Use Cases

A cost contingency you can defend when the risk assessments disagree

When the owner, the contractor and the historical record disagree about overrun risk, ARGUS Council produces one certified contingency — and keeps every assessment on file

Aerial view of a railway line running straight through dense forest

USE CASE / MEGAPROJECT RISK

Published product metrics

Real megaprojects in the reference set

258

Rail shortfall of zero-contingency planning

83 pp

Fixed-link / road shortfall

96 / 50 pp

These figures match the published metrics on the ARGUS Council product page — this walkthrough is a composite scenario, not a specific engagement.

The challenge

When the owner, the contractor and the historical record disagree about overrun risk, ARGUS Council produces one certified contingency — and keeps every assessment on file

Segment: Infrastructure and megaproject risk

A blended contingency looks reasonable on the day it's agreed. The trouble comes years later, when the overrun matches the view that was averaged away and there's no record of who said what. Documented megaproject statistics show how expensive that is: across 258 real projects, zero-contingency planning falls 83, 96 and 50 percentage points short for rail, fixed-link and road projects respectively, against ARGUS's certified provision.

The approach

How the deployment was structured

Every assessment stays on record

The owner's, contractor's and reference-class views are all kept as they were submitted. Nothing is blended away before the decision is made.

A contingency that covers the full range of views

ARGUS sizes the contingency against the whole range of assessments — including the one that disagrees — rather than the middle of them.

Certified, or formally refused

The contingency ships with a Feasibility Certificate and an Optimality Gap Certificate. If the assessments are too thin or too dependent on each other to certify anything, ARGUS issues a formal abstain with a stated reason.

What changed

The result is one contingency figure that a board, a lender and a regulator can all read, backed by certificates rather than a negotiated average — and a record of every assessment that went into it, for the day someone asks why the number was what it was.

Product used