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We can't afford to build It. So let's pay ÂŁ3 billion to wait.
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There's a fascinating way to save money in infrastructure. Stop building. Apparently, someone in the UK thought this was a brilliant idea. Take HS2. If you think the name of this railway project is spectacular, you should wait to see the cost overruns. The Government needed to control spending. Understandable. So what did they do? They delayed construction work. Reduced annual expenditure. And presumably celebrated the savings. Excellent. No money no deal… Except… if you need a piece of infrastructure, this is an infra trap. The decision to defer work was estimated to add between £1.9 billion and £3.1 billion to the project's total cost. Yes… with b of billion. Not my estimate. UK Treasury says that. So don’t kill the messenger. Every £1 of civil works deferred generated another £1.25 in additional costs. If you are not good in math, I put it to you. You don’t spend 100 million today. You’ll end up spending 225 million tomorrow. Well… at least the annual budget looks better. And the spreadsheet is green. Naturally, nobody in construction with more than 2 days of experience could possibly have anticipated that stopping and restarting work costs money. Demobilisation. Remobilisation. Lost productivity. Disrupted supply chains. Inflation. Who knew? Impossible to know… Well... Governments manage annual budgets. Infrastructure projects live across decades. And sometimes the decisions that make the first look better make the second considerably more expensive. Of course, I’m not suggesting that governments should approve projects without proper scrutiny… I’m tired of taxes… But… in my humble opinion… There's a difference between responsible decision-making and endlessly postponing decisions to avoid today's uncomfortable conversation. One protects taxpayers. The other can send them a considerably larger bill. These times of elections, remember this. Different minister. Different committee. Same taxpayer. Perhaps someone should introduce a KPI for that. If you're a CEO, Project Director or Board Member facing a decision nobody wants to make, perhaps it's worth discussing it before the consequences become considerably more expensive. Click below… Because sometimes the most expensive decision is the one nobody makes.
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Vicente Valencia
Weekly insights on how to perform when it matters | High-stakes decisions. Real situations. No BS. | 👇JOIN +2k readers 👇
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