MEGAPROJECTS OFTEN BECOME A MEGA-MESS

S. Scot Litke, Honorary D.GE

In keeping with the theme of this November/December 2016 issue of Deep Foundations Magazine, Megaprojects, I offer my take on the subject. This may not be as positive as one would hope. While we are all familiar with some of the most famous, or “infamous” that have, and/or are still in progress in the U.S., we may not have a full grasp of how these potential marvels may not be all they were cracked up to be. Readers of my columns are well aware of my sometimes jaundiced view of the underlying aspect of topics such as this. This iteration will no doubt follow in that vein.

What is a Mega Project?

Let us begin with a traditional definition of what constitutes a “Megaproject”. Wikepedia defines a “Megaproject as one with a price tag of at least $1 billion”. I think that $1billion doesn’t even begin to touch it when it comes to many of the most visible and notorious projects with which we are familiar. Other characteristics of mega projects are that they attract lots of public attention due in large part to the substantial impacts on communities, the environment, and budgets. Projects can also be “initiatives” that are physical, very expensive, and public. These kinds of projects include tunnels, bridges, dams, highways, airports, hospitals, skyscrapers, cruise ships, wind farms, offshore oil and gas rigs, aluminum smelters, nuclear power plants, the Olympic Games, aerospace missions, particle accelerators, canals, professional and big time college level sports stadia, and even the U.S.’s Affordable Care Act. Yes, mega projects are not restricted to those that directly resonate with those in the civil engineering and civil construction universe. However for purposes of this diatribe I will stick to those related to construction. In this regard I think that in order to fully qualify as a megaproject these days the undertaking must involve the participation of a number of public and private entities, be characterized by the need to coordinate a large number of contractor-providers, and have a fairly long lead time for completion.

To put this into international perspective I turn to an article by management guru Bent Flyvberg a professor at Oxford University’s Said Business School. In the article that appeared in the April 11, 2015 issue of the New Yorker Magazine, Flyvberg noted that megaprojects have come to constitute 8% of global domestic product. That’s a pretty stout number. Not surprisingly this rush to Megaville has been led by China. An earlier article by Flyvberg published in 2014 in the Project Management Journal, he offered (perhaps whimsically), that megaprojects are always “over budget, over time, and over-and-over”. He called this phenomenon the “survival of the unfitest”. He also noted that the least deserving projects often get built precisely because their cost-benefit estimates are so misleadingly optimistic. I don’t mean to be overly cynical here but there are multiple instances in which those planning, and/or attempting to fund these massive projects knowingly and publically understate their true anticipated costs. This has been known to be the case in a number of high-visibility state and/or local projects. One of the most widely criticized is a massive transit project that was proposed in San Francisco, CA a few years ago. In this case it has been alleged that the civil planners knew all along that the estimate that they were presenting for public funding was well below what they knew the project would ultimately cost. Experience shows us that there doesn’t even have to be any collusive element in these kinds of occurrences. They are, as Flyvberg suggests, a fact of life. Perhaps this often becomes a question of being too big to succeed without a significant amount of trouble. I suggest that when proposing this kind of project those involved should not be overly optimistic. Perhaps a modicum of pessimism is called for as one develops a realistic assessment of how these kinds of projects will unfold.

Well Documented Examples

We are all familiar with the Boston Artery, or “Big Dig” project. Most likely many of the readers of this magazine had direct “experience” with this one. I recall that initial cost estimates were in the $8 billion range. I also remember how $8 became $10, became $13 and so on. I doubt that anyone can put an exact figure on how this all shook out. The end-game ultimately included, but was not limited to claims, counter-claims, repairs, re-dos, and a panoply of aggravated (aggravating….) factors. Unfortunately this is the standard fare of how these kinds of undertakings often evolve. I vividly recall conversations that based on the Boston experience, some doubted that there would ever be another megaproject of this type. Well, that didn’t turn out to be the case. One need only look to what is going on in Seattle with the now infamous, Alaska Viaduct Replacement project, an aging elevated roadway that skirts downtown Seattle. Much has been written about this up-and-down tunneling project and the problems associated with the tunnel boring machine, “Big Bertha, so I won’t belabor the point. What this project will ultimately cost, who will wind up paying for it, and when it will be completed is anybody’s guess.

The Current State of Megaprojects in the U.S.

