"A low estimated cost does not cause a high actual cost"
A low estimated cost HIDES a high actual cost in order to obtain a contract under what amounts to fraudulent terms.
The nuclear industry's method is to get a contract with a lowball estimate, spend several hundred million and then raise the price. The sunk cost is the hook that keeps the sucker on the line through a series of similar incremental price escalations.
It has nothing to do with "regulatory ratcheting", it has to do with fraud and a negative learning curve.