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Cost confidence starts upstream: why early project assurance matters

An early cost estimate is often one of the first figures attached to an infrastructure project. Developed during initial planning, it helps organisations understand potential investment requirements, inform business cases and consider funding options. But as a project progresses, that early figure can sometimes become treated as a fixed budget, even while the scope, design and delivery requirements are still being developed.

Marc Humm Daniel Butterick

Australia

New Zealand

Working around an environment that never truly stops

This creates a challenge for water utilities managing significant infrastructure investments. Decisions made using early estimates can shape funding expectations and procurement strategies long before the full cost implications of a project are understood. From my experience working across the infrastructure sector, there is considerable value in challenging those estimates earlier. Rather than waiting until a project experiences cost pressure, organisations can build greater confidence by testing scope, assumptions and risks before making major commitments.

An estimate is only as strong as the information behind it

Early cost estimates serve an important purpose. They provide an initial understanding of likely investment requirements and help organisations assess whether a project should progress. However, their reliability depends on the quality and maturity of the information available. At the beginning of a project, scope may still be developing, engineering requirements may not be fully defined and decisions about procurement or delivery may remain unresolved.

Scope and design can also develop at different rates. A project may have established objectives and requirements without having sufficiently developed designs to support the level of cost confidence being sought. These uncertainties influence the level of confidence that should be placed in an estimate. The challenge arises when an indicative figure begins to carry the expectations of a more developed delivery budget without sufficient recognition of what remains unknown.

As the project progresses, additional information can change the estimated cost. This does not necessarily mean the original estimate was incorrect. It may simply reflect a better understanding of what needs to be delivered. The important distinction is ensuring that decision-makers understand the maturity and limitations of the estimate they are relying on.

Why scope and cost confidence need to develop together

Cost confidence cannot be separated from scope confidence. When a project's requirements are not sufficiently defined, it becomes more difficult to understand the likely cost of delivery and the risks that may affect it. For water utilities, this can be particularly challenging when upgrading or renewing ageing infrastructure while maintaining essential services. Unlike some other infrastructure projects, water and wastewater assets often need to remain operational while works are undertaken.

Existing asset conditions, site and ground conditions, interfaces with operational networks and stakeholder requirements can all influence how works are planned and delivered. As design and planning progress, previously unidentified requirements may emerge. Changes to scope, construction methodology or delivery arrangements can influence both cost and schedule. These changes are not always avoidable. Infrastructure projects are complex, and estimates need to evolve as more information becomes available.

What matters is how uncertainty is identified, assessed and communicated throughout the planning process. A more considered approach involves regularly reviewing the relationship between scope development and cost expectations, rather than allowing the original estimate to remain unchanged while the project evolves. This helps organisations understand whether the funding assumptions supporting a project remain appropriate as it moves towards procurement and delivery.

Stress-testing estimates before going to market

One of the greatest opportunities to strengthen cost confidence is before major investment and procurement commitments are made. At this stage, organisations can benefit from challenging the assumptions that underpin a project's estimated cost, particularly where the scope is still developing. This means looking beyond the headline figure and asking some important questions.

How clearly has the scope been defined, and does the design maturity support the estimate? Are site and ground conditions sufficiently understood? Have existing utility interfaces and stakeholder requirements been identified? Consideration also needs to be given to how the project will be delivered. Construction methodology, operational constraints, procurement strategy and market conditions can all influence cost expectations. Importantly, risk assessments need to be sufficiently robust to identify the uncertainties that could materially affect delivery, with appropriate allowances reflected in the estimate.

These considerations help establish what is known, where uncertainty remains and what requires further investigation before commitments are made. An independent review can provide a valuable perspective, particularly where project teams have been working with the same assumptions throughout the planning process. The objective is not simply to challenge the estimate for the sake of it. It is to identify areas that may require further definition and give decision-makers a clearer understanding of the financial commitments they are considering.

From early assurance to investment confidence

Cost reviews remain valuable throughout project delivery, particularly when organisations need to understand their forecast cost to complete or respond to changing circumstances. However, reviewing a project once it is already under financial pressure presents a different challenge from assessing its cost assumptions before procurement. By the time contracts have been awarded and delivery is underway, some decisions may be more difficult to revisit.

Bringing experienced cost advisory specialists into the earlier planning stages provides an opportunity to identify uncertainty before it becomes embedded in funding and delivery commitments. RPS supports water utilities by bringing cost advisory expertise into infrastructure planning and investment decisions. Working alongside our project management, risk and project controls specialists, our cost advisors can help clients challenge estimates, assess scope and delivery assumptions, evaluate cost risks and strengthen the information informing procurement and investment decisions.

This also extends beyond initial capital expenditure. For water infrastructure, understanding whole-of-life costs, including ongoing operations, maintenance and future renewal requirements, can help utilities assess the longer-term implications of an investment rather than focusing solely on upfront construction costs.

For water utilities managing complex capital programs, stronger cost assurance supports broader decisions about investment priorities, funding requirements and procurement readiness. The value is not in eliminating uncertainty, but in understanding it early enough to inform decisions.

Confidence before commitment

Infrastructure projects will always involve uncertainty, and no estimate can account for every change that may occur during delivery. However, organisations can improve their understanding of cost risk by ensuring that scope, design, delivery assumptions and estimates are appropriately tested as projects develop.

For water utilities planning significant infrastructure investment, bringing cost assurance into the early stages can support more informed funding, procurement and delivery decisions, while providing a clearer understanding of longer-term investment requirements. Ultimately, cost confidence is built progressively. The strongest time to challenge a project's assumptions is before those assumptions become commitments.