RESEARCH PROJECT

Research Project



Abstract

Recent studies show that despite their growing popularity, megaprojects - large-scale, complex projects delivered through various partnerships between public and private organisations - often fail to meet costs estimations, time schedules and project outcomes and are motivated by vested interests which operate against the public interest. This paper presents a more benign and theoretically-grounded view on what goes wrong by comparing the project designs, daily practices, project cultures and management approaches of two recent megaprojects in The Netherlands and Australia, showing how these projects made sense of uncertainty, ambiguity and risk. We conclude that project design and project cultures play a role in determining how managers and partners cooperate to achieve project objectives to a greater or lesser extent.

Table of contents

Abstract1

Table of contents2

Introduction3

Contracting in public private partnerships5

Project cultures and rationalities6

Project description: the Environ megaproject7

Basic project orientation7

Dominant paradoxes9

Power relations10

Social interaction11

Dominant paradoxes11

Power relations13

Knowledge distribution14

Discussion15

Recommendations16

Introduction

Megaprojects have been described as multibillion-dollar mega-infrastructure projects and usually commissioned by governments and delivered by private enterprise; and characterised as uncertain, complex, politically-sensitive and involving a large number of partners . Increasingly, complex and extensive civil engineering and construction projects resemble megaprojects, as they too set up an integrated project organisation combining different organisations' skills, designs and constructs; and in some instances, not only build, but also operate the facility.

Flyvbjerg et al. contend that the majority of megaprojects overrun on costs, fall behind schedule, and fail to deliver in the terms used to justify the need for the project. They suggest that a main cause of such overruns is a lack of realism in initial cost estimates, motivated by vested interests. The length and cost of delays are underestimated, contingencies are set too low, changes in project specifications and designs are not sufficiently taken into account, changes in exchange rates between currencies and price changes are undervalued, as are expropriation costs and safety and environmental demands. Many major projects also contain a large element of technological innovation with associated high risk. Such risk tends to translate into cost increases, which are often not adequately accounted for initial cost estimates and . As a consequence of these features, megaprojects are characterised by conflict and uncertainty and poor cooperation between partners .

In this paper we will explore the question of how project culture and project design support successful cooperation between partners in megaprojects? We argue it is necessary to take an emic or internally-focused, contextually-grounded view of actual practice rather than an etic or outsider's, preordained view of megaprojects. To answer the research question we examined two international megaprojects, using an ethnographic research approach. This approach recognises that project environments are subject to processes of social construction, in which participants construct a more or less stable working environment for themselves, with consequently, we conjecture, greater or lesser cooperation between project partners.

Contracting in public private partnerships

Contractually, megaprojects are often defined in terms of Public Private Partnerships (PPP), in which there is a structural cooperation between public and private parties to deliver some agreed outcome , and ...