Time Overrun in Public Works—Evidence from North-East Italy

Abstract

Cost and time overruns in public mega-projects have been widely studied and considered as interdependent factors in the literature on project management and the public economy. On the other hand, small-scale projects for public works (costing under €100 million) are far more common and contribute to transforming cities and territories even more than mega-projects. Is the development of these kinds of projects affected in the same way by overrun issues? Do cost and time overruns always go hand in hand? The present contribution tries to answer these questions by means of an empirical study on a dataset of 4781 small public works planned and built in the Veneto Region (north-east Italy) from 1999 to 2018. Specifically, the analysis refers to the stage of development when the decision is made to outsource the work, that is, after the project’s design and before its construction. Our sample of data is considered both as a whole and clustered by period, cost, contractor and category of work. The results of our analysis and statistical modeling are counterintuitive, suggesting that time overruns do not depend on the cost dimension, whereas norms and regulations play a crucial part in extending the duration of public works. The threshold by law of 1 million € costs implies time-consuming procedures to verify abnormal offers in the bid, that double the average award time from 244 days to 479 days.