The globe’s biggest multi-billion dollar mega project disasters

Just before Christmas the New South Wales Government signed off on the new Parramatta light rail, the third new tram system in the state, at a cost of $2.4 billion.

Everyone will be hoping construction goes smoother than the new CBD light rail line which is at least a year overdue and $500 million over budget. But at least it will open — which is better than some infrastructure disasters.

There’s scores of other examples of infrastructure errors and cost overruns in Australia. But they pale into insignificance compared to the dubious list of worldwide new build balls ups and vanity project disasters that have cost billions and either never opened, closed down, stood idle or have seen their budgets increase by eye watering amounts.

According to a 2014 analysis by Oxford University economic geographer Bent Flyvbjerg nine out of ten so-called “mega projects” have suffered from cost overruns, many of around 50 per cent or more.

Australia is the proud owner of the world’s costliest ever “mega project” budget blowout. Picture: Jonathan Ng

Australia is the proud owner of the world’s costliest ever “mega project” budget blowout. Picture: Jonathan NgSource:News Corp Australia

He cited cost overruns for Denver’s new airport of 200 per cent and an IT system for the UK’s National Health Service of between 400-700 per cent.

“Success in megaproject management is typically defined as projects being delivered on budget, time, and benefits. If, as the evidence indicates, approximately one out of ten megaprojects is on budget, one out of ten is on schedule, and one out of ten is on benefits, then approximately one in a thousand projects is a success,” he said.

But there is one Australian project that is in the premier league of infrastructure excess, the budget of which went pear shaped by some 1400 per cent.

Mr Flyvbjerg said politicians often see mega projects as lasting monuments to themselves while others are seduced by the sheer grandiosity of large infrastructure.

Ironically, he said, often it’s the case of “survival of the unfittest” infrastructure. That is, the projects that succeed are those whose costs have been wildly underestimated. By the time this is realised, it’s too late to call the construction off.

So what global projects have proved to have the most questionable bang for buck?

The terminal building of Cuidad Real International Airport stands dormant after closing in April 2012, when all scheduled flights ceased to operate. Picture: Oli Scarff/Getty Images.

The terminal building of Cuidad Real International Airport stands dormant after closing in April 2012, when all scheduled flights ceased to operate. Picture: Oli Scarff/Getty Images.Source:Getty Images

Ciudad Real Central Airport, Spain

Cost: $1.5bn, abandoned

Opened in 2009, this $1.5 billion Spanish airport was built as an alternative to Madrid’s busy Barajas hub. Built for 10 million passengers, only a smattering of passengers ever used the state of the art facility.

In 2011, the last airline flew its final service.

Built in the midst of a construction boom, no one seemed to care that it was too far from Madrid for residents to be bothered to trek to it.

In 2012, it was agreed to sell the airport to a Chinese company for just $15,000. The deal fell through and the terminal and runway remain intact and empty.

Ironically, however, Spain has also has some infrastructure successes with Bilbao’s Guggenheim Museum and extension to the Madrid Metro all on budget.

The 105-storey never opened Ryugyong Hoteltowers over Pyongyang, North Korea. Picture: AP Photo/Greg Baker.

The 105-storey never opened Ryugyong Hoteltowers over Pyongyang, North Korea. Picture: AP Photo/Greg Baker.Source:AP

Ryugyong Hotel, North Korea

Cost so far: $1 billion

Soaring high above the Pyongyang skyline, this imposing concrete hotel was designed to wow international guests with 7500 rooms and five revolving restaurants.

It hasn’t turned out that way. Begun in 1987, it has yet to open.

An economic crisis halted work on the hubris hotel. In 2011, an Egyptian telecoms firm paid for the exterior of the building to be glazed so at least it looks complete. But inside it’s still empty and remains the world’s largest unfinished building.

The Russky Island bridge was built to link delegates to a conference that lasted two days. Picture: Alamy

The Russky Island bridge was built to link delegates to a conference that lasted two days. Picture: AlamySource:Alamy

Russky Island Bridge, Russia

Cost: $1.5bn

Dubbed the “billion dollar vanity project” at 1104 metres long the Russky Island Bridge, in Vladivostok in Russia’s Far East, is the longest cable stayed bridge in the world. Problem is it doesn’t really have a reason for existing.

That’s apart from two days in 2012 when the island hosted world leaders for the APEC summit. The bridge was given over to the various motorcades whose passengers could marvel at this symbol of Russia’s modernity.

But with all the leaders gone, the bridge is now far less busy. Built for a capacity of 50,000 daily car journeys, the island it connects to has a population of just 5000 people.

The one part of the VC Summer nuclear plant that was built. Two other reactors were semi constructed costing billions and then abandoned. Picture: Wikipedia

The one part of the VC Summer nuclear plant that was built. Two other reactors were semi constructed costing billions and then abandoned. Picture: WikipediaSource:Supplied

VC Summer nuclear power station, USA

Cost: $2.5 billion, abandoned

An advanced energy plant in South Carolina, construction at the VC nuclear power station was halted in 2017 with only one-third complete.

