Business of Blowouts: why cost overruns occur

Business of Blowouts: why cost overruns occur
Getting estimates wrong is a key reason why projects blow out.
Oliver Lewis
It’s been called the iron rule of megaprojects. From the new Christchurch stadium, Te Kaha, to roading and rail projects like Transmission Gully, the Waikato Expressway and the City Rail Link (CRL), cost and time overruns – or blowouts, as they’re colloquially known – have become so common as to be expected. Some commentators have even suggested a cynical rule of thumb for infrastructure pricing: take the announced cost and double it. A BusinessDesk analysis looking at the first announcement to cost a...

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