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Several factors were involved. The proposal to build the venue and the sponsorship of the construction came from the New South Wales government; as with any government-sponsored undertaking, politics became a complicating factor. When the government changed during the time of construction, designer and original architect Jorn Utzon resigned under controversial circumstances, contributing to time delays and cost increases. Construction processes and materials were revolutionary and needed to be developed and refined, which added to time and expense. Changes in the specifications regarding what was to be built also extended the process.
I believe the major difficulty in building the opera house was the fact that guidelines in terms of "design parameters" and total costs were not established. There were a great many proposals set forth in the "competition" to find a designer of an opera house that would house two halls: one for operatic performances and another for symphony concerts. So the main requirement was not cost or design limitations, but the end product. This never bodes well when fiscal concerns are to be met: because in this case, they were never presented.
The plan that was eventually adopted is said to have been one that had been originally rejected. Jørn Utzon created a design that caused a great deal of public interest and excitement. The design included elements never attempted before (including the use of ceramic tiles for the "shell") which made its construct "cost-prohibitive," and changes in the original design slowed down the construction as well.
Cost overruns contributed to populist criticism and a change of government resulted in 1966 to Utzon’s resignation, street demonstrations and professional controversy.
A great deal of the money needed was raised by "gambling:" a lottery was developed specifically to help with the costs of the opera house. Over 105 million dollars was raised in this way.
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