COMMENTARY

Comparing Apples To Apples

The construction industry today is increasingly global, with investments and international expertise crossing national boundaries. For example, a power plant project in the United Kingdom could be a huge collaborative effort involving a British owner, a French designer and a contractor from China.

As investors, consultants and contractors invest and operate in projects across the world, the differences in approaches and inconsistent methodologies in measuring and presenting construction costs give rise to cost overruns, increased risks and corresponding disputes.

Research shows that people are not capturing costs as it should be, with nine out of 10 mega projects experiencing cost overruns. For example, the Channel Tunnel was over budget by USD21.1 billion and the 3 Gorges Dam by USD16.1 billion. 

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