Different Cost Performance: Different Determinants? The Case of Cost Overruns in Dutch Transport Infrastructure Projects

Transport Policy, vol. 22, pp. 88-95

21 Pages Posted: 22 Mar 2013 Last revised: 24 Jan 2015

See all articles by Chantal C. Cantarelli

Chantal C. Cantarelli

University of Sheffield Management School

Bert van Wee

Delft University of Technology

E.J.E. Molin

Delft University of Technology - Department of Transport and Logistics

Bent Flyvbjerg

University of Oxford - Said Business School; IT University of Copenhagen; St Anne's College, University of Oxford

Date Written: July 1, 2012

Abstract

This paper examines three independent explanatory variables and their relation with cost overrun in order to decide whether this is different for Dutch infrastructure projects compared to worldwide findings. The three independent variables are project type (road, rail, and fixed link projects), project size (measured in terms of estimated costs) and the length of the project implementation phase. For Dutch projects, average cost overrun is 10.6% for rail, 18.6% for roads and 21.7% for fixed links. For project size, small Dutch projects have the largest average percentage cost overruns but in terms of total overrun, large projects have a larger share. The length of the implementation phase and especially the length of the pre-construction phase are important determinants of cost overruns in the Netherlands. With each additional year of pre-construction, percentage cost overrun increases by five percentage points. In contrast, the length of the construction phase has hardly any influence on cost overruns. This is an important contribution to current knowledge about cost overruns, because the period in which projects are most prone to cost overruns is narrowed down considerably, at least in the Netherlands. This means that period can be focused on to determine the causes and cures of overruns.

Keywords: cost overruns, infrastructure, ex-post studies, the Netherlands

Suggested Citation

Cantarelli, Chantal C. and van Wee, Bert and Molin, E.J.E. and Flyvbjerg, Bent, Different Cost Performance: Different Determinants? The Case of Cost Overruns in Dutch Transport Infrastructure Projects (July 1, 2012). Transport Policy, vol. 22, pp. 88-95, Available at SSRN: https://ssrn.com/abstract=2237925

Chantal C. Cantarelli (Contact Author)

University of Sheffield Management School ( email )

9 Mappin Street
Sheffield, S1 4DT
United Kingdom

Bert Van Wee

Delft University of Technology ( email )

Stevinweg 1
Stevinweg 1
Delft, 2628 CN
Netherlands

E.J.E. Molin

Delft University of Technology - Department of Transport and Logistics

Jaffalaan 5
NL-2628BX
Delft
Netherlands

Bent Flyvbjerg

University of Oxford - Said Business School ( email )

Oxford
Great Britain

IT University of Copenhagen ( email )

Copenhagen
Denmark

St Anne's College, University of Oxford ( email )

Oxford
United Kingdom

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