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Activity 7
Case 13.3 “Dear Mr. President—Please Cancel our Project!”: The Honolulu Elevated Rail Project
This case is a great current example of a very expensive project that was kicked off because of an
assumed need—to relieve congestion in downtown Honolulu through an elevated urban rail system.
Critics argue that in addition to having a ballooning cost, the actual planning was poorly conceived,
leaving Honolulu with an intrusive and ugly rail system through the downtown area, ruining panoramic
views, and impeding traffic. Additionally, advocates underestimated the power needs for the rail
system, requiring the transport authority to renegotiate electricity fees for the system. Finally, the
original costs that were assumed for the project were calculated during an economic downturn and
with the economy booming again, the costs of the project have gone up dramatically. All of these
elements points to a state Governor who is anxious to be rid of the project and hoping that President
Trump will deny additional federal funding, in which case the project will likely be cancelled.
Why are public works projects like the Honolulu Rail project nearly impossible to stop once
they have been approved, even if later cost estimates skyrocket?
Project Management researchers have charged that many large infrastructure projects, like
this one, suffer from “delusion” and “deception” on the parts of their advocates. Explain how
“delusion” might be a cause of ballooning budgets in this project. How does “deception”
affect the final project budget overruns?
Case Study 14.1—New Jersey Kills Hudson River Tunnel Project
This case illustrates the challenges in making an early termination decision. Often, particularly in the
case of public projects, there is a real difficulty in stopping a project once it has gotten “on the books.”
As a result, projects with huge cost overruns, like Boston’s “Big Dig” are allowed to continue almost
indefinitely. New Jersey Governor Chris Christie made a tough call in deciding to cancel the Hudson
River Tunnel project because he was given a number of rosy projections that did not match the actual
costs incurred to that date. This is a great case to let students pick sides: should Christie have
cancelled the project or not? There are arguments to be made that the need was strong (although
others could argue that the need was over-sold). On the other hand, the history of the project to date
and the uncertainty about future federal funding made it a real gamble, especially during a time of
economic recession.
How would you respond to the argument that it is impossible to judge how successful a
project like this one would have been unless you actually do it?
Take a position, either pro or con, on Christie’s decision to kill the ARC. Develop arguments to
support your point of view.
In your opinion, how clearly must a large infrastructure project like ARC have determined its
need, costs, and so forth before being approved? If the criteria are too stringent, what is the
implication for future projects of this type? Would any ever be built?

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