Underestimating Costs in Public Works Projects: Error or Lie?

Flyvbjerg, Bent (2014) Underestimating Costs in Public Works Projects: Error or Lie? In: Flyvbjerg, Bent, (ed.) Megaproject Planning and Management: Essential Readings, vol. 1. Edward Elgar, Cheltenham, UK and Northampton, MA, pp. 182-198.

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Abstract

This article presents results from the first statistically significant study of cost escalation in transportation infrastructure projects. Based on a sample of 258 transportation infrastructure projects worth US$90 billion and representing different project types, geographical regions, and historical periods, it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.

Item Type: Book Section
Keywords: megaprojects
Subject(s): Project management
Centre: BT Centre for Major Programme Management
Date Deposited: 09 Jul 2014 13:57
Last Modified: 23 Oct 2015 14:08
Funders: Not applicable
URI: http://eureka.sbs.ox.ac.uk/id/eprint/5127

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