Abstract The cost performance of infrastructure projects is a serious problem worldwide. This paper aims to analyse the generating process of cost overruns along the various phases of the project life-cycle. To this purpose, we employ a large dataset of Italian transport infrastructure projects for roads, started and completed during the period 2000–2013. Applying the same methodology used by the construction management research, we breakdown the various phases of the project life-cycle as well as the related cost items (estimated or actual) to analyse empirically the role of each phase in the overall evolution of cost overruns. Specifically, we pay particular attention to the costs for the physical execution of the work, distinguishing them from all other costs. The results show that Italian public infrastructure works suffer from significant cost overruns in the execution phase. However, the Italian contracting authorities seem to systematically overestimate the size of the final costs for the physical realization of the work. This risk aversion attitude is more relevant when considering financial coverage (rather than budget) and it is likely to leave room for opportunistic behaviours in the execution phase. In terms of policy implications, our results suggest the adoption of more stringent (and objective) criteria to assess the project budget and to provide its financial coverage.
Highlights This study analyses the generating process of cost overruns along the various phases of the project life-cycle. We employ a large dataset of Italian infrastructure projects for roads, started and completed in 2000–2013. We breakdown the various phases of the project life-cycle and identify the related cost items (estimated or actual). The results show that Italian public works suffer from significant cost overruns in the execution phase. At the same time, the contracting authorities overestimate the financial needs for the projects.
On the magnitude of cost overruns throughout the project life-cycle: An assessment for the Italian transport infrastructure projects
Transport Policy ; 79 ; 21-36
2019-04-03
16 pages
Article (Journal)
Electronic Resource
English
Cost overruns , Project life-cycle , Transport infrastructure , Roads , Italy , H4 , R4 , D8
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