Project risks budget exceedance used as a rejecting argument by activists

Project risks budget exceedance used as a rejecting argument by activists

Jan 14th, 2016

Project risks budget exceedance used as a rejecting argument by activists popped on our radar-screen a few days ago. Indeed we recently read an article stating that Environmentalists want the Ontario government (Canada) to abandon plans for a $13-billion refurbishment of four nuclear reactors at the Darlington generating station.

Project risks budget exceedance used as a rejecting argument by activists

We could not help but to remember a post we wrote about mega projects and the numerous cognitive biases that flaw our human reasoning. Indeed poorly made risk assessments, foster internal and public distrust.

Rail projects, highways, tunnels commonly end-up with 20%-70% budget exceedance and sometimes more. IPA (Independent Project Analysis ) has shown that projects of a wide range of capex are unsuccessful because of ubiquitous (endemic???) and significant budget exceedance.

As per Ontario, their nuclear construction history at Darlington left Ontarians with quite bad memories. That’s because of the $3.9billion initial estimate, in the late 1970s, increasing to $7.4 billion in 1981 when construction started. Finally inflating to a final cost of of $14.4 billion CAD.

Project risks budget exceedance used as a rejecting argument by activists

People and some NGOs (Greenpeace Canada) are concerned about the safety and health risks posed by nuclear power generation in the event of an accident. Additionally they say refurbishing the aging reactors at Darlington is not worth the risk. But has anyone done a proper Risk Assessment or are we just talking about opinions? We wrote in 2013 an article saying that the social licence to operate starts from good risk communication, which is exactly what seems to be missing in the latest opinions. They seem indeed to simplistically propose a „magic pill“ to solve the suspected strategic and tactical problems without any serious, unbiased and rational approach to the multi hazard risks of the alternatives.

Since Ontario obviously needs power, has anyone done a comparison of the risk of the alternatives? For example, as proposed by the activists, simply buying power from Quebec, after reinforcing power lines and the grid?

The comparative risk landscape will be quite interesting to study. Especially since it should steer the argumentation away from feelings and opinions and focus about facts. A healthy, unbiased, study, where conflict of interest opportunities are reduce as much as possible would help everyone.

 

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Category: Consequences, Risk analysis, Risk management, Tolerance/Acceptability

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