Capital Projects in Public Sector are High Risk
Successful capital project delivery is a critical component of the asset growth and renewal cycle, but is is also only a small portion of the overall life cycle cost of an asset.
So how is it that capital costs (and the unfortunate experience of cost overruns) seem to attract so much attention in the public sector, yet annual operating costs generally get approved with very little attention? The primary reason for this dichotomy is the differences in these cost pools as summarized in the following table.
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