The recent turmoil about the rising costs of the new metro-line in Amsterdam (” Noord-Zuid lijn”) leads to the usual comments and proposals by critics. More committees and more experts, tougher negotiators who can shift the riscs involved much more to the contractor, and so on.
I don’t buy it. Yes, probably you can and should manage these projects better. But the reality of these one-of-a-kind complex projects with a lot of unknowns is that there is a lot of risc. Building infrastructure underground in an old city is in the highest category.
In the Amsterdam case, once you made the decision that you need the line and you do not want to tear down houses to be able to build the line, there is no alternative.
You could have tried to get a fixed price contract where there was hardly any risc of cost overruns for the government. I am certain that the contractprice would have been far far higher than the current revised projections: the contractor would have taken margins for every imaginable situation, even the ones that have not materialized and will not materialize.
Unfortunately our chosen representatives usually want to have their cake and eat it at the same time. The cheapest possible costs projection combined with an unwillingness to understand and accept riscs.
And for Amsterdam? The real mistake was the deal with the central government. All cost overruns are for the city, creating a heavy burden (from 300 mio Euro to currently 900 mio Euro or more).
