Abstract
Megaprojects are large-scale, complex endeavours that typically exceed $1 billion and are essential to infrastructure development and economic growth. However, they are notoriously prone to cost overruns, with studies indicating that many megaprojects exceed their budgets by significant margins. Understanding the factors that contribute to these cost overruns is crucial for improving project management practices and ensuring a more effective allocation of resources. This research study aims to develop an in-depth description of the factors and intervention employed in the previous megaprojects to reduce the impact of cost overruns on the organisation.
Despite the critical role that megaprojects play in driving economic growth and infrastructure development, a significant proportion of these large-scale projects experience substantial cost overruns. The root causes of these overruns are multifaceted, involving inadequate planning, underestimation, scope changes, complex stakeholder dynamics, economic fluctuations, insufficient risk management practices and more. As a result, there is a pressing need to systematically identify and analyse the key factors contributing to large-scale projects' cost overruns.
The literature review utilised a conceptual framework for cost overruns and examined seven large-scale project studies to identify the factors contributing to these overruns. The seven large-scale studies reviewed the common causes of cost overruns from approximately two hundred and twenty-five megaprojects While it highlights the causes and impacts of cost overruns, it also identifies potential interventions and highlights the potential for improving management practices and theoretical frameworks to enhance project delivery and efficiency.
The research employed a qualitative methodology, utilising a case study approach to gain an in-depth understanding of the causes of cost overruns in large-scale projects. Data collection involved conducting interviews with semi-structured questions, using purposive sampling to select participants. For data analysis, ATLAS.ti was utilised, and coding was applied to organise and present the findings effectively. This approach facilitated a comprehensive exploration of the underlying factors contributing to cost overruns, offering valuable insights for improving project management practices.
The main findings reveal that cost overruns were primarily driven by external factors such as economic mismanagement, political pressures, and inadequate risk management. Internal challenges, such as leadership changes, poor stakeholder engagement, and incomplete engineering, played significant roles. Additionally, the study identified interventions such as strengthening internal systems, strategic decision-making, and improving oversight to manage cost overruns more effectively.
This study provides valuable insights into the underlying causes of cost overruns and offers strategies for enhancing project planning and execution. This will ultimately lead to more predictable outcomes, better resource management, and improved stakeholder satisfaction. By recognising and mitigating these challenges, stakeholders can enhance the likelihood of delivering projects on time and within budget, ultimately contributing to more sustainable infrastructure development.