Here is a list of the leading U.S. megaprojects that are planned, in progress, or close to completion. The first five were reported in an article by Ryan Holywell and Daniel Lippman that appeared in the April 12, 2014 issue of the “Governing, the States and Localities” newsletter. Since that writing other major projects have come on line. All costs associated with the projects are estimates that were based on data available when the report was published. We can only guess as to how those numbers have changed. For reasons related to space available in this article I have listed the projects without detail. Interested readers can pursue additional information via the internet.

  • The Dulles Transit Extension linking downtown Washington, D.C. with Dulles International Airport 20 miles away in Virginia. Cost: $6.2 billion
  • OTAY Mesa East, third port of entry to the U.S. from Mexico, located near San Diego calling for a highway, bridges, and rail links. Cost: $1 billion, and growing
  • O’Hare Airport Modernization, to upgrade and expand one of the world’s busiest airports. Cost: $8.8 billion
  • Crescent Corridor Expansion, a freight railway project going through 13 eastern states linking New Orleans to New Jersey. Cost: $2.5 billion
  • Alaska Way Viaduct Replacement, tunnel project discussed above. Cost- $3.1 billion with huge cost overruns not unlike the mass of Mt. Rainer that can sometimes be seen from the grade level of the construction site…

Others worth noting are:

    • The Columbia River Crossing, a bridge and highway project between Vancouver, WA and Portland, OR. Cost: $1.25 billion in Federal Funds, plus major additional funds to be provided by the states of Washington and Oregon. This project is currently on indefinite hold while a good bit of political and funding “stick-handling” is going on.
    • Denver FasTracks, commuter light rail, as well as an elaborate bus-based rapid transit system in Denver, CO. Cost: originally estimated at $4.7 billion, already up to $7.8 billion.
    • NexGen, an upgrade of the U.S. air transit tracking and routing system going from land-based to a satellite supported air traffic control system intended to allow for more planes in the air at a given time, a reduction in delays, and reduction in wasted fuel. Cost: $160 billion
    • California High Speed Rail, a highly publicized and politically contentious statewide program. Cost: $98 billion
    • New York City’s Second Avenue Subway, an update, and upgrade of the original subway system built in 1927 being constructed through the heart of N. Y. City. Cost: $410 billion.

There are no doubt more of these kinds of projects but this gives you an idea of what is happening at this time, and only in the U.S. Other highly visible, recent, and relatively successful international projects include Switzerland’s Gotthard Base Tunnel through the Swiss Alps, the Panama Canal Widening and Lengthening, and the Toronto Subway Expansion. While the doubts about the viability of megaprojects continue to loom large, the appetite for these kinds of undertakings, particular those that are infrastructure-related, goes on unabated. While no major construction project has ever wound up costing even close to its original estimates, and while those providing funding may be wringing their hands and cringing in the budget office, they are a fact of mega-life.


ABOUT THE AUTHOR:
S. Scot Litke, Honorary, Board Certified, Diplomate of Geotechnical Engineering

S. Scot LitkeScot is often referred to as the “Dean of Association Executives” in the geo-industry. He served as the Executive Director of the ADSC: The International Association of Foundation Drilling from 1982-2010. He is a member of that organization’s Hall of Fame. During his tenure with the ADSC he was the Editor-in-Chief of Foundation Drilling Magazine, the association’s flagship publication. A noted public speaker, lecturer, and author Scot has received numerous awards from a variety of geo-industry-related organizations including the ASCE’s Geo-Institute, the American Subcontractors Association, the U.S. Army Corps of Engineers, the Canadian Geotechnical Society, and the United States Universities Council for Geotechincal Engineering Research. He was the recipient of the Deep Foundations Institute’s 2014 “Distinguished Service Award”. Scot is a Founding Trustee of the Geo-Institutes, “Academy of Geo-Professionals”. He is a member of the Board of Trustees of the “ASCE’s Council on the Certification of Engineering Professionals”. His column, “Beneath the Surface” appears regularly in Deep Foundations Magazine, the official publication of the Deep Foundations Institute. His writings appear in other geo-industry publications. Scot offers management consulting services in Strategic Planning and Communications to companies and organizations in the geo-industry. Scot can be reached at: scotlitke@att.net


This article originally appeared in “Deep Foundations Magazine”, the flagship publication of the Deep Foundations Institute. It is herein reprinted with permission of the DFI and the author. To learn more about the DFI and their programs visit: www.dfi.org.

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