The growing complexity of global megaprojects is increasingly impacting on the ability of global engineering, procurement and construction management groups to meet projects’ original deliverables, with a recent survey suggesting that the bulk of these projects routinely fail to meet among the most fundamental project objectives, Fluor Mozambique country head James Hughes said on Tuesday.

Addressing delegates at the Gas Africa conference, in Sandton, he referenced the results of a recent poll by benchmark specialists Independent Project Analysis (IPA), which revealed that, of 300 global megaprojects with budgets of over $1-billion, 65% failed to meet the objectives established at final investment stage.

“Among the criteria used by IPA to determine the fulfilment of objectives was whether anyone was harmed [during project development], whether the [final] cost and schedule was within 25% of the original budget and whether or not the project start-up and performance went as planned.

“The fact that so many projects fail at this is, quite frankly, shocking . . . and is something that keeps us up at night,” he commented.

Elaborating on the characteristics of contemporary megaprojects that drove increasing underperformance, Hughes cited the increasing size and complexity of these projects, which were accompanied by greater logistical challenges, increasing technical demands and a greater financial risk for owners and contractors.

“Modern megaprojects are higher, hotter and deeper [and extend further] than ever before,” he remarked.

In terms of project execution, modern projects also required the involvement of several role-players, requiring greater integration and communication between the various companies involved.

An acceleration in the level of local participation and stakeholder engagement had added further complexity, added Hughes, who further flagged the ability of companies to retain talent, while ensuring continuity, as critical to achieving success.

“Successful companies will figure out how to grow and retain the best talent…[and] some projects that didn’t [progress] well [were the result of problems] with continuity and people.

“You also need an alignment between all parties and a solid front-end effort with risk-assessed execution strategies. You need to identify what the project is for, as it could be a moneymaking scheme or aim to maximise employment or spend. This is a big area where projects can fail,” he commented.

Companies were also encouraged to introduce “realism” into their project planning and execution, ensuring diligent risk management that was coupled with “challenging” budgets and schedules.