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Cost overruns in Swedish transport projects
KTH.
Mass Rapid Transit Authority of Thailand.
Swedish National Road and Transport Research Institute, Society, environment and transport, Transport economics Stockholm.ORCID iD: 0000-0001-7976-5628
2011 (English)Report (Other academic)
Abstract [en]

Cost overrun of transport projects is one of the most important problems in transport planning. It also makes the result of the cost-benefit analyses uncertain, thus decreasing their usefulness for decision making. In recent years more emphasis has been put on improving cost calculations and reducing cost overruns, in Sweden and internationally. Still cost overruns have not decreased. We find that the average cost overrun in Swedish road projects is similar to other countries, while it is lower than in other countries for rail. Small projects (< 100 million SEK) have much higher cost overruns than large projects and constitute a large share of total overruns. A project type with large overruns, both in absolute and relative terms, is new rail tracks on existing lines. To improve cost estimates in Sweden, the Successive Calculation method has recently been applied. We find that the variance is significantly lower in these than in actual outcomes, and that the difference is surprisingly small between projects in different planning stages. Another method, Reference Class Forecasting, is demonstrated in two case studies. It results in higher required uplifts. An interesting way forward would be to develop risk-based estimating, based on principal component analysis. To do that, a database needs to be collected, which in turn demands better follow-up procedures.

Place, publisher, year, edition, pages
Stockholm: Centre for Transport Studies Stockholm, Swedish National Road & Transport Research Institute (VTI), KTH Royal Institute of Technology, S-WoPEc, Scandinavian Working Papers in Economics , 2011. , 16 p.
Series
CTS Working Paper, 2011:11
Keyword [en]
Transport infrastructure, Investment, Road, Railway track, Cost, Budget, Estimation, Calculation, Method
National Category
Economics
Research subject
Railway: General works, surveys, comprehensive works, Railway: Economics; Road: General works, surveys, comprehensive works, Road: Economics
Identifiers
URN: urn:nbn:se:vti:diva-645OAI: oai:DiVA.org:vti-645DiVA: diva2:669340
Available from: 2013-12-03 Created: 2013-12-03 Last updated: 2017-02-22Bibliographically approved

Open Access in DiVA

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