Bent Flyvbjerg - Megaprojects and Risk: An Anatomy of Ambition

Megaprojects and Risk

Megaprojects and Risk provides the first detailed examination of the phenomenon of megaprojects. It is a fascinating account of how the promoters of multibillion-dollar megaprojects systematically and self-servingly misinform parliaments, the public and the media in order to get projects approved and built. It shows, in unusual depth, how the formula for approval is an unhealthy cocktail of underestimated costs, overestimated revenues, undervalued environmental impacts and overvalued economic development effects. This results in projects that are extremely risky, but where the risk is concealed from MPs, taxpayers and investors. The authors not only explore the problems but also suggest practical solutions drawing on theory and hard, scientific evidence from the several hundred projects in twenty nations that illustrate the book. Accessibly written, it will be essential reading in its field for students, scholars, planners, economists, auditors, politicians, journalists and interested citizens.

BENT FLYVBJERG is Professor in the Department of Development and Planning at Aalborg University, Denmark, and author of the highly successful Making Social Science Matter (Cambridge, 2001) and Rationality and Power (1998).

NILS BRUZELIUS is Associate Professor at Stockholm University and an independent consultant on transport and planning.

WERNER ROTHENGATTER is Head of the Institute of Economic Policy Research and of the Unit on Transport and Communication at the University of Karlsruhe, Germany.

Megaprojects and Risk

An Anatomy of Ambition

Bent Flyvbjerg

Nils Bruzelius

Werner Rothengatter

University Printing House, Cambridge CB2 8BS, United Kingdom

Published in the United States of America by Cambridge University Press, New York

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Information on this title: www.cambridge.org/9780521804202

Bent Flyvbjerg, Nils Bruzelius, Werner Rothengatter 2003

This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press.

First published 2003

13th printing 2013

Printed in the United Kingdom by Clays, St Ives plc.

A catalogue record for this publication is available from the British Library

Library of Congress Cataloguing in Publication data

Flyvbjerg, Bent.

Megaprojects and risk: an anatomy of ambition / by Bent Flyvbjerg, Nils

Bruzelius, Werner Rothengatter.

p. cm.

Includes bibliographical references and index.

ISBN 0 521 80420 5 ISBN 0 521 00946 4 (pb.)

1. Project management. 2. Risk management. I. Bruzelius, Nils. II. Rothengatter, Werner. III. 'Title.

HD69.P75 F59 2002 658.404dc21 2002074193

ISBN 978-0-521-00946-1 Paperback

Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate. Information regarding prices, travel timetables and other factual information given in this work are correct at the time of first printing but Cambridge University Press does not guarantee the accuracy of such information thereafter.

Contents

Figures

Tables

Acknowledgements

We wish to thank the people and organisations who helped make this book possible. Special thanks must be given to Patrick Ponsolle and John Noulton, of Eurotunnel, Mogens Bundgaard-Nielsen, of Sund & Blt Holding, and Ole Zacchi, of the Danish Ministry of Transport. Not only did they and their staff help us with data for the books case studies, they also gave critical comments on an earlier version of the books manuscript.

We also wish to thank Martin Wachs, of the University of California at Berkeley, and Don Pickrell, of the Volpe National Transportation Systems Center at Cambridge, Massachusetts, for their comments on our analysis of cost overrun. Per Homann Jespersen, of Roskilde University, provided helpful input to our considerations regarding environmental impacts and risks. Roger Vickerman, of the University of Kent at Canterbury, gave valuable comments on the chapter about regional and economic growth effects. Thanks are due as well to the following colleagues for their kind help at various stages in the research and writing process: Jim Bohman, Irene Christiansen, John Dryzek, Raphael Fischler, Ralph Gakenheimer, Maarten Hajer, Mette Skamris Holm, Andy Jamison, Bill Keith, Finn Kjrsdam, Mary Rose Liverani, Kim Lynge Nielsen, Tim Richardson, Yvonne Rydin, Ed Soja, Michael Storper, Andy Thornley, Jim Throgmorton and Alan Wolfe. Two anonymous Cambridge University Press reviewers provided highly useful comments for preparing the final version of the typescript.

The transport sector and its institutions are hardly in the vanguard regarding freedom of information. In some cases we were unable, using the formal channels for information gathering, to get the data and in-depth information we needed to write the book the way we wanted to write it. We are grateful to those bold individuals who, when the formal channels dried up, found informal ways of furnishing us with the information we lacked. We mention no names for obvious reasons.

Lilli Glad expertly transformed our drafts into readable manuscripts. Anni Busk Nielsen provided precious help in acquiring the literature on which the study is based. The research and the book were made possible by generous grants from the Danish Transport Council and Aalborg University. Finally, we wish to thank our editor at Cambridge University Press, Sarah Caro, who provided valuable help in seeing the book through the printing process. Bent Flyvbjerg was teamleader for the research on which the book is based and is principal author of the book. We apologise to anyone we have forgotten to mention here. Responsibility for errors or omissions in this book remains ours alone.

The megaprojects paradox

A new animal

Wherever we go in the world, we are confronted with a new political and physical animal: the multibillion-dollar mega infrastructure project. In Europe we have the Channel tunnel, the resund bridge between Denmark and Sweden, the Vasco da Gama bridge in Portugal, the German MAGLEV train between Berlin and Hamburg, the creation of an interconnected high-speed rail network for all of Europe, cross-national motorway systems, the Alp tunnels, the fixed link across the Baltic Sea between Germany and Denmark, plans for airports to become gateways to Europe, enormous investments in new freight container harbours, DM 200 billion worth of transport infrastructure projects related to German unification alone, links across the straits of Gibraltar and Messina, the worlds longest road tunnel in Norway, not to speak of new and extended telecommunications networks, systems of cross-border pipelines for transport of oil and gas, and cross-national electrical power networks to meet the growing demand in an emerging European energy market. It seems as if every country, and pair of neighbouring countries, is in the business of promoting this new animal, the megaproject, on the European policy-making scene. And the European Union, with its grand scheme for creating so-called Trans-European Networks, is an ardent supporter and even initiator of such projects, just as it is the driving force in creating the regulatory, and de-regulatory, regimes that are meant to make the projects viable.