Infrastructure projects are complicated, often taking longer and costing more than expected. Our research shows that over 75% of capital projects go over time and budget. Given the growing scale of projects and the cost of capital, managing risk from the start is crucial to success of any capital project. We have found that there are a variety of factors which can cause capital project risk including: limited planning; inadequate stakeholder involvement; hampered cost and schedule controls; inexperienced management and a lack of skilled labour.
However we believe that risk management begins at the strategy phase and we advise clients to mitigate risks by doing the following:
Risk management is also about planning for the unexpected and being risk resilient. In the wake of more frequent and intense natural disasters resulting from climate change, urban migration, population growth, and the increased scarcity of natural resources, the public and private sectors are either facing or preparing to face the challenge of post-disaster rebuilding of infrastructure. Throughout the world there are inspiring examples of how the public and private sectors are collaborating to rebuild or prepare for future disasters.
To read more about how PwC works with clients on the risks associated with capital projects and infrastructure, click on the 'Of further interest' links.