IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v99y2017icp14-29.html
   My bibliography  Save this article

Off the rails: The cost performance of infrastructure rail projects

Author

Listed:
  • Love, Peter E.D.
  • Zhou, Jingyang
  • Edwards, David J.
  • Irani, Zahir
  • Sing, Chun-Pong

Abstract

Governments in Australia place great emphasis on the development and expansion of their rail networks to improve productivity and service the increasing needs and demands from businesses and commuters. A case study approach is used to analyze the cost performance of 16 rail projects constructed by a contractor between 2011 and 2014, which ranged from AU$3.4 to AU$353 million. Findings indicate that scope changes during construction were the key contributors that lead to the amendment of each project’s original contractual value. As a result, there is a need for public and private sector asset owners to establish a cost contingency using a probabilistic rather than a deterministic approach to accommodate the potential for scope changes during construction. To improve cost certainty during the construction of rail projects, it is suggested that use of collaborative forms of procurement juxtaposed with the use of Building Information Modelling and Systems Information Modelling are implemented. The utilization of such technological and process innovations can provide public and private sector asset owners charged with delivering and maintaining their rail networks with confidence projects can be delivered within budget and are resilient to unexpected events and adaptable to changing needs, uses or capacities.

Suggested Citation

  • Love, Peter E.D. & Zhou, Jingyang & Edwards, David J. & Irani, Zahir & Sing, Chun-Pong, 2017. "Off the rails: The cost performance of infrastructure rail projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 99(C), pages 14-29.
    • Handle: RePEc:eee:transa:v:99:y:2017:i:c:p:14-29
    DOI: 10.1016/j.tra.2017.02.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856416307194
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2017.02.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Oecd, 2016. "Intergovernmental organisation activities," Nuclear Law Bulletin, OECD Publishing, vol. 2015(2), pages 97-104.
    2. Cantarelli, C.C. & Flyvbjerg, B. & Buhl, S.L., 2012. "Geographical variation in project cost performance: the Netherlands versus worldwide," Journal of Transport Geography, Elsevier, vol. 24(C), pages 324-331.
    3. Verweij, Stefan & van Meerkerk, Ingmar & Korthagen, Iris A., 2015. "Reasons for contract changes in implementing Dutch transportation infrastructure projects: An empirical exploration," Transport Policy, Elsevier, vol. 37(C), pages 195-202.
    4. Cantarelli, C.C. & van Wee, B. & Molin, E.J.E. & Flyvbjerg, B., 2012. "Different cost performance: different determinants?," Transport Policy, Elsevier, vol. 22(C), pages 88-95.
    5. Odeck, James, 2004. "Cost overruns in road construction--what are their sizes and determinants?," Transport Policy, Elsevier, vol. 11(1), pages 43-53, January.
    6. ., 2016. "Governments, administrative divisions, and urban policies," Chapters, in: Understanding China's Urbanization, chapter 3, pages 88-133, Edward Elgar Publishing.
    7. Cantarelli, C.C. & Molin, E.J.E. & van Wee, B. & Flyvbjerg, B., 2012. "Characteristics of cost overruns for Dutch transport infrastructure projects and the importance of the decision to build and project phases," Transport Policy, Elsevier, vol. 22(C), pages 49-56.
    8. Love, Peter E.D. & Ahiaga-Dagbui, Dominic D. & Irani, Zahir, 2016. "Cost overruns in transportation infrastructure projects: Sowing the seeds for a probabilistic theory of causation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 184-194.
    9. Hodge, 2004. "Risks in Public-Private Partnerships: Shifting, Sharing or Shirking?," Asia Pacific Journal of Public Administration, Taylor & Francis Journals, vol. 26(2), pages 155-179, December.
