Business Day

Brexit a mega-opera that looks set to miss its cue and budget

- TIM HARFORD Financial Times 2018

Go down to Bennelong Point and make such progress that no-one who succeeds me can stop this going through to completion.” That is how ailing politician Joseph Cahill ensured that the Sydney Opera House would be built, at least according to one of his successors.

Excavation­s for the project duly began at Bennelong Point. Cahill, the premier of New South Wales, died of a heart attack not long after. The Sydney Opera House was indeed completed, but in 15 years rather than five and at a cost of A$102m rather than A$7m a truly impressive cost overrun of nearly 1,400%.

Brexit, it seems, is also likely to overrun its original schedule, to the surprise of nobody who has been paying attention.

I decided to look up Prof Bent Flyvbjerg, perhaps the world’s leading authority on “megaprojec­ts”: large and ambitious endeavours such as hosting the Olympic Games, building a high-speed rail line or overhaulin­g a big IT system. Such projects often, though not always, go badly wrong.

Is it useful, then, to think of Brexit as similar to a large constructi­on or IT project? Flyvbjerg’s answer: yes, it’s a very useful analogy indeed. But, given the failure rate of megaprojec­ts, it is not an encouragin­g one. Brexiters will point out that some megaprojec­ts live up to their promise, most famously the Guggenheim Museum Bilbao, a visionary scheme delivered on time, on budget and with benefits outstrippi­ng any reasonable expectatio­ns.

Remainers anticipate the best-case Brexit scenario to be something more like the National Health Service programme for IT, abandoned after a decade and several billion pounds of wasted money.

Whichever side of this debate you are on, there is much to be learnt from studying megaprojec­ts. I gleaned six pieces of counsel from Flyvbjerg to improve chances of successful­ly delivering a complicate­d project. Checking the list against what is happening with Brexit makes my heart sink.

First: prepare thoroughly. This one is awkward. Public servants were banned by David Cameron’s government from preparing for Brexit before the referendum. Then, for her own reasons, his successor Theresa May scrambled to begin the article 50 countdown. “Zero preparatio­n”, says Flyvbjerg, “is as bad as it gets.”

Second: try to debias yourself, noting and adjusting for overconfid­ence, wishful thinking and other well-known cognitive biases. Alas, most British politician­s are wary of seeming negative or timid about Brexit, for fear of implying the electorate was unwise. Instead, both the government and opposition have embraced the goal of leaving while enjoying all the benefits of staying hardly an exercise in spotting obstacles.

Third: choose an experience­d team. Hmm Sir Ivan Rogers, the UK’s ambassador to the EU and an experience­d negotiator, abruptly resigned early in the process.

Fourth: try to break a large project into smaller, standalone chunks, so the failure of one is not a failure of everything. When everything is interconne­cted, small obstacles can snowball into major delays. (See also: the Irish border.) The logic of politics and diplomatic negotiatio­n for Brexit points in the opposite direction.: “Nothing is agreed until everything is agreed.”

Fifth: key decision-makers should be aligned, with everyone having an incentive to make things move smoothly. Alas, politics (again) pushes in the wrong direction here. Many of the people with power to smooth the way for May, from opposition leader Jeremy Corbyn to former foreign secretary Boris Johnson to the EU’s chief negotiator, Michel Barnier, have the incentive to make things difficult for her.

Finally: have an early warning system so problems can be spotted and fixed before they grow. Yet warnings are routinely derided as “Project Fear”.

Even without political pressures, megaprojec­ts are hard to deliver on time and on budget: their sheer scale opens up a thousand ways for things to go wrong. But they are always somewhat political, and Brexit is more political than most.

Even as a pure organisati­onal challenge, the project is likely to take far more time and money than advertised.

The Sydney Opera House itself is, of course, a stunning achievemen­t. But unlike the Guggenheim Bilbao it is an achievemen­t built on lies. Those lies came from politician­s who decided that an honest account of the likely costs would not achieve their goals.

They tarnished the reputation of Jørn Utzon, the architect who became the scapegoat for their impossible promises. Lauded far too late, he received no other major commission­s and never saw the finished Opera House.

As far as Brexit is concerned, we have dashed down to Bennelong Point and started shovelling frenetical­ly, desperate that no-one should “stop this going through to completion”.

Perhaps one day we will get the Sydney Opera House, although that seems unlikely. At the moment, we’re at the bottom of a deep hole and we are still digging. /©

EVEN AS A PURE ORGANISATI­ONAL CHALLENGE, THE PROJECT IS LIKELY TO TAKE FAR MORE TIME AND MONEY THAN ADVERTISED

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