Megaprojects or Megaproblems?

COMMENTARY

By Prof Stewart Clegg and Prof Shankar Sankaran

University of Technology Sydney

Sydney, Australia

This article will bring to the attention of the public the different views on megaprojects that are currently being advanced in Australia. Major infrastructure projects, such as the Lane Cove Tunnel, Cross City Tunnel, M5, Sydney Light Rail, Sydney Metro, Westconnex, Second Sydney Harbour Tunnel and the Inland Rail, have all been criticized for excessive spending.

While the public can see many infrastructure projects being built and delivered and some that do provide benefits, regular news headlines about cost blowouts, delays and benefits’ shortfalls, all cloud the picture. Who is reaping the benefits? Businesses like Transurban, that receive an escalating toll revenue, or motorists like you, paying these tolls? When the benefits do not meet the expectations of the contractor, the contactor can declare the project bankrupt, with the state government ultimately bearing the losses. Each time a road is built a user pays a toll that adds to the cost of living. New roads are touted as a convenience by their promoters, which they certainly are for those that can afford them, at least in the short term. In the long term, new roads are well-known to concentrate and attract traffic that slows down the flow that they were built to improve. Increased traffic in the short-term also accrues to non-toll alternative routes. Those who pay, those that live furthest from central city areas, are a demographic not readily able to defray additional costs as they are mortgagees whose choice of residence is dictated by housing availability and affordability. Given these caveats, many people cannot understand how selling off state-owned assets to fund major projects has provided better value. Rather, they have resulted in additional costs that they have to bear.

It is not only state government megaprojects that are problematic. A recent national example presents itself, which is discussed in the independent report of Dr. Kerry Schott^[1] on the Inland Rail project. In just a two-year period the cost has doubled to 30 million dollars from initial estimates as well as the completion date being extended by four years. According to the report, the reasons for the cost increase are “mainly an increase in scope caused by immature preliminary designs and approval requirements, delays due to the prolonged approval processes, and recent escalations”. In addition, the project commenced without knowing where it will either start or finish. Schott’s report held the Australian Rail Track Corporation responsible as the project owner, in large part because it lacked the project management skills necessary for project delivery. There were governance issues as well.  The minister responsible for its establishment, as well as its chief promoter, Barnaby Joyce, did not appoint an appropriate CEO, according to Dr. Schott. The Inland Rail Board was composed of Coalition ministerial appointments in which skill and experience were not uppermost. The recommendation to the Federal government is that a subsidiary company be established for the sole task of delivering the project.

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How to cite this work: Clegg, S., Sankaran, S. (2024).  Megaprojects or Megaproblems? commentary, PM World Journal, Vol. XIII, Issue VI, June.  Available online at https://pmworldlibrary.net/wp-content/uploads/2024/06/pmwj142-Jun2024-Clegg-Sankaran-Megaprojects-or-Megaproblems-commentary.pdf

About the Authors

Prof Stewart Clegg

Sydney, NSW, Australia

Stewart Clegg is a prolific writer and contributor of over 300 articles to top-tier journals and is the author or editor of over 60 books and hundreds of prestigious academic papers, several of which have won prestigious awards. His core interests are in social theory, power relations, organisations, and projects. He works in the School of Project Management and the John Grill Institute for Project Leadership at the University of Sydney. In the past he has been a professor at several other universities, including the University of New England, The University of St. Andrews, The University of Western Sydney, and the University of Technology Sydney, where he is an Emeritus Professor. Among his most recent books is Frameworks of Power (2023, 2^nd edition). Prof Clegg can be contacted at stewart.clegg@sydney.edu.au.

Prof Shankar Sankaran

Sydney, NSW, Australia

Shankar Sankaran is a Professor of Organizational Project Management at the University of Technology Sydney (UTS), Australia. He teaches project management at UTS and conducts research on organizational project management. He has published journal articles on megaprojects and public-private partnerships and books on megaproject leadership and project governance. He is a recipient of a PMI research achievement award and the IPMA research award both with Nathalie Drouin and Ralf Müller. He is the author of two books on project management, and has written 25 book chapters related to project management, and published over 100 journal articles, out of which 30 are related to project management. He has edited five guest editorials related to project management. He has supervised or co-supervised close to 50 doctoral students. Prof Sankaran can be contacted at shankar.sankaran@uts.edu.au.

[1] https://www.inlandrail.gov.au/understanding-inland-rail/independent-review