    10. Lundberg, Mattias & Jenpanitsub, Anchalee & Pyddoke, Roger, 2011. "Cost overruns in Swedish transport projects," Working papers in Transport Economics 2011:11, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    11. Flyvbjerg,Bent & Bruzelius,Nils & Rothengatter,Werner, 2003. "Megaprojects and Risk," Cambridge Books, Cambridge University Press, number 9780521009461.
    12. Lin, Feng-Jyh & Wu, Shang-He & Hsu, Maw-Shin & Perng, Chyuan, 2016. "The determinants of government-sponsored R&D alliances," Journal of Business Research, Elsevier, vol. 69(11), pages 5192-5195.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Love, Peter E.D. & Sing, Michael C.P. & Ika, Lavagnon A. & Newton, Sidney, 2019. "The cost performance of transportation projects: The fallacy of the Planning Fallacy account," Transportation Research Part A: Policy and Practice, Elsevier, vol. 122(C), pages 1-20.
    2. Love, Peter E.D. & Zhou, Jingyang & Matthews, Jane & Lavender, Matthew & Morse, Troy, 2018. "Managing rail infrastructure for a digital future: Future-proofing of asset information," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 161-176.
    3. Molinari, Laura & Haezendonck, Elvira & Mabillard, Vincent, 2023. "Cost overruns of Belgian transport infrastructure projects: Analyzing variations over three land transport modes and two project phases," Transport Policy, Elsevier, vol. 134(C), pages 167-179.
    4. Savindi Caldera & Sherif Mostafa & Cheryl Desha & Sherif Mohamed, 2021. "Exploring the Role of Digital Infrastructure Asset Management Tools for Resilient Linear Infrastructure Outcomes in Cities and Towns: A Systematic Literature Review," Sustainability, MDPI, vol. 13(21), pages 1-25, October.
    5. Temitope Seun Omotayo & Bankole Awuzie & Valerie Kenechukwu Obi & Saheed Ajayi & Lovelin Ifeoma Obi & Oluyomi Osobajo & Adekunle Oke, 2022. "The System Dynamics Analysis of Cost Overrun Causations in UK Rail Projects in a COVID-19 Epidemic Era," SAGE Open, , vol. 12(2), pages 21582440221, May.
    6. Love, Peter E.D. & Ahiaga-Dagbui, Dominic & Welde, Morten & Odeck, James, 2017. "Light rail transit cost performance: Opportunities for future-proofing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 27-39.
    7. Coilín ÓhAiseadha & Gerré Quinn & Ronan Connolly & Michael Connolly & Willie Soon, 2020. "Energy and Climate Policy—An Evaluation of Global Climate Change Expenditure 2011–2018," Energies, MDPI, vol. 13(18), pages 1-49, September.
    8. Love, Peter E.D. & Ahiaga-Dagbui, Dominic D., 2018. "Debunking fake news in a post-truth era: The plausible untruths of cost underestimation in transport infrastructure projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 357-368.
    9. Jelena M. Andrić & Jiayuan Wang & Ruoyu Zhong, 2019. "Identifying the Critical Risks in Railway Projects Based on Fuzzy and Sensitivity Analysis: A Case Study of Belt and Road Projects," Sustainability, MDPI, vol. 11(5), pages 1-18, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Verweij, Stefan & van Meerkerk, Ingmar & Korthagen, Iris A., 2015. "Reasons for contract changes in implementing Dutch transportation infrastructure projects: An empirical exploration," Transport Policy, Elsevier, vol. 37(C), pages 195-202.
    2. Chong, Uven & Hopkins, Omar, 2016. "An international experience on the evolution of road costs during the project life cycle," Transport Policy, Elsevier, vol. 48(C), pages 60-66.
    3. Abeysekara, Baudhi & Perera, Piyaruwan & Chhipi Shrestha, Gyan Kumar & Gunaruwan, Lalithasiri & Kumarage, Amal & Sadiq, Rehan & Hewage, Kasun, 2021. "Improving the capital deployment efficiency: An infrastructure investment planning process in transportation project," Research in Transportation Economics, Elsevier, vol. 88(C).
