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Inaccuracy of traffic forecasts and cost estimates on large transport projects

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  • Skamris, Mette K.
  • Flyvbjerg, Bent

Abstract

Little research has been carried out on before-and-after studies of traffic and costs in large transport infrastructure projects. The few studies made all show a tendency for forecasts of construction costs to be underestimated, and for traffic forecasts to be overestimated. An examination of construction costs and traffic in seven large Danish bridge and tunnel projects shows that construction costs have been underestimated and traffic has been overestimated in the initial phases of planning. This pattern is also found in studies from other countries of large transport infrastructure projects. When the results of the Danish and the other projects are pooled together, the main lesson to be learnt is that cost overruns of 50-100% are common and overruns above 100% are not uncommon. Traffic forecasts that are incorrect by 20-60% compared with actual development are common in large transport infrastructure projects. The result of this overoptimism in the initial phases of planning is that decisions are based on misleading forecasts that may lead to a misallocation of funds and underperforming projects.

Suggested Citation

  • Skamris, Mette K. & Flyvbjerg, Bent, 1997. "Inaccuracy of traffic forecasts and cost estimates on large transport projects," Transport Policy, Elsevier, vol. 4(3), pages 141-146, July.
  • Handle: RePEc:eee:trapol:v:4:y:1997:i:3:p:141-146
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    Cited by:

    1. Athias, Laure & Saussier, Stéphane, 2007. "Contractual flexibility or rigidity for public private partnerships? Theory and evidence from infrastructure concession contracts," MPRA Paper 10541, University Library of Munich, Germany.
    2. Cruz, Carlos Oliveira & Marques, Rui Cunha, 2011. "Contribution to the study of PPP arrangements in airport development, management and operation," Transport Policy, Elsevier, vol. 18(2), pages 392-400, March.
    3. Patricia Mokhtarian & Ilan Salomon & Sangho Choo, 2005. "Measuring the Measurable: Why can’t we Agree on the Number of Telecommuters in the U.S.?," Quality & Quantity: International Journal of Methodology, Springer, vol. 39(4), pages 423-452, August.
    4. C. Guccio & G. Pignataro & I. Rizzo, 2012. "Determinants of adaptation costs in procurement: an empirical estimation on Italian public works contracts," Applied Economics, Taylor & Francis Journals, vol. 44(15), pages 1891-1909, May.
    5. repec:spr:epolin:v:45:y:2018:i:1:d:10.1007_s40812-017-0086-5 is not listed on IDEAS
    6. Odeck, James, 2004. "Cost overruns in road construction--what are their sizes and determinants?," Transport Policy, Elsevier, vol. 11(1), pages 43-53, January.
    7. repec:eee:retrec:v:63:y:2017:i:c:p:59-72 is not listed on IDEAS
    8. Brinkman, P. Anthony, 2003. "The Ethical Challenges and Professional Responses of Travel Demand Forecasters," University of California Transportation Center, Working Papers qt7vb2d17h, University of California Transportation Center.
    9. Cathy Macharis & Peter Nijkamp, 2013. "Multi-actor and multi-criteria analysis in evaluating mega-projects," Chapters,in: International Handbook on Mega-Projects, chapter 11, pages 242-266 Edward Elgar Publishing.
    10. Miranda Sarmento, J.J., 2014. "Public private partnerships," Other publications TiSEM c7d4c978-234c-4f88-83ed-1, Tilburg University, School of Economics and Management.
    11. Brinkman, P. Anthony, 2003. "The Ethical Challenges and Professional Responses of Travel Demand Forecasters," University of California Transportation Center, Working Papers qt6dv0z95g, University of California Transportation Center.
    12. Brinkman, Anthony P., 2003. "The Ethical Challenges and Professional Responses of Travel Demand Forecasters," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt9c3330tt, Institute of Transportation Studies, UC Berkeley.
    13. Malayath, Manoj & Verma, Ashish, 2013. "Activity based travel demand models as a tool for evaluating sustainable transportation policies," Research in Transportation Economics, Elsevier, vol. 38(1), pages 45-66.
    14. Mokhtarian, Patricia L & Salomon, Ilan & Choo, Sangho, 2004. "Data and Measurement Issues in Transportation, With Telecommuting as a Case Study," Institute of Transportation Studies, Working Paper Series qt9pt8s9jv, Institute of Transportation Studies, UC Davis.
    15. Tan, Zhijia & Yang, Hai, 2012. "Flexible build-operate-transfer contracts for road franchising under demand uncertainty," Transportation Research Part B: Methodological, Elsevier, vol. 46(10), pages 1419-1439.
    16. Flyvbjerg, Bent & Holm, Mette Skamris & Buhl, Søren, 2006. "Underestimating Costs in Public Works Projects: Error or Lie?," University of California Transportation Center, Working Papers qt98r01936, University of California Transportation Center.
    17. Peter Stopher & Stephen Greaves, 2007. "Guidelines for samplers: measuring a change in behaviour from before and after surveys," Transportation, Springer, vol. 34(1), pages 1-16, January.
    18. Trujillo, Lourdes & Quinet, Emile & Estache, Antonio, 2002. "Dealing with demand forecasting games in transport privatization," Transport Policy, Elsevier, vol. 9(4), pages 325-334, October.
    19. Athias, Laure, 2007. "Political accountability, incentives, and Contractual design of public private partnerships," MPRA Paper 10538, University Library of Munich, Germany.
    20. Daniel Shefer, 2014. "Sustainable Transportation and Urban Development," ERSA conference papers ersa14p306, European Regional Science Association.
    21. 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.
    22. 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.
    23. 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.
    24. Athias, Laure & Nunez, Antonio, 2008. "The more the merrier? Number of bidders, information dispersion, renegotiation and winner’s curse in toll road concessions," MPRA Paper 10539, University Library of Munich, Germany.

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