Decision Making and Major Transport Infrastructure Projects: The Role of Project Ownership

Hickman, R., Givoni, M., Bonilla, D. & Banister, D. (eds.). Handbook on Transport and Development, Cheltenham: Edward Elgar, pp. 380-393. 2015

23 Pages Posted: 9 Sep 2015  

Chantal C. Cantarelli

University of Oxford - Said Business School

Bent Flyvbjerg

University of Oxford - Said Business School

Date Written: August 1, 2015

Abstract

A main problem in the decision-making of major infrastructure projects is the high level of misinformation about costs decision-makers face in deciding whether to build the project. Reduced public funds and misallocation thereof were the main reasons for the revival of private financing in infrastructure planning. A first systematic study into the relation between project ownership and cost performance of transport infrastructure projects showed that the problem may not be the difference between private and public projects but a certain type of public ownership, i.e. state-owned enterprises. This study concluded that it is not ownership in itself that matters in project performance. Ownership does not reveal which parties are responsible for construction, operation, or maintenance. Consequently, we cannot draw any conclusions on whether private parties’ involvement results in better project performance. Based on a case study of the HSL-South, a high-speed railway line in the Netherlands, we found that the contracting strategy and the amount of private financing are better determinants for project performance.

Keywords: cost overrun, transport infrastructure, project ownership, project financing, decision-making, cost forecasting

Suggested Citation

Cantarelli, Chantal C. and Flyvbjerg, Bent, Decision Making and Major Transport Infrastructure Projects: The Role of Project Ownership (August 1, 2015). Hickman, R., Givoni, M., Bonilla, D. & Banister, D. (eds.). Handbook on Transport and Development, Cheltenham: Edward Elgar, pp. 380-393. 2015 . Available at SSRN: https://ssrn.com/abstract=2656800

Chantal C. Cantarelli (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Bent Flyvbjerg

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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