First, make sure you are crystal clear in your requirements.
I hate to say it, but in my experience, blown deadlines are just as often a matter of unclear requirements or weak specifications on the part of a supervisor. First thing to do is to make sure the problem isn't either originating with, or exacerbated by, you.
Also, make sure your requirements are realistic, as well as his estimates.
Make sure that your own expectations aren't pushing him to make unrealistic estimates in order to meet unrealistic requirements.
Remember, you do the requirements, but the developer ALWAYS does the estimates, and should not be swayed with "can we do this any faster" unless you are also specifying functionality to be dropped.
Then, make sure he is tracking his time/tasks accurately, so you can get a good view of what is going on with the project.
This process will show any lack of proper time/task tracking, which may end up being the first step to improvement. If you can't see after the project how long a particular item took, that is probably the cause of the problem right there - not enough definition in the estimate, or missing "dependency" tasks that are discovered mid-project, but never estimated.
You HAVE to know how much time was spent doing what, accurately, before you can find out where the creep was, or what can be done about it.
Then, see where his estimates are failing and figure out why. Go over an estimate of a blown project, make that into a project itself - a problem to be solved.
Once you've determined that his estimates are indeed the source of the problem, go over an estimate that went over with him, and perhaps another developer, and figure out why.
This will help you figure out what the cause of the problem is. A solid understanding of the problem will likely be the actual solution.
Lastly, if you actually reach a point where you have to try punishment or coercion, it's time to fire him and start over.
Punishment and Coercion are appropriate responses to willful wrongdoing in certain situations.
However, if this developer is actively trying to do a good job, then you would only worsen the situation by generating negative attitude and frustration.
If the problem can't be solved, and you are sure the problem is with him, and not you, then it's time to fire him and get a developer who can meet deadlines. Great work doesn't mean much when your costs are blown up and profit goes out the window.