Sydney Opera went massively over budget
Megaprojects often make headlines for being extremely
Over budget and having long construction delays.
9 out of 10 megaprojects have cost
Overruns ranging from just a few millions, to billions and billions of dollars, which begs the question: which projects wasted the most? and why did they cost so much more money than originally planned? stay tuned as we take a closer look at four megaprojects that went massively over their original budget.
If you enjoy our content, make sure to subscribe to Top Luxury. We'll start with one of the world's most famous buildings, which actually went 14 times over its planned budget. Number 4: The Sydney Opera House in Australia Located at the banks of the Sydney Harbor, it has come to define the city with its soaring sail-like roofs and its unique design inspired by various things in nature such as palm trees and seashells. First conceived in 1956, the building's design was selected from an international design competition
The competition brief did not set a cost limit or design parameters. It only asked for an Opera House with two performance halls that should become one of most recognizable and greatest buildings in the world. The Danish Architect Jørn Utzon won the competition.
He presented his design and planned to build the structure in three phases starting from the concrete base, to a curved 'shell' roof, and finally to the interior design. Even though Utzon hadn’t finished the structural design yet, the government wanted work to begin before the upcoming elections. So with incomplete preparations, the construction got underway in 1959 with a four-year construction timetable and a 7 million dollar budget. Since construction was running ahead of the design, a chain reaction of problems plagued the project and costs began escalating right from the start. A design change meant that the Opera House was going to have four theaters instead of two and soon it was found that the report about the stability of the site was flawed. The foundations that were nearing completion were found to be inadequate and had to be rebuilt to properly support the roofs. As a consequence, 4 years later, by the time the entire project was due to be completed, only the concrete base was constructed. For Phase 2 of the project, Utzon wanted the roof to feature shells covered with ceramic tiles.
However, he had not yet worked out the precise shape of the shells, and casting them was proving to be expensive and problematic. 7 years after they started, the costs had already reached 22 million dollars - 3 times the initial budget. Utzon had finally managed to work out the design solution for the shells and the special ceramic tiles. However, concern grew over the cost overruns, and a change in government led to increased scrutiny of the project. Utzon believed that design changes and cost overruns for buildings of this scale were common but the new government was no longer on board. Davis Hughes, the new minister of public works withheld funding and asked for proof of work before releasing payments. Utzon could not even pay his staff and threatened resignation if they didn’t release fundings. In the end Utzon stated to Davis Hughes: "If you don't do it, I resign”, to which Hughes replied: "I accept your resignation.
Thank you very much. Goodbye.". After his resignation from the project, Utzon left Australia and never came back. In the following months, Minister Hughes appointed a panel of Australian architects to complete the Opera House. The roof was finished three years later based on Utzon's design. At this point the unique shell structure and the use of more than a million specially designed ceramic tiles pushed the budget to 85 million dollars. The interior design of the project required a new set of plans and an additional 17 million dollars taking the total costs to 102 million dollars — which is over 14 times higher than originally planned. Once it was finished, the Sydney Opera House was an instant success and the government made back what they had spent on construction in just 2 years.
Even though Utzon wasn't recognized at the time, he was awarded the prestigious Pritzker. Prize in 2003 and what he created was already being compared to some of the most impressive landmarks in the world. The Opera House meanwhile has gone on to become one of the most important buildings in the country.
In addition to being an architectural landmark,
The opera house also boosts the economy, especially through tourism with annual revenues reaching the billion-dollar mark.
After 5 decades of its opening, the budget overruns of this magnificent structure are rarely mentioned. Utzon is celebrated not just in Australia but around the world. While the Opera House is now massively profitable, the same can not be said about the next project on our list. Number 3: The Montreal Olympic Stadium in Canada.
The 1976 Summer Olympics brought Montreal global recognition, a few memorable moments, and massive debts that had to be paid back for more than three decades. Montreal won the bid to hold the Olympic games in 1970. At the time the city was thriving economically and hosting the Olympics was seen as another big milestone. The mayor, Jean Drapeau, proudly announced that this was going to be the first Olympics ever to pay for itself. He famously said: “The Olympics can no more run a deficit than a man can have a baby.”. To say that his statement aged badly would be a colossal understatement. At first Drapeau floated a highly ambitious estimate of just 120 million dollars to hold the Games. 60% of this budget was set aside for a grand Olympic Stadium called "The Big.
O" which would be center stage at the games. The stadium was to be designed by French architect Roger Taillibert who had also rebuilt the famous Parc des Princes in Paris. He wanted the stadium to be gigantic with a dome and a retractable roof suspended from a 175-meter tall tower. The plans were grand, however not doable with the budget stated by the Mayor. Moreover, the prices of raw materials tripled after the first Oil Shock of 1971 but no compromises on the design were made. It was criticized heavily and the lack of flexibility led to massive hikes in costs even before the construction started. By 1972, Mayor Drapeau had announced a revised $310 million budget for the Games with the new stadium now set to cost 130 million dollars. Problems increased further as they failed to deal with Montreal's strong Labor Unions.
Work was scheduled to begin in 1972 and it was delayed by more than a year due to strikes by construction workers. That’s why construction only began just 3 years before the opening of the Olympics. Time constraints meant that Drapeau had to employ double construction crews and pay over-the-top wages to 3000 laborers who were working overtime. By the time the 1976 games came around, the much-promoted interactable roof and one of the stands in the stadium of the Olympic park remained unfinished. Despite the construction mess, the Olympic games themselves were a success, however, Canada became the first host nation in history to not win a single Gold Medal. As the games came to an end, Montreal was faced with a much bigger headache. In the final analysis, the Montreal Olympics had cost the city in excess of 1.6 billion dollars, more than 13 times the original estimates. The Big O meanwhile, had already burdened the city with a billion-dollar bill without the completion of the retractable roof.
