Large Infrastructure Projects in Germany: A Cross-sectoral Analysis

Kostka, Genia; Anzinger, Niklas

doi:10.1007/978-3-319-29233-5_2

Cited by 23 publications

(20 citation statements)

References 7 publications

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“…Since this was the first high-speed railway project in South Korea, the owner's abilities and strategies to manage such a project were limited during the implementation phase. As noted by other researchers (e.g., Kostka and Anzinger, 2016), geological conditions and unexpected underground obstacles caused frequent changes in the project and finally delays. In addition, they observed growing public resistance due to environmental concerns.…”

Section: Case Studiesmentioning

confidence: 71%

Cost overruns and delays in infrastructure projects: the case of Stuttgart 21

Steininger

Groth

Weber

2020

JPIF

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PurposeWe investigate causes for the cost overrun and delay of the railway project Stuttgart 21. Besides, we try to forecast the actual costs and completion date at an early stage.Design/methodology/approachThe results of exploratory research show the causes for the cost overrun and delay of Stuttgart 21; we compare our findings with other railway projects. To estimate the costs at an early stage, the reference class forecasting (RCF) model is applied; to estimate the time, we apply an OLS regression.FindingsWe find that the following causes are relevant for the cost overrun and delay of Stuttgart 21: scope changes, geological conditions, high risk-taking propensity, extended implementation, price overshoot, conflict of interests and lack of citizens' participation. The current estimated costs are within our 95% confidence interval based on RCF; our time forecast underestimates or substantially overestimates the duration actually required.Research limitations/implicationsA limitation of our approach is the low number of comparable projects which are available.Practical implicationsThe use of hyperbolic function or stepwise exponential discount function can help to give a clearer picture of the costs and benefits. The straightforward use of the RFC for costs and OLS for time should motivate more decision-makers to estimate the actual costs and time which are necessary in the light of the rising demand for democratic participation amongst citizens.Social implicationsMore realistic estimates can help to reduce the significant distortion at the beginning of infrastructure projects.Originality/valueWe are among the first who use the RCF to estimate the costs in Germany. Furthermore, the hyperbolic discounting function is added as a further theoretical explanation for cost underestimation.

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Section: Case Studiesmentioning

confidence: 71%

Cost overruns and delays in infrastructure projects: the case of Stuttgart 21

Steininger

Groth

Weber

2020

JPIF

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“…Only transparency about cost overruns will help considering the criticism about uncontrollable Olympic Games costs . Mega sport events are not the only project affected by cost overruns (Cantarelli, Flyvbjerg & Buhl 2012;Flyvbjerg, Holm & Buhl 2002;Kostka & Anzinger 2015;Lundberg, Jepanitsub & Pyddoke 2011;McKinsey 2015;Odeck 2004;Pickrell 1990;Singh 2010;Sovacool, Enevoldsen, Koch & Barthelmie 2016) . Delays in project implementations and cost overruns have repeatedly been a problem for public sector projects (Satyanarayana 1974) .…”

Section: Cost Overruns In Mega Projects and At Olympic Gamesmentioning

confidence: 99%

“…Studies on cost overruns deal primarily with infrastructure projects involving the construction of railways, bridges and tunnels, roads, wind farms and buildings in general (Abdulkadir, Muhammad, Gidado & Nuruddeen 2017;Abusafiya & Suliman 2017;Ali, Ali Mangi, Sohu, Jamali & Kateemullah 2017;Cantarelli et al . 2012;Flyvbjerg 2009;Flyvbjerg, Holm & Buhl 2002;Kostka & Anzinger 2015;Lundberg et al . 2011;Odeck 2004;Pickrell 1990;Singh 2010;Sovacool et al .…”

Section: Cost Overruns In Mega Projects and At Olympic Gamesmentioning

confidence: 99%

Cost and Revenue Overruns of the Olympic Games 2000–2018

Andreff

Weitzmann²,

Preuß

2019

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Die Reihe bietet ein Forum für empirische Studien zur ökonomischen Wirkungsanalyse von Großveranstaltungen in Sport, Kultur und Tourismus. Die Bände beleuchten gleichermaßen die Effekte der Großereignisse auf ihr sozioökonomisches Umfeld als auch den Einfluss von Standortfaktoren auf die Wettbewerbsfähigkeit und Governance der Eventwirtschaft. Die Themenfelder umfassen alle Stakeholder von Events und reichen von Primärerhebungen zum Reise-und Konsumverhalten von Eventbesuchern sowie zu Werbe-und Imagewirkungen von Großveranstaltungen über den gesellschaftlichen Beitrag von Events, etwa zum Volunteering, bis zu Analysen der Eventinfrastruktur wie Stadien-und Ligenmärkte oder Finanzierungsquellen. Die Schriftenreihe richtet sich an Lehrende und Studierende der Wirtschafts-, Sport-oder Tourismuswissenschaft sowie an Praktiker und öffentliche Entscheidungsträger in eventbezogenen Handlungsfeldern.

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“…Today, the contract ... has grown $ 128 million beyond the bid submitted that July day, an increase of nearly 60 percent." Other prominent examples of cost overruns include the new airport in Berlin (initial cost estimate A C 2.0 billion, final cost at least A C 5.4 billion, project not yet completed) and the Elbphilharmonie in Hamburg (initial cost estimate A C 114 million, final cost A C 789 million), see Kostka and Fiedler (2016) for a detailed discussion. In all of these cases design flaws and costly renegotiation are only one reason for the massive cost increases, but not the only one.…”

Section: Introductionmentioning

confidence: 99%

Procurement with Unforeseen Contingencies

Herweg

Schmidt²

2020

Management Science

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The procurement of complex projects is often plagued by large cost overruns. One important reason for these additional costs are flaws in the initial design. If the project is procured with a price-only auction, sellers who spotted some of the flaws have no incentive to reveal them early. Each seller prefers to conceal his information until he is awarded the contract and then renegotiate when he is in a bilateral monopoly position with the buyer. We show that this gives rise to three inefficiencies: inefficient renegotiation, inefficient production and inefficient design. We derive the welfare optimal direct mechanism that implements the efficient allocation at the lowest possible cost to the buyer. The direct mechanism, however, imposes strong assumptions on the buyer's prior knowledge of possible flaws and their payoff consequences. Therefore, we also propose an indirect mechanism that implements the same allocation but does not require any such prior knowledge. The optimal direct and indirect mechanisms separate the improvement of the design and the selection of the seller who produces the good. JEL classification numbers: D44; D82; D83; H57.

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Large Infrastructure Projects in Germany: A Cross-sectoral Analysis

Cited by 23 publications

References 7 publications

Cost overruns and delays in infrastructure projects: the case of Stuttgart 21

Cost overruns and delays in infrastructure projects: the case of Stuttgart 21

Cost and Revenue Overruns of the Olympic Games 2000–2018

Procurement with Unforeseen Contingencies

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