    4. Dejan Makovšek & Marian Moszoro, 2018. "Risk pricing inefficiency in public–private partnerships," Transport Reviews, Taylor & Francis Journals, vol. 38(3), pages 298-321, May.
    5. Love, Peter E.D. & Ahiaga-Dagbui, Dominic D. & Irani, Zahir, 2016. "Cost overruns in transportation infrastructure projects: Sowing the seeds for a probabilistic theory of causation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 184-194.
    6. Cavalieri, Marina & Cristaudo, Rossana & Guccio, Calogero, 2019. "On the magnitude of cost overruns throughout the project life-cycle: An assessment for the Italian transport infrastructure projects," Transport Policy, Elsevier, vol. 79(C), pages 21-36.
    7. Miranda Sarmento, J.J., 2014. "Public private partnerships," Other publications TiSEM c7d4c978-234c-4f88-83ed-1, Tilburg University, School of Economics and Management.
    8. Makovšek, Dejan, 2014. "Systematic construction risk, cost estimation mechanism and unit price movements," Transport Policy, Elsevier, vol. 35(C), pages 135-145.
    9. Love, Peter E.D. & Ahiaga-Dagbui, Dominic D., 2018. "Debunking fake news in a post-truth era: The plausible untruths of cost underestimation in transport infrastructure projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 357-368.
    10. Molinari, Laura & Haezendonck, Elvira & Mabillard, Vincent, 2023. "Cost overruns of Belgian transport infrastructure projects: Analyzing variations over three land transport modes and two project phases," Transport Policy, Elsevier, vol. 134(C), pages 167-179.
    11. Love, Peter E.D. & Sing, Michael C.P. & Ika, Lavagnon A. & Newton, Sidney, 2019. "The cost performance of transportation projects: The fallacy of the Planning Fallacy account," Transportation Research Part A: Policy and Practice, Elsevier, vol. 122(C), pages 1-20.
    12. Servranckx, Tom & Vanhoucke, Mario & Aouam, Tarik, 2021. "Practical application of reference class forecasting for cost and time estimations: Identifying the properties of similarity," European Journal of Operational Research, Elsevier, vol. 295(3), pages 1161-1179.
    13. Odeck, James, 2014. "Do reforms reduce the magnitudes of cost overruns in road projects? Statistical evidence from Norway," Transportation Research Part A: Policy and Practice, Elsevier, vol. 65(C), pages 68-79.
    14. Miranda Sarmento, J.J. & Renneboog, Luc, 2017. "Cost overruns in public sector investment projects," Other publications TiSEM 51799a3e-4c78-4dbd-b330-b, Tilburg University, School of Economics and Management.
    15. Flyvbjerg, Bent & Ansar, Atif & Budzier, Alexander & Buhl, Søren & Cantarelli, Chantal & Garbuio, Massimo & Glenting, Carsten & Holm, Mette Skamris & Lovallo, Dan & Lunn, Daniel & Molin, Eric & Rønnes, 2018. "Five things you should know about cost overrun," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 174-190.
    16. James Odeck, 2019. "Variation in cost overruns of transportation projects: an econometric meta-regression analysis of studies reported in the literature," Transportation, Springer, vol. 46(4), pages 1345-1368, August.
    17. Catalão, Francisco Pinheiro & Cruz, Carlos Oliveira & Sarmento, Joaquim Miranda, 2019. "The determinants of cost deviations and overruns in transport projects, an endogenous models approach," Transport Policy, Elsevier, vol. 74(C), pages 224-238.
    18. Francisco Pinheiro Catalão & Carlos Oliveira Cruz & Joaquim Miranda Sarmento, 2023. "The entanglement of time and cost deviations in public projects," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(1), pages 241-272, March.
    19. 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.
    20. Brunes, Fredrik & Lind, Hans, 2014. "Explaining cost overruns in infrastructural projects: A new framework with applications to Sweden," Working Paper Series 14/1, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:99:y:2017:i:c:p:14-29. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.