Originally costed at $16 billion, the plant was to be partially funded by a hike to customers’ power bills totalling $1.6 billion.

Construction began in 2013 but costs ballooned to $35 billion and the opening date retreated from 2018 to the mid-2020s.

In 2017, the reactor maker Westinghouse went bust and four months later the plug was pulled on the entire project.

 

Sydney’s very expensive desalination plant in Kurnell.

Sydney’s very expensive desalination plant in Kurnell.Source:News Corp Australia

Australia’s desalination plants

Cost: $10 billion for many to sit idle

At the height of the early 2000s drought, various state governments went on a spending splurge building hugely expensive desalination plants that could filter salt from seawater and pump it to homes should the dams run dry. Problem is, the dams then went and filled up again.

Melbourne’s $4 billion plant was announced in 2007 when dam levels were below 30 per cent. When it opened in 2012, the city’s dams were 81 per cent full.

Similar plants built in Adelaide and Perth have been used. It took years before Melbourne’s was turned on and even then some have questioned if it’s really needed, while desal plants on the Gold Coast and Sydney have never been used and remain in so-called “hot standby” mode ready and waiting but chewing up more cash in the process.

In 2017, Professor Stuart Khan of the University of NSW told the ABC they might never come online.

“We actually jumped the gun, it’s been a financial disaster really. It’s an insurance policy, but whether it’s a good value insurance policy is a very different question.”

The completed main terminal of the Berlin Brandenburg International Airport. Weeks from opening, it failed critical safety tests. Picture: Sean Gallup/Getty Images.

The completed main terminal of the Berlin Brandenburg International Airport. Weeks from opening, it failed critical safety tests. Picture: Sean Gallup/Getty Images.Source:Supplied

Six years after it should have opened, this sticker is the only plane Berlin’s new airport has veer seen. Picture: Krisztian Bocsi/Bloomberg

Six years after it should have opened, this sticker is the only plane Berlin’s new airport has veer seen. Picture: Krisztian Bocsi/BloombergSource:Bloomberg

Berlin Brandenburg Airport, Germany

Cost so far: $10 billion, may never open

The lights are on at Berlin’s new airport but no one is home. The first flights were supposed to land in 2012 but, just weeks out from opening, final safety checks revealed the fire safety system was kaput.

It was one of a string of errors including electric doors that had no electricity, sagging car parks, escalators that were too short and lights that wouldn’t turn off.

The various issues have proved so difficult to rectify, the building remains shuttered. Every day a single train passes through the airport’s never opened station to keep the air flowing and stop the mould from growing.

Information screens never seen by passengers have now had to be replaced as they had reached the end of their life.

Earlier this year, Thorsten Dirks, a board member of German airline Lufthansa gave his assessment: “The thing will be torn down and built anew.”

An artist’s impression of the East West Link portal from Hoddle St.

An artist’s impression of the East West Link portal from Hoddle St.Source:Supplied

True. Labor ditched the East West Link for over a billion dollars when they took power from Napthine.

True. Labor ditched the East West Link for over a billion dollars when they took power from Napthine.Source:News Corp Australia

East West Link, Melbourne

Cost: $1.1bn not to build

On face value, $1bn for an 18km long motorway is reasonable. But in the case of the infamous East West Link, which would have gone through Melbourne’s inner northern suburbs, that’s a billion dollars for a road not to be built.

The Napthine Coalition Government signed a deal to build the road just two months out from the 2014 state election despite Labor saying it would cancel the project if it came to power.

Labor did win and, true to their word, cancelled it. But it came at a cost now estimated to be at least $1bn to taxpayers.

Now it’s a global icon. But that fame has come at a huge cost.

Now it’s a global icon. But that fame has come at a huge cost.Source:AAP

Parts of the building had to be rebuilt because the government signed off too quickly on the project before the designs were finished.

Parts of the building had to be rebuilt because the government signed off too quickly on the project before the designs were finished.Source:Supplied

Sydney Opera House

Cost: $1 billion, massive overspend

If you want to see an example of a monumental infrastructure overspend look no further than our own Sydney Opera House.

Mr Flyvbjerg said that massive increase in costs made the Sydney Opera House, designed by Jorn Utzon, the world’s biggest ever mega project budget blowout.

It was signed off by the government in a rush, before the design had been completed and without anyone knowing how to actually build the famous sails. Subsequently, much of the initial construction had to be rebuilt and, in the desperation to get it completed, the interiors weren’t even made suitable for some operas.

“Of course, Australians do not regret the Opera House, given what it has done for Australia,” said Mr Flyvbjerg. But there was a catch.

“The real regret — and real cost — of the Opera House (was) the overrun and the following controversy destroyed Utzon’s career and kept him from building more masterpieces.”

And if you think Australia doesn’t sign off on projects on a whim anymore guess again. Many of our biggest recent infrastructure builds, including the new $10 billion Melbourne Airport rail link, haven’t even been worthy of a mention in the priority list of the nation’s independent infrastructure adviser Infrastructure Australia.

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