ABSTRACT

Capital megaprojects (>US$1 billion) face a 65% failure rate, defined as cost overruns ≥25%, schedule delays ≥5%, or significant operational problems. Our research reveals six critical factors driving failures. (1) People and organisation (25–26% of issues): 70% of projects understaffed; only 15% of organisations report high agility. (2) Technical challenges (21–23%): operators often unprepared, especially in complex environments. (3) Governance (18%): 58% of projects misaligned with strategy; short-term focus impacts lifecycle value. (4) External stakeholders (14%): early engagement failures lead to disruptions. (5) Contracting and procurement (12–13%): inefficient strategies impact schedules, costs, and quality. (6) Project management processes (6–9%): poor front-end loading (FEL) implementation; projects average 26 months late. Our work has identified key mitigations for each. (1) Secure experienced teams: hire proven leaders and their established teams; implement talent management programs. (2) Early technology screening: engage vendors early, opt for proven technologies with ‘frozen experience’. (3) Prioritise lifecycle value: use reference class forecasting for realistic predictions; integrate risk assessment into decisionmaking. (4) Proactive stakeholder engagement: identify and engage stakeholders early, tailor communication strategies. (5) Strategic procurement: leverage sourcing power, establish vendor relationships, pre-order critical items. (6) Thorough FEL: allocate sufficient budget and time for detailed scope definition and risk assessment; use rigorous peer reviews. We bring our case study where targeted interventions orchestrated through a digital asset in front-end engineering and design (FEED) mitigated >A$1.5 B in capital expenditure (CAPEX) costs for a megaproject. By addressing these six areas systematically, the industry can significantly improve megaproject success rates and achieve the coming energy transformation capital delivery wave.