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    Hundreds of Years of Pain, with Minimal Gain: Capital Project Cost Overruns, the Past, Present and Optimistic Future

    90148.pdf (464.9Kb)
    Access Status
    Open access
    Authors
    Love, Peter
    Pinto, J.K.
    Ika, L.A.
    Date
    2022
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Love, P.E.D. and Pinto, J.K. and Ika, L.A. 2022. Hundreds of Years of Pain, with Minimal Gain: Capital Project Cost Overruns, the Past, Present and Optimistic Future. IEEE Engineering Management Review. 50 (4): pp. 56-70.
    Source Title
    IEEE Engineering Management Review
    DOI
    10.1109/EMR.2022.3219362
    ISSN
    0360-8581
    Faculty
    Faculty of Science and Engineering
    School
    School of Civil and Mechanical Engineering
    Remarks

    © 2022 IEEE. Personal use of this material is permitted. Permission from IEEE must be obtained for all other uses, in any current or future media, including reprinting/republishing this material for advertising or promotional purposes, creating new collective works, for resale or redistribution to servers or lists, or reuse of any copyrighted component of this work in other works.

    URI
    http://hdl.handle.net/20.500.11937/90324
    Collection
    • Curtin Research Publications
    Abstract

    The cost overrun phenomenon plagues capital projects worldwide. While policymakers and practitioners are aware of the potential for cost overruns to occur while procuring their projects, they have struggled to mitigate them. This article takes stock of cost overrun research and suggests two major periods stand out. First, it focuses on the period from 1960 to 2002 and briefly reviews studies examining issues influencing cost estimation accuracy. Then, we look at the present period (2002 to 2022), where the Planning Fallacy theory has been championed and identified as the best way to explain why cost overruns occur. While the Planning Fallacy has filled the theoretical void in the literature, we question its legitimacy as it has been unable to effectively address the cost overrun phenomenon. Moving forward, we suggest a line of inquiry based on the theoretical polyphony of the ‘Fifth Hand’ principle, which offers a new framing to remedy cost overruns in capital projects.

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