Report for the Commission of Inquiry Respecting the Muskrat Falls Project

TL;DR

This report analyzes the international and national context of the Muskrat Falls hydroelectric project, focusing on cost and schedule overruns, their causes, and recommendations to mitigate such issues in future capital projects.

Contribution

It provides a comprehensive review of global and Canadian hydroelectric projects, identifying root causes of overruns and offering evidence-based recommendations for improvement.

Findings

Hydroelectric dams often experience significant cost and schedule overruns.

Root causes include optimism bias and strategic misrepresentation.

International best practices can reduce overruns in future projects.

Abstract

This report was commissioned by the Commission of Inquiry Respecting the Muskrat Falls Project to provide the national and international context in which the Muskrat Falls Project took place. The Commission asked for the report to cover three specific topics of questions: (1) What is the national and international context of the Muskrat Falls Project with regards to cost overrun and schedule overrun? (What are the typical cost and schedule overruns of hydro-electric dam projects? How do hydro-electric dams compare to other capital investment projects? How do Canadian projects compare to other countries?), (2) What are the causes and root causes of cost and schedule overruns? (3) What are recommendations, based on international experience and research into capital investment projects, to prevent cost and schedule overruns in hydro-electric dam projects and other capital investment projects? Keywords: Hydroelectric Dams, Megaprojects, Cost Overrun, Schedule Overrun, Optimism Bias, Strategic Misrepresentation, Infrastructure, Capital Investment Projects, Canada, Muskrat Falls