Denicol, J; (2020) Reinventing Megaproject Delivery Models: The Rise of the Capable Client—The Supply Chain Architect. Project Management Institute: Newtown Square, PA, USA.

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Abstract

Megaprojects are usually proposed by the public sector as a reflection of the government delivering a new physical asset to address a necessity of the society, improve living conditions, foster business relationships, and impact the economic performance. The large amount of capital for infrastructure projects is tightly aligned with the fast and exponential global population growth, which, according to the United Nations, will reach 8 billion by 2030 and 9.7 billion by 2050 (United Nations, 2019). Considering the high rate of budget overruns and delays in megaprojects, it is important to explore in depth the potential of innovative client models to deliver megaprojects. Considering the global infrastructure pipeline forecasted for the next decades, this research explores the formation of megaproject client organizations, which are new, dedicated, and often temporary entities created to deliver the project on behalf of the sponsor. The research is novel as it investigates three megaprojects in real time and adopts a supply chain management lens to conceptualize the formation and evolution of inter-organizational relationships. It contributes to two literatures, construction supply chain management and project delivery models, by exploring the megaproject client organization as the focal firm and its strategies to design the supply chain architecture. It builds upon previous research by exploring a different challenge to manage the supply chain in one-off settings, exploring the concurrent formation of a new entity and its supply chain strategies. Six megaprojects that at the time represented a combined investment of £93.93 billion have been analyzed in the United Kingdom: High Speed 1 (£6.16 billion), Heathrow Airport Terminal 5 (£4.3 billion), London 2012 Olympics (£8.77 billion), Crossrail (£14.8 billion), Thames Tideway Tunnel (£4.2 billion), and High Speed 2 (£55.7 billion). The empirical data were collected through 210 semistructured interviews with senior megaproject leaders. Key research findings include: (i) the identification of the megaproject multilayer and multilevel organizational structure, identifying multiple organizational roles and responsibilities; (ii) understanding of the terminologies of owners, sponsors, clients, and operators in megaprojects, as well as the dynamics of its nonstatic and evolutionary nature throughout the project life cycle, unpacking who does what, when, how, and why; (iii) the process of the formation of temporary client organizations and the dimensions of the rationale behind the strategic decisions over time, in light of the plurality of potential integration methods between client and delivery partners; (iv) the importance of a clearly defined governance structure and recommendations to organize the inter-organizational relationships between sponsors, clients, delivery partners, and the supply chain. This research improves the understanding of the formation and evolution of megaproject client organizations, illustrating how the emerging temporary organizations design the supply chain architecture and the dynamics of the associated inter-organizational relationships. The research contributes toward a more informed, systemic strategic decision making by the client organization, impacting the inter-organizational relationships with the supply chain to improve megaproject delivery. Considering the sequential development of these projects, there is an opportunity to understand the evolution of the UK market as a client in delivering megaprojects, exploring the similarities and differences of the inter-organizational structures created over time. The aim is to provide guidance for megaproject promoters, policy makers, and practitioners in their strategic decisions in the front-end of those projects, increasing the knowledge of innovative structures to address the increasing global investment in megaprojects.

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