## 5 Discussion of the Australian HSR Risks
### Concept Phase Risks Preventing Realisation
#### 5.2.1 Cost and Time Estimates  
The literature review presented a list of Australian mega projects that experienced time and cost blowouts. This highlights the severity of this issue, with many rail and transport projects experiencing severe cost and time blowouts in the magnitude of billions. The AHP analysis in this research also confirmed this, with cost and time overruns ranking 1 st and 2 nd, respectively. Further, the survey participants also ranked the inflated cost of HSR development and construction in the top 4 th percentile. This makes it an important barrier to its implementation. The first step towards ensuring no cost and time blowouts is to ensure that the initial budget and time estimates are accurate. P4 agreed and argued the most significant risk is having an accurate budget forecast. P4 raises the initial error project leaders make is creating a project that fits into a predetermined budget--_\"Well, I can only approve $3 billion, right? Well, that's how much it's gonna cost\"_. This happens partly because of external or political factors discussed in Section 5.2.3. Fitting a project into a predetermined budget might help get it approved. However, due to a lack of budget confidence, treasuries are growingly challenging to commit to new mega projects. This may justify why it is important to model the budget appropriately. P2, P1, and P4 all reference the author [PERSON] [14; 26; 30], who was deemed an expert in the mega project governance domain and was referenced multiple times in the literature review. They refer to the Theory of Reference Class Forecasting (RCF) [30; 66], which says to check what the budget has been for similar past projects to reduce optimism bias and strategic misrepresentation in estimates. As identified in the literature review, range-based estimates were suggested by many authors [2; 14; 67]. [PERSON] is very much in agreement with this idea for his upcoming Sydney to Newcastle HSR business case. [PERSON] mentioned that in the case of the HSRA business case for the Sydney to Newcastle alignment, they planned to _\"get cost planners to build up a bottom-up estimate... based on a 10% design\"_. [PERSON] also briefly visited the idea of RCF theory by taking the cost estimate and deducing \"how much is it per kilometre? And how does that compare to the industry benchmark\"? The RCF theory backs the triangulation method highlighted, and it compares the Australian HSR project with other HSR projects around the globe, as shown in Figure 11 below. [PERSON] hoped the Australian HSR project would appear next to Spain in the chart shown in Figure 11 below. [PERSON] emphasised the importance of _\"working through and getting the scope\"_ right, explaining that _\"the more defined the scope is, the more likely you are to estimate the price\"_ accurately. During the interview, [PERSON] shared a relevant example from the UK's Crossrail project: _\"Three years into Crossrail, they started facing budget challenges, and the team immediately considered cutting scope instead of looking at how to mitigate risks more aggressively\"_. This highlights the need to prioritiise risk mitigation rather than reducing project scope when costs escalate. As [PERSON] put it, _\"the key is, first, getting the scope right\"_. The literature review highlighted how changes in project scope can lead to cost increases, a finding further confirmed by interview insights. Another important way to ensure that the project stays within the budget and time estimates is to really focus on supply chain management. Particular focus on important materials like concrete and steel needed for construction is key, as highlighted by [PERSON] and [PERSON]. This was another key learning in the literature [14] which emphasises the importance of managing the supply chain effectively to avoid delays and cost overruns in megaprojects. [PERSON] points out that a well-coordinated supply chain can mitigate risks related to procurement, logistics, and price fluctuations.