THE CHUNNEL AS AN EXAMPLE OF INCORRECT EVALUATION OF PUBLIC MEGAPROJECTS

Abstract

Public service megaprojects analysed with financial tools can give erroneous decisions as proved by the European Tunnel (Chunnel) which academics use as an example of megaproject failures. Financial analysis before its construction, comparisons with reference class megaprojects and its construction delays, cost overruns and performance below expectation in the first few years was shows as the Chunnel being a failure. However, 25 years later, the Chunnel is considered indispensable to the United Kingdom. This study analyses three common good megaprojects (CGMs) that have proven their benefits over decades to centuries to demonstrate that extant methods of evaluating megaprojects based on their financial cost and returns cannot capture their appropriate worth and long-term benefits. The research method is a qualitative approach in the interpretive paradigm, within the realist and pragmatist philosophies to get a holistic picture aided by a facility of discovery. When comparing the Chunnel with other megaprojects, it is revealed that the Chunnel, a public good, was treated as a business megaproject using market-based financial metrics. The study allows for new discussion to take place on an alternative model to select and evaluate CGMs in the future.