OPTIMISM BIAS, PATHOGENS AND COST OVERRUN: THE CASE OF AN RTS PROJECT IN SOUTH AFRICA

The demand for electricity in South Africa is on the upward trend. To meet the demand, a state own enterprise embarked upon major infrastructure projects, which have been plagued with cost and schedule overrun. The overrun is particularly severe with return-to-service power projects. The aim of the study was to finds ways of understanding latent factors that promoted overrun in such projects. Thus, with the use of a case study, the paper presents the contributing factors to cost overruns, which were overlooked at project inception. Major stakeholders with planning and implementation responsibilities were interviewed on the case project. A clear trend that was observable by all the interviewees was the inability to address cost and time overrun that was encountered on the project due to the presence of ‘optimism bias and pathogens’ in the project environment. Rather, the urgent electricity demand provided a platform for the implantation of optimism bias and planning fallacy, which stimulated pathogens. The practice, industry, task and circumstance related pathogens thus influenced the scale of the cost overrun that has been reported on the case project. The notable insight provided by the exploratory study is that resident pathogens in a complex project environment can work in unison with optimism bias and planning fallacy to engender cost overrun.