FACTS: 5 interesting things to know about Megaprojects

Megaprojects are a defining feature of modern society, here we share some interesting facts that Construction and Built Enviroment Professionals should know.

1. Definition of a Megaproject

With the explosion in urban populations comes the need to provide infrastructure on a massive scale for inhabitants. Roads, tunnels, dams, rail networks, airports, power plants, and even entire cities are all required, and the budget for these far exceeds the infrastructure of the past. A loose definition of a megaproject is that it costs over $1 billion, but in the case of developing nations, a megaproject can cost less (say, in the region of $100 million.)

2. The largest Mega Infrastructure Project in 2022

The world is building state-of-the-art infrastructure at a breakneck speed and a booming construction industry across the globe brings some incredible construction projects into the spotlight. Each year, the world’s largest construction projects are being pitched, built, and completed.

The California High Speed Rail (HSR) has been hotly contested and even protested by many Californians. The original proposal for the HSR was to connect major city centers from San Diego all the way north to areas like San Francisco. The idea behind a large transportation build in California has floated around for decades but in 2008 voters narrowly voted in favor of the rail and $10 Billion in funding was secured.

The California HSR is still in motion, and construction continues to move forward. However, the original blueprints for the rail are not going to come to life any time soon. Much of the project has been halted, and a project that was once projected to cost $33 Billion dollars is now prediction to cost just over $98 Billion, making it the largest Mega Infrastructure Project in active construction

In addition, construction is expected to take 13 years longer than pitched in 2008 – now targeted for completion in 2033.

3. U.S. Mega Infrastructure Projects costs much more compared to its peers

The U.S. spends more per mile on infrastructure projects than its peers, here is why

America’s sky-high per-mile spending is partly the result of its wealth as a country — the richer it became, the fancier highways it built (think noise walls and stylized overpass architecture).
The “rise of the citizen voice.” The 1970s brought a wave of federal and state legislation (the National Environmental Policy Act being the most prominent) that gave residents and activists a greater say in public decision-making. While these new laws surely brought some benefits — particularly to project neighbors — they also added time and expense.

4. South Africa’s failure rate for megaprojects is similar to the global norm

Dr Willem Louw, a former MD of Sasol Technology and a former non-executive director of Group 5. Conducted research on the perceptions of 26 executives with circa 250 years of combined megaproject experience.

These executives played key roles on six South African megaprojects completed since 2006. The industry sectors that were represented in the selection of projects analyzed in the research were mining and minerals (coal), energy (fuels and petrochemicals, i.e., wax from natural gas), transport (rail and pipeline), and energy (pumped-storage power generation).

Using cost, schedule, and operability information available in the public domain, it was found that the split between success and failure for South African megaprojects was reasonably similar to the global norm for failed megaprojects, i.e. 65%.

5. Cost-time framing does not necessarily capture the true value of Megaproject.

Framing the success of infrastructure megaprojects around whether they are completed on time and to budget is a considerable limitation that may warp our understanding of success. If a bridge is built to link two towns, people traveling between them using the new bridge will save time and fuel over a longer route. A new transport route may boost the nearby economy, creating local jobs. Cost-time framing does not capture this.

In order to take these results into account, large projects are often subject to a cost-benefit analysis. This is the comparison of the costs involved in building and operating the infrastructure against its benefits.

For a simple project like a primary school, cost and benefit are easy to establish. On the cost side is the construction and operations. In terms of benefits, a certain number of children will be educated, and a certain number of jobs will be created.

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However, the benefits of a large infrastructure project, like a bridge, are very hard to predict and extremely subjective. One of the towns linked by the bridge may be affluent and another deprived, so by connecting the two together and reducing commuting times, the deprived town will receive a boost. People living there may have better access to jobs, and the town itself may become regenerated. However, this might also lead to house prices rising and subsequent gentrification, displacing previous communities.

With many megaprojects in the works, governments and the private sector are rising to the challenges of the modern world. As the world population grows exponentially, the need for megaprojects to provide key infrastructure will likely grow. Additionally, the impact of human activity on the environment (and, consequently, the impact of megaprojects themselves) will facilitate the need for megaprojects that have sustainability at the core of their vision.