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Cost performance of transport infrastructure projects before and after the global financial crisis (GFC): Are differences observed in the conditions of project performance?

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  • Moschouli, Eleni
  • Soecipto, Raden Murwantara
  • Vanelslander, Thierry

Abstract

The aim of this research is to identify whether the conditions affecting the performance of European transport infrastructure projects, which are completed before and after the global financial crisis (GFC) (2008), are different. The projects that are tested are 22 European projects that are completed before the financial crisis and 25 European projects that are completed after. The method used is the fuzzy set Qualitative Comparative Analysis (fsQCA). One outcome is tested, being whether or not projects are delivered within the budgeted cost (on/over cost) till their completion. Findings show that after the GFC, the quality of the external environment, in terms of the institutional and the financial-economic context, matters more in order to deliver transport infrastructure projects on cost to completion. This means that transport infrastructure projects’ performance is depending on conditions exogenous to the projects more than before the GFC. The level of the cost of capital of the financing scheme is also an important condition, although for projects completed after the GFC, a low cost of capital can still lead to projects being over cost, when the external environment is unfavourable and the remuneration scheme brings high income risks and low cost coverage. Having a robust business model with respect to reducing costs during the construction phase of the project, which is a key factor based on literature, was found to matter both for the occurrence and non-occurrence of the cost outcome for the projects completed before the crisis, when combined with other conditions, but only for the non-occurrence of the cost outcome for the projects completed after the crisis.

Suggested Citation

  • Moschouli, Eleni & Soecipto, Raden Murwantara & Vanelslander, Thierry, 2019. "Cost performance of transport infrastructure projects before and after the global financial crisis (GFC): Are differences observed in the conditions of project performance?," Research in Transportation Economics, Elsevier, vol. 75(C), pages 21-35.
    • Handle: RePEc:eee:retrec:v:75:y:2019:i:c:p:21-35
    DOI: 10.1016/j.retrec.2019.02.004
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    2. Love, Peter E.D. & Ika, Lavagnon A., 2021. "The ‘context’ of transport project cost performance: Insights from contract award to final construction costs," Research in Transportation Economics, Elsevier, vol. 90(C).

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    More about this item

    Keywords

    Cost performance; Financial crisis; Fuzzy set qualitative comparative analysis; Transport infrastructure projects;
    All these keywords.

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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