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Estimations in Project Management
Example of Estimations
So we have seen how estimation is done in small projects with only a few players. But what about a large project? The problem is people’s mental machinery is the same regardless of the magnitude of the project.
Here is a story about a bridge over the Moscow River, close to Moscow City Center. The bridge by itself is quite remarkable, not only because of its architecture and location, but also because of magnitude of bad decisions that were made both during the original construction and later during the rebuilding. It is a dual subway/highway bridge with a subway station located on the lower deck of the bridge. The bridge connects Moscow’s South West with Moscow City Center.
The bridge was completed in 1959 in 15 months. During its construction, somebody decided to accelerate the hardening of the concrete in the main structural arcs by adding salt. It is hard to discover why and by whom such seemingly small but catastrophic decision was made, but soon after the bridge was completed, engineers noticed a fast corrosion of the reinforcement steel, which was due to the salt. A decision was made to try and cosmetically repair the bridge. The cosmetic measures were unsuccessful and in 1984 the subway station closed. However, highway on the upper level continued to operate.
The managers then decided to repair the bridge by replacing the major support structures while allowing the highway traffic to continue. How long would it take? It was difficult to estimate as the task was very complex, and some tasks that would be required had never been done before. The original estimate was nine years.
Apparently, the original estimate was biased. The availability heuristic definitely played a role as there was no historical data on which to base the estimates, the activities related to the disassembling of pre-stressed reinforced concrete structures had never been attempted before. It is quite possible that motivational biases were involved as well.
The reconstruction project started relatively fast, but later slowed significantly down due to technical issues. In the early 1990’s construction almost halted due to budgetary problems related to the collapse of Soviet Union. Only in 1999 did the situation improve when another highway bridge nearby was completed. Traffic was rerouted to the new bridge and the old bridge was closed and almost completely demolished. The rebuilt bridge, which replicated the original design, was completed in 2001 and has been reopened to traffic. The subway station reopened in 2002. The rebuilding project took 18 years, twice the length of the original estimate of nine years.
This story teaches us few important lessons. First, many uncertainties, both technical and budgetary, were not properly captured in the analysis, which skewed the estimate. In addition, the mistakes in estimations caused an incorrect strategic decision. In hindsight, it would have been easier to build new highway bridge in another location rather than attempting to repair the existing bridge without disconnecting the traffic. However, because the original nine-year estimation looked reasonable, the managers did not select the new bridge scenario.
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