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Cost Overruns and Demand Shortfalls in Urban Rail and Other Infrastructure

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  • Bent Flyvbjerg

Abstract

Risk, including economic risk, is increasingly a concern for public policy and management. The possibility of dealing effectively with risk is hampered, however, by lack of a sound empirical basis for risk assessment and management. The paper demonstrates the general point for cost and demand risks in urban rail projects. The paper presents empirical evidence that allow valid economic risk assessment and management of urban rail projects, including benchmarking of individual or groups of projects. Benchmarking of the Copenhagen Metro is presented as a case in point. The approach developed is proposed as a model for other types of policies and projects in order to improve economic and financial risk assessment and management in policy and planning.

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  • Bent Flyvbjerg, 2013. "Cost Overruns and Demand Shortfalls in Urban Rail and Other Infrastructure," Papers 1303.7402, arXiv.org.
    • Handle: RePEc:arx:papers:1303.7402
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    References listed on IDEAS

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    1. 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.
    2. Rubin, Thomas A. & Moore II, James E. & Lee, Shin, 1999. "Ten myths about US urban rail systems," Transport Policy, Elsevier, vol. 6(1), pages 57-73, January.
    3. Bent Flyvbjerg, 2007. "Policy and Planning for Large-Infrastructure Projects: Problems, Causes, Cures," Environment and Planning B, , vol. 34(4), pages 578-597, August.
    4. Flyvbjerg, Bent, 2005. "Measuring inaccuracy in travel demand forecasting: methodological considerations regarding ramp up and sampling," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(6), pages 522-530, July.
    5. Mackie, Peter & Preston, John, 1998. "Twenty-one sources of error and bias in transport project appraisal," Transport Policy, Elsevier, vol. 5(1), pages 1-7, January.
    6. Flyvbjerg,Bent & Bruzelius,Nils & Rothengatter,Werner, 2003. "Megaprojects and Risk," Cambridge Books, Cambridge University Press, number 9780521009461.
    7. Julius Margolis, 1970. "The Analysis of Public Output," NBER Books, National Bureau of Economic Research, Inc, number marg70-1, March.
    8. Maynard M. Hufschmidt & Jacques Gerin, 1970. "Systematic Errors in Cost Estimates for Public Investment Projects," NBER Chapters, in: The Analysis of Public Output, pages 267-315, National Bureau of Economic Research, Inc.
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