FEATURED PAPER
By Pascal Bohulu Mabelo
Johannesburg, South Africa
Abstract
Engineering Contracts are crucial to delivering Large Infrastructure Projects (LIPs) successfully. These megaprojects significantly impact national economies and are characterised by complexity, scale, and long durations, often involving multiple stakeholders, vast resources, and fast-evolving requirements. Alas, traditional Contract Management approaches have struggled to cope with such complexity, leading to widespread issues such as cost overruns, delays, disputes, and even project failures—billions spent, but nothing to show. Examples abound of fiascos due to deficient contracts.
This article proposes a systems approach to Engineering Contracts, grounded in systems thinking and systems engineering. The systems approach views contracts not merely as legal documents but as dynamic instruments that govern interactions, responsibilities, and the expectations of all parties involved. This perspective is particularly relevant for LIPs, where complex stakeholder interactions, interconnectedness, risk-sharing, and adaptive management are essential for success.
Significance of Large Infrastructure Projects
The upsurge in project complexity severely challenges many organisations to achieve project success
—to deliver the quality and operability expected by the acquirer and stakeholders on time and within the established budget. In response to this challenge, governments and the infrastructure industry have fostered the application of the systems engineering (SE) discipline to enhance project delivery.
“Infrastructure represents the largest portion of capital investment in any country, and when one considers that on a typical infrastructure project, the construction costs represent about 85% of the total costs, it is reasonable to put some effort into extending the benefits that SE has brought in its traditional domain [of aerospace, defence industry, electronics, etc] to the construction industry and, in particular, to Large Infrastructure Projects.” (INCOSE, 2012)
In her seminal book titled “Economic Theory and Construction Industry,” Hillebrandt submits that construction makes up to 10% of GDP worldwide and, for example, is the largest industry in the United Kingdom (UK) and the second largest, after public health, in Sweden (Hillebrandt, 2000).
LIPs contribute to the national economy during construction and through their positive outcomes, viz., job creation, GDP growth, increased wealth, and enhanced standard of living (US DoS, 2012). Recent studies suggest that every dollar spent on infrastructure yields an estimated GDP increase of US$0.05 to US$0.25—generating a socio-economic return of between 5% and 25% (GI Hub, 2019). Thus, South Africa relies on infrastructure investments to realise its socio-economic development.
“Infrastructure investment is a key priority of both the National Development Plan and the New Growth Path. We are transforming the [SA] economy, directing national growth and driving job creation by implementing a long-term, government-led infrastructure investment programme […] builds social capital; and raises living standards as people have access to […]” (PICC, 2012)
“The National Infrastructure Plan is made up of eighteen Strategic Integrated Projects (SIPs), each of which consists of a large number of projects drawn from a wide range of economic sectors and stretching across all […] provinces of the country” (SIPs and Skills, 2014). Medupi is a key element of the National Infrastructure Plan; however, years of delay and ±150% cost overrun at this project could spell disaster for Eskom and South Africa (SA). Yet, this debacle is no isolated incident; indeed, infrastructure projects worldwide suffer similar predicaments that could be synopsized as follows:
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- Challenges facing project management—Despite its apparent maturity as a discipline with a host of registered professionals, traditional project management has proven inadequate in the face of increasing complexity in project scope and environment. Only ~26% of projects executed are generally deemed successful; therefore, a need to propose an alternative model.
- Implications of project failure—Large Infrastructure Projects (LIPs) are prone to failure and, therefore, have the potential to cause financial failure (to the company) and fiscal failure (to the country), reinforcing the need for an alternative approach, particularly for megaprojects.
- Inadequacies of traditional approaches—The inability of project management approaches (not necessarily tools or techniques) to cope with complexity often results in delays, massive cost overruns, and failure to meet the owner’s requirements. A systems approach is needed.
A need thus arises to consider why and how contractual risks make LIPs particularly vulnerable to cost and schedule overruns (or utter failure) and then propose a remedial or alternative approach to managing Large Infrastructure Projects, as J.B. Porter has noted in his foreword to (Merrow, 2011). Moreover, in discussing “Governance of Relationship Risks in Megaprojects,” Xie maintains that:
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How to cite this paper: Mabelo, P. B. (2025). Systems Approach to Engineering Contracts; featured paper, PM World Journal, Vol. XIV, Issue VIII, August. Available online at https://pmworldjournal.com/wp-content/uploads/2025/08/pmwj155-Aug2025-Mabelo-Systems-Approach-to-Engineering-Contracts.pdf
About the Author
Pascal Bohulu Mabelo
Johannesburg, South Africa
Pascal Bohulu Mabelo (MBA, MSc Industrial, BSc Civil, Pr. Eng, Pr. CPM, Pr. PMSA, PMP), has more than 25 years of professional experience and possesses a wide range of technical and managerial skills in large and complex infrastructure projects. He has worked on large infrastructure projects as a design engineer, project/programme manager, project consultant and project management executive. Pascal was honoured to serve as the national chairman of Project Management South Africa (PMSA), the leading Project Management professional association in Southern Africa.
Pascal has published the book: “Managing Engineering Processes in Large Infrastructure Projects” (Cambridge, 2021); he has also published, “How to Manage Project Stakeholders—Effective Strategies for Large Infrastructure Projects” (Routledge, 2020) and “Operational Readiness—How to Achieve Successful System Deployment” (Routledge, 2020). Through various publications, journal articles, and conference presentations, he assiduously promotes the application of Systems Thinking and/or Systems Engineering principles, concepts, and practices to unravel complexity in Large Infrastructure Projects (LIPs) to address their persistent risks of failure and their massive, even pernicious, cost and schedule overruns.
Pascal is currently a Director and Principal Consultant at E 6 Project Consulting or E6PC; for comments, further information, and clarifications he may be contacted at Consult@e6pc.com.
His previous papers can be viewed at https://pmworldlibrary.net/authors/pascal-bohulu-mabelo/
