Megaprojects: High Risk, High Reward
When we last covered this topic, we touched on the growing prevalence of megaprojects, enormous construction projects valued at over $1 billion that require an incredible amount of time, resources, and manpower. But where there is growth, there are growing pains, and construction companies are coming to find that the hurdles of a regular project are only magnified on a megaproject.
Below, our South FL contractor lawyers discuss the high-risk, high-reward nature of megaprojects and how your construction company can come out on top when contracted to work on one of these massive projects. For all your construction-related legal needs, trust the experienced team of attorneys at Cotney Attorneys & Consultants.
It is widely known that megaprojects have a poor success rate, but just how risky are these projects? According to findings published by FMI, it’s estimated that an incredible nine out of ten megaprojects go over budget — due, in part, to their incredible complexity and the difficulty that comes with estimating project costs. For example, rail projects were reported to have an average overrun of 44 percent with a demand shortfall of about 51 percent. Similarly, bridge and tunnel projects experienced cost overruns of 35 percent.
Delays are another issue that contractors must be concerned with. A delay on a small project can be easily mitigated and worked around, but on a megaproject, delays can end up costing millions of dollars per day. Nowhere is this more apparent than in our own backyard with the I-4 Ultimate project. At only 60 percent complete, this megaproject is already nine months behind schedule and $100 million over budget. This delay is in part due to “flaws in foundation design, Hurricane Irma, a bridge pier riddled with cracks, added tolling sites and an alleged opposition from local governments in requests for lane closures and detours.” This one project alone has already encountered a myriad of avoidable and unavoidable issues that make the prospect of taking on a megaproject unnerving. If you are encountering problems like these on your own project, be sure to consult a South FL contractor lawyer.
If megaprojects have such a low success rate, why are construction companies willing to risk it all for the chance of reaching project completion? It would be easy enough to say it’s for the money and leave it at that. After all, everyone from contractors to engineers to developers can enjoy long-term success with the completion of just one megaproject. But it’s more than that. Lawmakers are eager to back megaprojects and support the contractors and construction companies behind them, while media outlets are waiting to give free publicity to city-sending projects that impact the daily lives of residents. There’s also the pride that can be taken from being able to drive past a megaproject, point to it, and say, “I made that happen.” These catalysts help explain why contractors are banding together and putting everything on the line to complete projects involving sprawling roads, towering buildings, and mixed-use developments.
Related: Megaprojects on the Rise
Then there’s the impact that megaprojects have on their communities. Bustling project sites, loud and chaotic, are gradually replaced by magnificent structures that offer incredible utility to residents. These megaprojects aren’t just sources of income for construction workers; they are necessary developments to address our country’s aging infrastructure and provide for growing populations.
One such project is happening right here in Florida. The Miami Worldcenter is one of the largest private master-planned projects in the country. This 27-acre development, with its 30,000 sq. ft. of retail, 1,700-unit hotel and expo center, and numerous residential towers, is a necessity for a city that hosts over 400,000 residents and over 20 million visitors per year. In order for projects like this to reach completion, avoid crippling pitfalls, and remain profitable, contractors will need a partner that can help them remain on time and under budget.
Mitigate Risk With a Construction Attorney
At Cotney Attorneys & Consultants, our team of experienced attorneys have dedicated their lives to helping the industry professionals that make megaprojects a reality. We can provide the legal protection you need to ensure that your project reaches completion. Before you are overwhelmed by delays, cost overruns, and construction disputes, partner with a Broward contractor attorney from Cotney Attorneys & Consultants.
If you would like to speak with one of our Broward contractor attorneys, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.