Kostka: “Cost explosions can be avoided” | Hertie School Case Study about the BER Airport and the Elb Philharmonic.
Berlin, 19 May 2015 – When the costs of large public infrastructure projects go off the rails, the mistakes can often be traced back to the early planning stages and the overall project governance. This point is illustrated by case studies about the Berlin Airport BER (125 per cent cost overruns) and the Elb Philharmonic (146 per cent cost overruns). The author Jobst Fiedler explains, “In both cases a large proportion of the cost overruns became unavoidable because the project organization was set up incorrectly and contracts were signed based on an insufficient planning foundation.” The case studies are part of the Hertie School of Governance study Large Infrastructure Projects in Germany – Between Ambition and Realities, under the leadership of Genia Kostka. Kostka on these findings: “Large public projects with out of control costs threaten the credibility of politicians and the public sector. Our research shows that this can actively be prevented.”
This study, under the leadership of Genia Kostka, Professor of Governance of Energy and Infrastructure, analyses the scale, patterns and causes of cost overruns in 170 large public infrastructure projects in Germany. Of those, 119 were finished between 1960 and 2014 and 51 are currently still under construction. Projects from the building, transportation, defence, energy and ICT sectors are analysed based on systematically planned versus real budgets. Three detailed case studies on the Berlin Airport BER, the Elb Philarmonic and Offshore Wind Parks round out the investigation.
The study was made possible by the friendly support of the Karl Schlecht Foundation.
The detailed working paper and case studies are available for download here.