Megaprojects and Risk: An Anatomy of Ambition

Bent Flyvbjerg, Nils Bruzelius, and Werner Rothengatter
Cambridge University Press, Cambridge, UK, 2003.
Reviewed in: Economic Development Quarterly (EDQ), 2005, 19(4)
 
Review Excerpt:

The main point of the book is that the conventional method of developing megaprojects does not take into account the unique challenges that attend their planning, design, construction, and operation. Enormous projects that rely on innovative technologies and that can take decades to complete pose great risks that can be very difficult to calculate. The ambiguous roles played by government, the private sector, and the public in megaproject development leave no one accountable for the long-term performance and success of such projects. Risk negligence and the lack of accountability together create an environment of “appraisal optimism” that leads to inaccurate construction cost and revenue estimates and the implementation of projects for which the real impacts are badly misunderstood. As a result, taxpayers and private investors worldwide continue to commit billions to projects that are neither financially viable nor in the public’s best interest.

This book strikes at the heart of what might be called a megaprojects dilemma. Promoters and supporters often represent short-run financial viability as being less important than long-term performance because megaprojects are expected to generate direct and indirect economic benefits throughout a region for many decades to come. The authors caution against such sanguine justifications, arguing that today’s big, costly, nonviable megaprojects have the power to damage the environment, destabilize governments, and bankrupt major business institutions in the short run and that these risks are too great to bear.
 
— Peter Hendee Brown