Cost Overrun in Retrofit and Rebuild Estimation
Definition
Systematic cost overruns in retrofit and rebuild contracts caused by inaccurate labor availability and material cost forecasting. Projects consistently exceed budgets by 12-97%.
Key Findings
- Financial Impact: AU$125,909,372 (19% overrun on AU$665.5M actual work vs. AU$539.6M budgeted; range: 12.83%-96.73% per project)
- Frequency: 100% of projects tracked (16 projects, 2011-2014)
- Root Cause: Labor supply/demand and material cost forecasting performed manually; scope changes account for 99% of cost increases
Why This Matters
The Pitch: Australian railroad equipment manufacturers waste AU$125.9M annually due to cost estimation failures. Automation of labor/materials forecasting eliminates 19% budget overruns.
Affected Stakeholders
Project Estimators, Cost Controllers, Procurement Managers, Contractors
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Possession-Driven Estimation Delays in Rail Projects
Procurement Method Misselection Cost Impact
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