Project Lateness Impact

A delay in final delivery of the project (rather than just some tempo­rary delay somewhere during the time schedule of its construction) can arise from any combination of circumstances, ranging from poor supplier choices to matters beyond anyone’s control which result of poor project management. The result is a delay in the cash flow, illustrated below in Figure (6.8), and especially in the time it may take to being obtaining returns from the star-up of the opera­tional phase of the project. Often, projects draw loans from banks as a result of this delay, but as this figure also indicates, this can have impacts on profitability at the end of the project’s lifetime that may be greater than the losses accountable to increased costs alone.