Are funds not secured in advance in legally binding contracts so an investor can’t pull out mid-project? Shouldn’t all the funds be in a stable asset from the outset, as opposed to something that’s susceptible to valuation fluctuations that could cause their purchasing power to shrink mid-project? Wouldn’t costs (materials, labor, etc.) be contractually locked in before breaking ground?
It just seems like there must be a way of doing this that ensures $1B of work doesn’t just get abandoned.
In: Economics
A lot of times, contractors bail, cost rises, issues come up, project costs balloon, investors bail or go bankrupt, etc etc. It’s not easy to accurately forecast anything that’s a multibillion dollar project.
Sure there are steps to remediate if anyone breaks their contract but that costs more time and money. Let’s not ignore the sunk cost fallacy.
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