Were megaprojects just a fad? For a few years it seemed that big projects were the best solution to many of society’s big problems. That logic is being reconsidered.
The delays, cost-overruns and disruption associated with the massive size and scale of megaprojects is frustrating citizens and governments. Sure, the initial announcement of a megaproject was probably met with much fanfare and excitement. But now people are getting tired of waiting. Citizens want their problems solved faster and — more often than not — at a small-scale, local level.
Megaproject owners and developers are also losing their appetite for out-sized projects. The reality is that the risk/ reward ratios rarely line up. There are too few developers able to take on the risk of these types of projects. There are too few professionals with the experience needed to make them successful. There are too few construction companies with the balance sheets required to develop the new design and construction approaches required to deliver them.
In response, we have started to see megaproject plans get unpacked. Rather than going for ‘all-or-nothing’ on Day 1, infrastructure owners and planners are starting to think about how they might deliver a series of smaller, more flexible and future-enabled projects that add incremental value to citizens’ lives. Governments are also considering the merits of splitting their projects into smaller programs to allow for more nimble responses to changes in demand or technology, or simply to make them easier and more certain to deliver.
Look back: What did we predict?
In 2019, we predicted that “we may be rapidly approaching the effective limits of project size and complexity unless new approaches to project delivery are developed.”
To be clear, this is not just an evolution of the age-old practice of packaging up projects into more manageable tenders. This is about taking an entirely new philosophical approach to infrastructure delivery that more closely mirrors the mantra of tech firms; move fast, make customers happy, and continuously update the technology to deliver ongoing value. Positive incrementalism needs to be brought to the fore.
Over the coming year, we expect to see infrastructure planners, promoters and owners putting more focus into creating a roadmap of smaller projects that provide greater long-term flexibility while delivering quick wins for citizens and consumers.
The excerpt was taken from KPMG article, “Ten key regulatory challenges of 2020.”
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