Public Sector Project Characteristics

In 2018, Boeing signed a US$3.9bn contract to build two presidential Air Force One aircrafts – you know, the ones that fly the US president around the world. And if you’re of an earlier generation, the same aircraft Harrison Ford made famous in a movie from 1997.

Given that the contract is a public sector project, here are a few things that cannot possibly surprise you, and if they do, you’ve had your head in the sand for quite a while: 

1) The cost has increased. In this particular case, the first cost increase is expected to be a nice US$500m, or 13%. There will be further cost increases, this after all being a procurement by the government.

2) The project is delayed. For now, the delay is being pushed back by a year from its original completion of December 2024. Of course, it will be delayed again. Despite my ignorance of aeronautical construction, you can bank on delivery in 2026 or later.

3) There is no compensation for the delay. Well, there can’t be because the cost has increased.

4) Taxpayers will pay more. Almost every single citizen will be forced to pay more – children, the elderly, the homeless and regular income earners will all have to pay through a wide spectrum of taxes. Nobody has a choice. Boeing will get your money.

5)Nobody in government is accountable. Nobody will be fired for the delay or price hike. Nobody will compensate taxpayers. And nobody will be locked up in prison for the unbelievable waste. US$500m is a lot of hungry mouths and homeless nights.

Government has an important role in our everyday life. It’s a shame, that part of that role, part of the culture of the public sector, is to waste our time and money. As a one-off, a project delay and cost increase might be palatable. It’s unfortunate, that a timely, on-budget public sector project is the real one-off.