What is the most common cause of big projects over running on their estimated budget? For example, I recently learned that the HS2 train line in the UK will be nearly £75bn over the estimated budget! How was the estimate so wrong?

Question

What is the most common cause of big projects over running on their estimated budget? For example, I recently learned that the HS2 train line in the UK will be nearly £75bn over the estimated budget! How was the estimate so wrong?

In: Engineering

Answer 1

There is an [interesting article](http://bit.ly/19QErEn) on this subject called “curse of the megaproject”. The author claims that it’s mostly psychological factors that contribute to the ballooning of costs of big projects.

For example, planners and managers tend to see their megaprojects as “firsts”, which impedes learning from other projects. Proponents of big projects are also more likely to suffer from optimism bias, which can be disastrous for both cost estimates and benefits estimates. And there is what the author calls “inverted Darwinism” (the survival of the unfittest): very often it’s not the best projects that get chosen, but those that look best on paper, i.e. the ones with the largest cost underestimates and benefit overestimates.