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(EST-2901) How to Achieve Dramatic Reductions in Megaprojects Costs

Scope definition, estimation of project costs and excellence in project management are core ingredients for success of mega projects. Complex projects are common across various sectors including oil and gas, transportation, nuclear, construction and science and therefore, it is essential to implement project management strategies, scope identification and accurate cost estimation to improve their outcomes in parameters of time, quality and budget. Many of the current construction management practices created are for traditional projects. The analysis of literature and lessons learned suggests that there is need for innovative project management strategies to manage first of a kind complex projects more effectively.

Problems related to first of a kind megaprojects include their complex nature, the use of traditional technologies, inappropriate project management strategies and environmental conditions. Consequently, such factors are responsible for affecting the quality and cost of the projects. It is essential to identify the project’s scope during the initial stages of the project to ensure that it is aligned with project goals and does not affect the quality of the project; as well as supporting the preparation of cost estimates that are reliable and disciplined.

Cost estimate uncertainty is an integral part of the risk management strategy for a project, which is an influential factor in affecting the total cost of megaprojects. When risk is managed appropriately, it can help in reducing the cost of the project, ensuring that quality and time parameters are met. Additionally, project success is dependent on other factor such as accurate cost estimation, risk analysis, use of high quality engineering, strong and robust project management strategies and team coordination and communication.

Based on the authors’ experience on megaprojects in the field of large nuclear, scientific and infrastructure projects, the paper describes effective practices to achieve improved project outcomes by implementing high quality cost estimating processes, honest communications, proper organizational structures, risk analysis, progress and cost control for each project phase using best project management practices and standards.