PERFORMANCE CHALLENGES OF MEGA PROJECTS

Abstract

Large (mega) capital projects are experiencing cost overruns and schedule delays that are negatively affecting return on investment. Energy and industrial construction projects face unique challenges in project execution due to geography, climate, labour market characteristics, investment and other factors, both internal and external to the industry. Nonetheless, there is an urgent need for industry to address these challenges in order to improve the long-term success and sustainability of industry. A survey of industry leaders regarding their perception of where industry is at, areas for improvement and challenges they are facing. We asked them their opinion on what practices are good or bad, what needs to be improved and what lessons they may have learned regarding industry planning and execution processes, practices and procedures for large capital projects. The paper will present the findings from this industry survey. We also conducted a literature search of published material of industry practices on large capital projects. We analyzed the published material and survey responses to determine the current industry project performance (where are we at today?), factors that affect performance (what are we doing today?) and how can we improve performance (what can we do tomorrow?). We then present our recommendations. We encourage executives to expand their oversight of projects.