What can we learn from successful megaprojects?
Anders Jungar, Manager at PBI
Megaprojects are large-scale infrastructure projects with investment budgets exceeding USD 1 billion. Examples of megaprojects are high-speed railways, motorways, offshore hydrocarbon or wind development projects, airports etc. “Mega" also implies the size of the task involved in developing, planning, and managing projects of this magnitude where risks are substantial. Typically, megaprojects have a significant and long-lasting impact on society economically, environmentally, and socially, and are consequently also subject to intensive media and political attention. Despite this attention the public’s understanding of the characteristics and challenges facing megaprojects is still limited.
Many of the ongoing and completed megaprojects have faced severe cost and schedule overruns. However, the number and size of megaprojects is expected to increase globally. OECD estimates global infrastructure investment needs of US$6.3 trillion per year over the period of 2016–2030 to support growth and development. In Finland alone, an estimated 5 billion € annually will need to be invested in so called economic infrastructure projects (roads, railways etc) according to an estimate by the Foundation for project research. Some of these investments in Finland may well fulfil the criteria of a megaproject.
Megaprojects have globally been the focus of increasingly intensive research during the past years. This work has resulted in new methods and best practices for successfully designing and delivering megaprojects. Examples include new project governance and contracting models, learning across megaprojects as well as innovation as a method to handle complexity and uncertainty. Infrastructure projects in the UK (e.g. Heathrow Terminal 5, London Olympics 2012 construction program and most recently, Crossrail) have been one important arena for developing good practices as well as sharing knowledge publicly to the benefit of other projects and industries as a whole.
Megaprojects can be major creators of value in our society, but there are also numerous examples of the opposite. Despite their size and complexity, megaprojects are not all unique. This means there are opportunities for all parties in the value chain (e.g. sponsors/owners, contractors etc) to learn from successfully completed projects. The Key is to apply the most contextually relevant practices. Capabilities to develop, execute and govern megaprojects are scarce, even on a global scale. This highlights the importance of utilizing existing best practices to enable the best possible ‘value for money’ from these major investments.