Boston’s “Big Dig” highway/tunnel project is considered to be one of the largest, most complex, and technologically challenging highway projects in U.S. history. In early 2003, Boston’s “Big Dig,” originally expected to cost less than $3 billion, was declared complete after two decades and over $14 billion for planning and construction. This project was clearly one that offered little value to the city if it wasn’t completed, so it continued far past what planners thought was a worthwhile investment, primarily because the federal government was paying 85 percent of its cost. With an estimated benefit of $500 million per year in reduced congestion, pollution, accidents, fuel costs, and lateness, but a total investment cost of $14.6 billion (a 470 percent cost overrun), it is expected to take 78 years to pay its costs back. The overrun is attributed to two major factors: (1) A major underestimate of the initial project scope, typical of government projects, and (2) lack of control, particularly costs, including conflicts of interest between the public and private sectors. One clear lesson from the project has been that unless the state and local governments are required to pay at least half the cost of these megaprojects, there won’t be serious local deliberation of their pros and cons.
Questions
- What elements of the project do you think escalated about 400 percent?
- What do you expect the outcome would have been if the city had been required to pay half the costs?
Source: S. Abrams, “The Big Dig,” Kennedy School Bulletin, Spring 2003, pp. 30–35; Project Management Institute, “Digging Deep,” PM Network, Vol. 18.
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