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by Alec Hogg
We’re (hopefully) coming to the end of another home renovation project, our third in a decade. Once again, the cost went well over the original quote and we’re weeks past the initial deadline.
Sound familiar? It should. A little research revealed that cost overruns and deadline misses are the norm in construction. Bidders have to be over-optimistic to get the job. And actually make their profit with all the add-ons. So it’s critical to plan properly up-front.
The Sydney Opera House famously cost 1400% more than the original budget. The £40m approved in 1997 for the Scottish Parliament building in Edinburgh was dwarfed by the eventual cost of £431m. Then there’s the Mounties’ Canadian Firearms Registry whose $2m budget ended up at a final cost of $946m.
So perhaps we shouldn’t feel too bad about Medupi. But with nuclear power stations among the culprits, the lights should be flashing around SA’s proposed $100bn fleet. The only defence against cost overruns is not to sign the contract in the first place. But if you must, then insist on total transparency. It’s time everyone involved in the controversial proposal, especially the Energy Minster, appreciates this.
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