Understanding the Landscape of Overruns in Transport Infrastructure Projects

Abstract

Cost and schedule overruns are endemic features of transport infrastructure projects. Despite the considerable amount of research within the field of transport and planning in the past thirty years, limited progress has been made to improving the performance of projects. We contend that this will continue to be an issue as long as research efforts focus on the ‘outside view’ with emphasis being placed upon strategic misrepresentation and optimism bias. Understanding ‘why’ and ‘how’ projects overrun, particularly from both ‘outside’ and ‘inside’ perspectives, is pivotal to reducing their impact and occurrence. Thus, in conjunction with the transport and planning literature, references to cost-overrun studies undertaken within the field of construction and engineering are examined. Our objective is to provide policy makers, industry, voluntary organizations, and the public at large with an ameliorated understanding about time-overrun and cost-overrun phenomena. Suggestions to mitigate overruns based upon recent process and technological innovations are identified and discussed.

How Stochastic Cost Estimates Could Be Applied in Relation to Target Value Design

“…Given the uncertainty and structural complexity, the use of deterministic historical cost database to estimate the cost of construction is not justifiable (Nguyen et al 2008). Love et al (2015) state that a base estimate (deterministic) plus the contingency figure typically form a project's estimated costs. Contingency can be defined as "the amount of funds, budget, or time needed above the estimate to reduce the risk of overruns of project objectives to a level acceptable for the organization" (PMI 2011).…”

Causations of failure in megaprojects: A case study of the Ajaokuta Steel Plant project

“…That is, the plan to achieve greater goals cannot be more important than giving a commitment to planning. It is also important to learn to separate politics from projects, not the least the need to evaluate project ambitions objectively (see Love et al, 2015). It was enough troubles that commitments were given to the project while exploratory investigations on crucial raw materials were not yet concluded.…”

“…In Flyvbjerg et al's (2013) view, client's opinions are sacrosanct: Opinions at variance are either deceptive or delusional. Love et al (2015) have provided an idealist view. They suggest variabilities are a constant feature of complex projects and that such projects deserve holistic consideration of issues such as clear integration between leadership and project systems.…”

Cost performance of public infrastructure projects: the nemesis and nirvana of change-orders

“…Cost overruns have been and continue to be the bête noire for the public sector in Australia (Love et al, 2015a;Love et al, 2017a;; this also is a problem worldwide (Flyvbjerg et al, 2002;Cantarelli et al, 2012;Odeck, 2014). Cantarelli et al (2012) has revealed that the size of the cost overrun that can materialize (i.e., from the decision to build to a project's practical completion) varies by geographical region.…”