There are instances of public sector budgets, especially in developing economies, failing to meet stakeholder expectations. These have led to variations in scope, duration and cost, as well as a plethora of sub-standard projects.
I believe project budget over runs in developing economies are usually caused by factors extraneous to the project. Any amount of cost estimation and best budgeting techniques and tools may not totally accommodate the demands made by some officials at the different inspections and approvals stages and during procurement process of the project who require their palms to be greased for anything to move. We could also look at the drivers of inflation in developing economies that may be galloping away making even management or contingency reserves insufficient. Maybe a ROM of +100%!
There is a number of reasons for project failures - not only in the public sector and not only in developing countries.
Some of the most important are:
- weak requirements analysis and/or requirements that are changed after project
start, e.g. changes in government leading to new priorities
- insufficient effort estimation resulting in schedules & budgets that are too
optimistic
- inadequate resources e.g. lack of skills, delayed assignments
- external factors e.g. bankruptcy of key supplier, unexpected price changes
- insufficient risk/opportunity management e.g. resulting in a lack of preventive
measures such as hedging, insurances, back-to-back agreements
- project reporting & controlling, together with stakeholder interaction that fails to
ensure that progress respectively deviations from the project plan are transparent
and adequate compensating measures can be taken.
So, definitely, mature project management practices can address these challenges and will strongly contribute to projects that meet stakeholder expectations.
In the case of public sector projects, it is of high importance to
- gain transparency on all stakeholder groups (e.g. responsible ministry, interest
groups, as well as the broader public) and
- execute consequently on a stakeholder interaction plan that ensures timely