Huge construction projects fail because governments treat 'guesses' about the budget like they're carved in stone.
April 2, 2026
Original Paper
Technology Investment Governance Under Deep Uncertainty: The Case for Annual Portfolio Models in Public Infrastructure
SSRN · 6469862
The Takeaway
Because project budgets are legally locked in for decades based on initial estimates, they cannot adapt when reality shifts. The paper argues for 'Annual Portfolio Models' where projects are treated like flexible investments with yearly exit options, rather than permanent commitments.
From the abstract
<div> Technology investment forecasting has repeatedly proved unreliable for large-scale public infrastructure. Canonical tools — net present value appraisal and discounted cash flow modelling — require stable probability distributions for demand, costs, and discount rates that empirical evidence shows cannot be reliably estimated over decade-long or longer timescales of major infrastructure commitments. A 2026 European Court of Auditors report confirms that major EU transport flagship megaproje