This 17-page report gathers our learnings, after completing a house-building project, which painfully ended up 1-year late and 150% over budget. This teaches us not to underestimate construction challenges in our cost models; and what questions investors can ask to mitigate project risks?
In September-2025, Rob moved to a new home, deep in Estonia’s forests, looking out over the Baltic Sea. Now, I love it. But building this house has been financially and emotionally crushing.
Embarrassingly, the project ended up 1-year late and 150% over its original budget, due to high complexity and that ‘construction is hard’.
Not just for us, but 90% of construction projects take longer and cost more than expected. The average over-run is 60%. We have also seen 3-5x cost inflation when early-stage technologies move from back-of-the-envelope engineering estimates to real world project-building, as quantified on pages 2-4.
‘Construction is hard’. Almost everyone underestimates how hard. Pages 5-11 are an honest account of our own building issues, macro impacts and regulatory setbacks (including photos).
This is useful because we rarely see such specific details disclosed for public-domain projects that over-run on cost. Usually, operators simply cite vague reasons such as “higher labor and materials costs”.
Many of the issues that arose on our project will seem small-scale. But almost identical issues have occurred on mega-projects, at a larger scale. One major EPC contractor is forced to restructure every year, because even industry experts fail to predict how hard construction can be. Especially in LNG and nuclear. Examples are on pages 12-14.
Five lessons are learned from our own first-hand experience, and reviewing mega-project case studies. We conclude with the top questions every decision-maker should ask, when appraising upcoming projects, on pages 15-17.