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Megaprojects and Regional Development: Pathologies in Project Planning

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  • Thomas Gunton

Abstract

G UNTON T. (2003) Megaprojects and regional development: pathologies in project evaluation, Reg. Studies 37 , 505-519. Post-project assessments are essential for understanding the strengths and weaknesses of regional development planning. Unfortunately, assessments of projects involving private sector participants that compare pre-project forecasts to post-project outcomes are rare because the necessary data are usually not publicly available. This paper helps fill this void in the literature by completing an evaluation that compares pre-project forecasts to post-project outcomes for one of the largest and most comprehensively planned megaprojects ever undertaken in Canada: the Northeast Coal Project (NECP). The evaluation shows that instead of achieving the expected net benefit of Can$0.9 billion (2000 Canadian $), the NECP incurred a net loss of Can$2.8 billion. The project also generated less than one-half of expected regional employment and failed to mitigate structural problems in the regional economy. Although project planners had all the information that should have led them to forecast this negative outcome, this information was either ignored or dismissed. The explanation for this seemingly irrational behaviour on the part of project planners is explained by a combination of errors in the evaluation methodology and interest group behaviour in regional resource development. Strategies to reduce the likelihood of these errors in future projects include improvements in evaluation methodology and changes in the institutional structure of project evaluation. G UNTON T. (2003) Des projets de grande envergure et l'amenagement du territoire: des pathologies dans l'evaluation des projets, Reg. Studies 37 , 505-519. Faire le bilan des projets est indispensable a la comprehension des forces et des faiblesses de la politique d'ame nagement du territoire. Malheureusement, rares sont les evaluations des projets necessitant la participation du secteur prive et qui comparent les previsions aux resultats parce que, normalement, les donnees ne sont pas disponibles au public. Cet article cherche a boucher ce trou dans la documentation en faisant une evaluation qui compare les previsions aux resultats pour l'un des projets de grande envergure les plus detailles et les plus importants qui n'ont jamais ete faits au Canada: le Northeast Coal Project (NECP). L'evaluation laisse voir que le NECP a encouru une perte de $2,8mds au lieu de re aliser la benefice nette prevue de $0,9mds (aux prix du dollar canadien en 2000). Le projet a engendre aussi moins de la moitie de l'emploi regional prevu et a echoue dans sa tentative de reduire certains problemes structurels au sein de l' economie regionale. Bien que les chefs de projet aient eu a leur disponibilite tous les renseignements susceptibles de leur permettre de prevoir les resultats negatifs, soit ils n'ont pas tenu compte de ces renseignements, soit ils les ont ecartes d'emblee. Ce comportement de la part des chefs de projet semble irrationnel et s' explique par une combinaison d'erreurs dans la methodologie d' evaluation employee et dans le comportement des groupes d' interet quant au developpement des ressources regionales. Des strategies destinees a reduire la possibilite future de ces erreurs incluent des ameliorations dans la me thodologie d'evaluation employee et des changements de la structure institutionnelle de l'evaluation de projet. G UNTON T. (2003) Grossprojekte und Regionalentwicklung: Pathologien bei der Projektbewertung, Reg. Studies 37 , 505-519. Nach Abschluss eines Projektes durchgefuhrte Gutachten sind wesentlich fur das Versta ndnis der Starken und Schwachen regionaler Entwicklungsplanung. Leider sind Begutachtungen von Projekten mit Privatsektorbeteiligung, welche die den Projekten vorausgeschickten Vorhersagen mit Ergebnissen nach Durchfu hrung des Projektes vergleichen, selten, denn die dazu benotigten Daten sind der Offentlichkeit meist nicht zuganglich. Dieser Aufsatz tragt dazu bei, diese Lucke in der Literatur zu fullen, indem er eine Bewertung fertigstellt, die dem Projekt vorausgeschickte Prognosen mit bei Abschluss des Projektes erreichten Ergebnissen eines der grossen und am umfassendsten geplanten Grossprojekte vergleicht, das je in Kanada unternommen worden ist: das Kohlenprojekt Nordost (Northeast Coal Project=NECP). Die Bewertung zeigt, dass das NECP statt des erwarteten Nettogewinnes von 0.9 Billionen US Dollar (2000 kanadische $) einen Nettoverlust von 2.8 Billionen $ erwirtschaftet hat. Das Projekt beschaffte auch weniger als die Halfte der erhofften Erwerbsstellen in der Region, und es gelang ihm nicht, die Strukturprobleme der regionalen Wirtschaft zu mildern. Obwohl den Projektplanern jegliche Information zur Verfugung stand, die es ihnen ermoglicht haben sollte, dieses negative Ergebnis vorauszusehen, wurden die Informationen oft nicht beachtet oder abgewiesen. Die Erklarung fur diese anscheinend irrationale Vorgehen seitens der Projektplaner lasst sich durch eine Verkettung von Irrtumern bei der Bewertungsmethodik sowie dem Verhalten von Interessengruppen bei der Entwicklung regionaler Ressourcen erklaren. Strategien zur Reduzierung der Wahrscheinlichkeit dieser Irrtumer bei zukunftigen Projekten schliessen Verbesserungen bei der Bewertungsmethodik und A nderungen in der institutionellen Struktur der Projektbewertung ein.

Suggested Citation

  • Thomas Gunton, 2003. "Megaprojects and Regional Development: Pathologies in Project Planning," Regional Studies, Taylor & Francis Journals, vol. 37(5), pages 505-519.
  • Handle: RePEc:taf:regstd:v:37:y:2003:i:5:p:505-519
    DOI: 10.1080/0034340032000089068
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    Cited by:

    1. A. N. Shvetsov, 2023. "State Participation in Transformation of Russia’s Socioeconomic Space," Regional Research of Russia, Springer, vol. 13(1), pages 192-223, March.
    2. Lehtonen, Markku, 2019. "Ecological Economics and Opening up of Megaproject Appraisal: Lessons From Megaproject Scholarship and Topics for a Research Programme," Ecological Economics, Elsevier, vol. 159(C), pages 148-156.
    3. Gunton, Cameron & Markey, Sean & Werker, Eric, 2021. "Evaluating British Columbia's economic policies for liquefied natural gas development," Energy Policy, Elsevier, vol. 151(C).
    4. Gunton, Cameron & Gunton, Thomas & Batson, Joshua & Markey, Sean & Dale, Daniel, 2021. "Designing fiscal regimes for impact benefit agreements," Resources Policy, Elsevier, vol. 72(C).
    5. Polydoropoulou, Amalia & Roumboutsos, Athena, 2009. "Evaluating the impact of decision making during construction on transport project outcome," Evaluation and Program Planning, Elsevier, vol. 32(4), pages 369-380, November.

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