Cost overruns in large-scale public programmes

Nature

The estimated cost of large-scale projects when submitted to and approved by decision-making bodies tends to be lower than the final cost. This may be due to deliberate underestimating by sub-contractors, increases in the cost of wages and materials during the life of the programme, or to unforeseen research and development difficulties.

The biggest contributor to cost overruns is delays in equipment or materials delivery. Very large and complex construction projects are usually unique. Since bringing all parts and equipment the site is not feasible, each phase of the building requires on time delivery of every necessary part and piece of construction equipment. If one item is delayed, the whole project may be delayed until it arrives.

Background

Cost overruns in large-scale public programmes gained global attention in the mid-20th century, as postwar infrastructure and defense projects repeatedly exceeded budgets. Landmark cases, such as the Sydney Opera House and Boston’s “Big Dig,” highlighted the prevalence and scale of the issue. Over time, international studies and audits revealed that cost overruns were not isolated incidents but a persistent challenge across sectors and continents, prompting widespread scrutiny and calls for improved project governance.

Incidence

By October 1993, the construction of the tunnel (the "Chunnel") between Folkestone and Calais had already overrun its original projected cost by 65% and projected completion by 5 months.

Claim

Cost overruns in large-scale public programmes are a critical and unacceptable problem. They waste taxpayer money, erode public trust, and divert resources from essential services. Such financial mismanagement signals deep flaws in planning and accountability, often benefiting contractors at the public’s expense. Ignoring this issue perpetuates inefficiency and undermines the very purpose of public investment. Immediate, decisive action is essential to restore integrity and ensure responsible stewardship of public funds.

Counter-claim

The obsession with cost overruns in large-scale public programmes is vastly overblown. Minor budget excesses are inevitable in ambitious projects and often reflect necessary adaptations, not incompetence or waste. Focusing on overruns distracts from the real value these programmes deliver—jobs, infrastructure, and progress. Instead of fixating on every extra dollar spent, we should celebrate the long-term benefits and transformative impact these investments bring to society. Cost overruns are simply not a significant problem.