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Cost overruns and delays in infrastructure projects: the case of Stuttgart 21

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  • Steininger, Bertram

    () (Department of Real Estate and Construction Management, Royal Institute of Technology)

  • Groth, Martin

    () (RWTH Aachen University)

  • Weber, Birgitte

    () (RWTH Aachen University)

Abstract

Cost overruns and delays in infrastructure projects are not a recent problem. They have systematically occurred globally, in different sectors, and over time. We find that various causes are relevant for the cost overrun and delay of Stuttgart 21 – one of the largest railway projects in Germany in the last 100 years. Among them are project scope changes, geological conditions, high risk-taking propensity, extended implementation, price overshoot, conflict of interests, and lack of citizens’ participation. To estimate the costs at an early stage, we apply the reference class forecasting model and thereby forecast the current estimated costs within a confidence interval. To estimate the time, we apply an OLS regression for the different subsections and underestimate or substantially overestimate the duration actually required.

Suggested Citation

  • Steininger, Bertram & Groth, Martin & Weber, Birgitte, 2020. "Cost overruns and delays in infrastructure projects: the case of Stuttgart 21," Working Paper Series 20/11, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
  • Handle: RePEc:hhs:kthrec:2020_011
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Cost overrun; time overrun; infrastructure; reference class forecasting; hyperbolic discounting; principal-agent theory;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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