Belt-tightening Hong Kong needs to learn to avoid white elephant projects
- With a large budget deficit, the city should re-evaluate projects such as the Kau Yi Chau artificial islands to avoid costly but underused infrastructure like the Kai Tak Cruise Terminal and Hong Kong-Zhuhai-Macau Bridge
The story goes that the king of Siam would punish those who displeased him by giving them a white elephant, dooming them to the expensive upkeep of the sacred animal. Nowadays, the white elephant is a metaphor for a big, money-draining project, often an eyesore and a reminder of the time and resources wasted.
White elephants happen when projects are poorly conceived without much cost-benefit analysis or poorly designed without satisfying basic functional needs, or both. It is not uncommon for such projects to continue operating, at a loss, long after being proven useless. There are at least two reasons for this.
First, because the decision-makers suffer from the sunk cost fallacy – with so much invested, they are reluctant to abandon the project, cut their losses and move on. Second, because they refuse to admit failure and still long for a miracle that will turn the bad decision into a good one.
This is no different from the desperate gambler mentality that as long as one stays in the game, there is a chance to recover the loss, and even win.