New data has revealed the vast scale of costs and delays to major engineering and construction projects in Canada and worldwide from recurrent causes, which are often predictable and avoidable.

According to the sixth annual CRUX Insight report on the damage done to engineering and construction projects worldwide, Canada is performing relatively well, particularly when compared to its closest neighbour, the U.S.

The report titled, Forewarned is Forearmed, analyses claims and disputes in major construction projects around the world and reveals a staggering prevalence of disputed costs and overruns. The report, published by HKA—the global risk mitigation and dispute resolution consultancy—analyzes more than 1,800 projects in 106 countries (including 99 projects in Canada), with a combined capital expenditure value (CAPEX) of $2.247 trillion.

The Canadian findings are summarized below:

• At 22 per cent of CAPEX, contentious costs in Canada are significantly lower than the global average (33.6 per cent) and the U.S. average (34.4 per cent).
• The average extension of time (EOT) claimed in Canada was 53.4 per cent of the planned project duration, compared to 60.3 per cent in the US and 67.1 per cent globally.
• Change in scope was the biggest cause for claims in Canada, affecting 32.7 per cent of projects. Incorrect design (26.5 per cent), unforeseen physical conditions (25.5 per cent), and workmanship deficiencies (20.4 per cent) are also top causes for disputes in the country.
• Despite being the biggest cause for claims in the country, change in scope was still less of a source for disputes in Canada (32.7 per cent) than globally (39.2 per cent).

The key global findings are listed below:

• Major construction projects globally are facing significant overruns in costs and delivery, with claims exceeding $91 billion in total value, and the cumulative overruns amounting to 876 years.
• Disputed costs amount to more than a third of project CAPEX (33.6 per cent) on average.
• Claims for EOT also reflect extreme project distress, typically prolonging planned schedules by more than two-thirds (67.1 per cent).