

related to cost overruns. More countries

and cities are likely to follow the lead of
the United Kingdom, Australia, Switzerland, Denmark, the Netherlands, and
the United States in coming years.
Finally, research on how to reform
megaproject managementexamples
of which have been referenced above
is beginning to positively impact practice. Such research has recently made
great strides in better understanding what causes the many failures in
megaproject delivery and how to avoid
them. For example, we now understand
that optimism bias and strategic misrepresentation are significantly better
explanations of megaproject outcomes
than previous explanations, including
Hirschmans Hiding Hand and Sawyers
creative error discussed above. And
with a better understanding of causes
a better grasp of cures has followed,
from front-end management (Williams
& Samset, 2010) to reference class forecasting (Kahneman, 2011, pp 243254;
Flyvbjerg, 2006) to institutional design
for better accountability (Scott, 2012;
Bruzelius et al., 1998). Moreover, research is beginning to help us understand success and how to replicate it.
Perhaps most importantly, researchers
have begun to take seriously the task of
feeding their research results into the
public sphere so they may effectively
form part of public deliberation, policy,
and practice (Flyvbjerg, 2012; Flyvbjerg
et al., 2012).
With these developments, things are
moving in the right direction for megaproject management. It is too early to
tell whether the reform measures being
implemented will ultimately be successful. It seems unlikely, however, that
the forces that have triggered the measures will be reversed, and it is those
forces that reform-minded individuals
and groups need to support and work
with in order to improve megaproject
management. This is the tension
point, where convention meets reform,
power balances change, and new things
are happening. In short, it is the place to
be as a megaproject planner, manager,

scholar, student, owner, or interested

citizen.9

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Bent Flyvbjerg is the first BT Professor

and founding Chair of Major Programme
Management at Sad Business School,
Oxford University and is Director of the BT
Centre for Major Programme Management.
Flyvbjerg is principal author of Megaprojects
and Risk: An Anatomy of Ambition. His
many books and articles have been translated into 19 languages and his research has
been covered by Science, The Economist,
The Wall Street Journal, The Financial Times,
The New York Times, The BBC, and many
others. Flyvbjerg has worked as advisor to
government and business, including the UK
and U.S. governments and several Fortune
500 companies. Flyvbjerg has received
numerous honors and awards. He was
twice a Fulbright Scholar and holds the
Knighthood of the Order of the Dannebrog.
He can be contacted at bent.flyvbjerg@sbs.
ox.ac.uk

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