How Companies Can Increase Megaproject Success
The Interstate Highway System is considered the most expensive construction project of all humankind. Commenced in 1956, the project was originally estimated at $25 billion over 12 years, but it ended up costing $114 billion over 35 years (adjusted for inflation at $425 billion). Talk about a cost overrun. These days, projects in the billions, also known as megaprojects, seem to be a dime a dozen and experiencing explosive growth around the world. As new technology and innovations enter the marketplace and as the world’s population continues to grow, buildings are getting bigger and more expensive in the process. As a result, large and ambitious megaprojects have become commonplace gracing our world’s cities and rural development areas.
Curious to know more about the future biggest projects in the world? Take a look at our latest SlideShare showcasing some of the largest and most expensive projects around the world. From bridges, airports, research centers, trains, industrial cities and more, our list includes some of the most massive megaprojects that are still under construction spanning regions and industries. Anticipated completion dates range from next few months to 2050 and budgets vary from the tens to hundreds of billions.
Global Impact of Megaprojects
How important are megaprojects in our current global market? While we don’t want to be dramatic, the answer is critical. Currently, megaprojects constitute approximately 8% of our global GDP, and this is expected to grow to around 24% within a short decade’s time.
Among megaprojects, infrastructure projects are some of the largest but most needed on our planet. McKinsey even estimates that the world needs to spend about $57 trillion on infrastructure by 2030 to maintain the anticipated GDP growth. For civil construction companies, this means there’s a lot of work to do in our future.
Why the World’s Biggest Projects Go Wrong
With big needs, comes even bigger risk. It’s estimated that 65% of megaprojects fail when it comes to budget, schedule and/or business objectives. For infrastructure projects facing even more complexities, this number is higher. In fact, bridges and tunnels incur an average 35% cost overrun, and an average rail project goes over budget by 44.7%.
In general, McKinsey has identified the three top reasons why projects go wrong:
- Overoptimism and overcomplexity
- Poor execution
- Weakness in organizational design and capabilities
How to Increase Megaproject Success
To keep up with the world’s construction demands, builders need to adopt practices that will allow them to thoroughly evaluate, standardize and scale their efforts. Of course, comprehensive risk analysis and market studies are fundamental to any large-scale projects. Furthermore, to address issues like the labor shortage, construction teams need to start getting more efficient at doing more with less. Choosing the right construction productivity software is critical to addressing communication problems and standardizing workflows and improving workforce and project efficiency.
The world needs megaprojects and companies need to be able to deliver them on time and budget. Adopt and embrace innovations on the market for your projects, and your company is more likely to get a share of the global GDP growth.
Do you feel like there’s a megaproject that didn’t make our list? Share with us in the comments below.