Understanding Cost Overruns: Lessons from the Sydney Opera House

Sage adds a manual input field in the cost-to-complete functionality.

By Janice Hoppe-Spiers, Senior Editor at Knighthouse Publishing

Cost overruns have become so common on large construction projects today that it is almost expected. About 90 percent of mega-projects will have an overrun of 50 percent or more, according to reports. Australia’s Sydney Opera House, for example, may be awe-inspiring and perceived as an amazing success to the every day person, but it was a failure from a project management standpoint. Construction took 10 years when it was originally estimated at four, resulting in a schedule overrun of 250 percent and a 1,300 percent cost overrun. The project was estimated at $7 million and was completed at $102 million.