Cost Overruns and Demand Shortfalls in Urban Rail and Other Infrastructure

Transportation Planning and Technology, vol. 30, no. 1, pp. 9-30

37 Pages Posted: 10 Mar 2013 Last revised: 25 Jun 2013

See all articles by Bent Flyvbjerg

Bent Flyvbjerg

University of Oxford - Said Business School

Date Written: February 1, 2007

Abstract

Risk, including economic risk, is increasingly a concern for public policy and management. The possibility of dealing effectively with risk is hampered, however, by lack of a sound empirical basis for risk assessment and management. This article demonstrates the general point for cost and demand risks in urban rail projects. The article presents empirical evidence that allow valid economic risk assessment and management of urban rail projects, including benchmarking of individual or groups of projects. Benchmarking of the Copenhagen Metro is presented as a case in point. The approach developed is proposed as a model for other types of policies and projects in order to improve economic and financial risk assessment and management in policy and planning.

Keywords: Urban rail, cost underestimation, cost overrun, demand shortfall, economic risk assessment and management

Suggested Citation

Flyvbjerg, Bent, Cost Overruns and Demand Shortfalls in Urban Rail and Other Infrastructure (February 1, 2007). Transportation Planning and Technology, vol. 30, no. 1, pp. 9-30. Available at SSRN: https://ssrn.com/abstract=2230421

Bent Flyvbjerg (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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