The Big O had become the Big Owe, a nickname that the stadium carried for years to come. An inquiry into what went wrong found Mayor Drapeau had made some serious and costly mistakes. Also, several top officials were convicted of fraud and corruption. This was of little consolation to Montreal residents who had to pay the stadium's debt for 30 years until 2006. While the Montreal Olympics went over budget by more than a billion dollars, we'll now move to an even much bigger megaproject.
Number 2: The Three Gorges Dam in
China china's yangtze river is the longest river in asia and has a long legacy of catastrophic floods.
Controlling the deadly waters has been a
Big problem for centuries and towards the end of the 20th century an ambitious plan was made.
China wanted to build a massive dam that would shield the population from fatal floods while also catering to power needs of millions of residents.
In total the dam was projected to cost around 9 billion dollars. Construction broke ground in 1994 with high ambitions but also big concerns. Altering the flow of the Yangtze would have a huge environmental impact and more than a million residents would need to be displaced from their homes. Some representatives in the congress also expressed concerns about whether the dam could really withstand the water masses and stop flooding. Despite the criticism, the construction was started and completed three years ahead of schedule. The massive dam stands at a height of 185 meters and its reservoir extends around 600km upstream along the river. There is enough steel in its structure to build 63 Eiffel. Towers while it is also the heaviest concrete structure on the planet.
Today, the Three Gorges Dam is the largest hydropower dam in the world with its 34 power plants. It has a total capacity of 22,500 megawatts and in 2020 it generated as much energy as the Netherlands consumed. By producing clean hydro electricity, the country is also reducing its dependence on coal-fired power plants and saving the atmosphere from 100 million tonnes of additional carbon dioxide annually. As far as construction goes, the megaproject has fulfilled its promises; however, the costs to build it have risen considerably over the years. According to official estimates, the total cost of building the dam crossed 37 billion dollars, making it four times higher than expected. While some of the costs can be attributed to inflation, more than 10 billion dollars went to relocating around 1.3 million residents. Additionally, they had to deal with landslides, water pollution, and other environmental damages. However, the biggest concerns about the Three Gorges Dam aren't related to cost overruns, but the future of the dam itself.
Worries about the structural integrity of the Three Gorges Dam are as old as the dam itself. Increased Earthquakes have raised the fear of one massive hit that could cause structural damage to the dam. In addition, there are concerns about the capacity of the reservoir. In 2020, during a period of torrential rains, the dam had to open its gates multiple times to release water from its reservoir. Some of the downstream areas saw record levels of flooding as a result. While China has spent 28 billion dollars more than originally intended on the Three Gorges. Dam, it is still quite some way behind the final megaproject on our list. Number 1: UK’s High Speed 2 Railway Britain's existing railway infrastructure goes back to the mid-19th century and is currently the busiest railway system in Europe.
The overcrowding and unreliable train services have become a common feature of the West Coast. Mainline and calls to replace it with a modern rail system grew louder and louder. In 2009, the Labor government decided to listen to the popular sentiment and developed a plan to build a high-speed rail connecting the country from the north to the south. The High Speed 2 was planned to connect eight of the UK’s largest cities in a Y-shaped rail network. According to the original plans, the HS2 would connect London to Birmingham and then branch out into legs going up to Manchester in the West and Leeds in the East. The plans also included a 20-kilometer-long Golborne Link that branched off from Manchester to join the West Coast Mainline, connecting Manchester to Edinburgh and Glasgow in Scotland. HS2 was designed to accommodate 18 trains per hour, more than any high-speed rail in the world. These trains will operate at high speeds of up to 360 kilometers per hour, making them some of the fastest trains in the world.
Construction on the 530-kilometer-long track was planned to be completed in 3 phases over the next two decades.
The budget for the biggest rail project
In europe was set at 37 billion dollars.
However, it quickly became clear that the budget estimates were over-ambitious and by the time the government revealed finalized routes in 2013, an internal review revised the budget to 67 billion dollars. Under-reporting the true costs of such massive mega projects is a common practice. It is done to make the project more attractive to the public and to make the approval process easier. The reality is that HS2 will pass through a complex landscape and use some of the most advanced engineering techniques in the world. Construction along the 530 kilometer route involves building more than 50 kilometers of tunnels and 20 kilometers of viaducts. The High Speed 2 will pass through some of the most expensive areas in Britain as well and a revised evaluation found that land acquisitions cost 2,4 billion dollars more than estimated.
The planners also failed to assess the ground conditions at the proposed route. Instead, estimates were made from desktop drawings and real ground data was unavailable to the planners. This caused delays and by 2015, inflation adjustments caused the overall budget to rise to $85 billion. However, there were concerns that the actual budget may be much higher. After sustained criticism and calls to dump the project, Boris Johnson's government promised another review of the project in 2019. The official review found that abandoning the project did not make sense as more than 12 billion dollars had already been spent on it. High Speed 2 would also have long-term benefits that will eventually outgrow the costs. The review estimated the costs of the project at around 135 billion dollars.
That’s why a large-scale trimming down of the project was recommended, including measures like reducing the number of trains and major changes to the second and third phases of the project. The construction of phase 1 was given the green light in 2020 and remains on track for completion between 2029 and 2033 - at least 5 years behind the original schedule. Meanwhile, a revised plan published in November 2021 curtailed most parts of the remaining phases including getting rid of the Eastern part altogether. It is too early to say whether the project will be a success or not, however, it is already one of the costliest megaprojects of the 21st Century. What do you think? Which of these megaprojects are worth their enormous costs, and which are not?