The project management research in brief titled "Delusion and Deception Taking Place in Large Infrastructure Projects," describes three reasons that cost overruns occur in large infrastructure project work. Briefly describe these three reasons

Question

What will be an ideal response?

Answer 1

In most cases, the causes of runaway costs come from one of three sources – over-optimism bias, deliberate deception, or simple bad luck.
Optimism bias — Executives commonly fall victim to delusions called the "planning fallacy" when it comes to projects. Under the planning fallacy, managers routinely minimize problems and make their decisions on the basis of delusional optimism — underestimating costs and obstacles, involuntarily spinning scenarios for success, and assuming best case options and outcomes.
Deliberate deception — Large capital investment projects often require complex layers of decision making in order to get them approved. Some opportunities to inappropriately bias the project (deception) occur when a project's stakeholders all hold different incentives for the project. If the project is grossly underestimated, the project contracts signed; once the project is "on the books," it tends to stay there.
Bad luck — A final reason for escalating project costs is simple bad luck. Bad luck implies that in spite of sound estimates, due diligence from all parties involved in the project, and the best intentions of both the contractors and project clients, there are always going to be cases where circumstances, environmental impacts, and sheer misfortune can conspire to derail a project or severely cripple its delivery.