Abstract
The paper aims to explore the financial and risk management challenges in mega-projects, focusing on the interplay between these two domains. By examining the Stuttgart 21 project, a large-scale infrastructure initiative in Germany, the study seeks to provide insights into how effective risk management influences financial performance, offering practical recommendations for future mega-project management. The research adopts a case analysis approach, evaluating the Stuttgart 21 project using a longitudinal study of its financial performance through DuPont's financial model. The study also applies the resource-based view (RBV) and risk breakdown structure (RBS) frameworks to assess the project's risk management strategies. The study reveals that inadequate risk management correlates with poor financial outcomes, particularly in cost overruns and debt management. It identifies the gaps in the early stages of risk assessment and budgeting that contribute to these issues. Additionally, the findings highlight the need for better integration of technology and innovation in risk management to avoid scope creep and improve project success rates. This research contributes to the literature by (1) providing a detailed financial analysis of a specific mega-project, (2) advancing the understanding of practical risk management in complex, multi-stakeholder projects, (3) linking financial performance with risk management strategies, and (4) offering a case-based approach to explore the dynamics of mega-project management. The study's recommendations have practical implications for policymakers and project managers in designing more resilient financial and risk management frameworks for future large-scale infrastructure projects.