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Big decisions, big risks. Improving accountability in mega projects

Nils Bruzelius, Bent Flyvbjerg and Werner Rothengatter

Transport Policy, 2002, vol. 9, issue 2, 143-154

Abstract: In terms of risk, many appraisals of very large infrastructure investments assume, or pretend to assume, that infrastructure policies and projects exist in a predictable Newtonian world of cause and effect where things go according to plan. In reality, the world of policy and project preparation and implementation is a highly stochastic one where things happen only with a certain probability and rarely turn out as originally intended. The failure to reflect the probabilistic reality of investment preparation and implementation is a central reason for the poor track record that can be documented for many major projects. The article describes lessons and recommendations on how to improve accountability in decision making on very large infrastructure investments in Denmark and Germany. The conventional approach to infrastructure investments is replaced by an alternative focusing on accountability. Redrawing the borderlines of private and public involvement, four specific measures to increase accountability are suggested and detailed: (1) Transparency, (2) Performance specifications, (3) Explication of regulatory regimes, and (4) Involvement of risk capital. The decision on whether or not to build a multi-billion dollar fixed link across the Baltic Sea connecting Scandinavia and Germany is used as an illustrative case. The cyclical process about the promotion of the German MAGLEV technology gives another good example for identifying basic failures in the political process. Beyond these examples from two countries, the approach developed is likely to be relevant for other major projects in other countries as well.

Date: 2002
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