‘Optimism bias’ often brings Muskrat Falls-style cost overruns, inquiry told
HAPPY VALLEY GOOSE BAY, N.L. — Hydroelectric dams like Muskrat Falls are particularly vulnerable to cost and schedule overruns, an expert testified Monday as a public inquiry into the Labrador hydro megaproject got underway.
Oxford University economics professor Bent Flyvbjerg, who is described on his faculty page as “the most cited scholar in the world in megaproject planning and management,” took the stand in Happy Valley-Goose Bay, N.L., to outline common mistakes and causes of cost overruns of such projects.
He said hydroelectric projects are particularly risky, seeing average cost overruns of 96 per cent and schedule overruns of 32 per cent, with little change over time since the 1950s.
The report also noted that dams doubled their budgets on average.