Cost overruns in transportation infrastructure projects: Sowing the seeds for a probabilistic theory of causation: Fid-Bau Portal

Cost overruns in transportation infrastructure projects: Sowing the seeds for a probabilistic theory of causation

Love, Peter E.D. / Ahiaga-Dagbui, Dominic D. / Irani, Zahir

Highlights • A review of the cost overrun literature for transportation infrastructure projects. • Two schools of thought have been used to explain the cause of cost overruns. • The need for a probabilistic theory of cost overrun causation. • A probabilistic theory will provide Governments with a holistic understanding of the uncertainties and risks that contribute to cost overruns.

Abstract Understanding the cause of cost overruns in transportation infrastructure projects has been a topic that has received considerable attention from academics and the popular press. Despite studies providing the essential building blocks and frameworks for cost overrun mitigation and containment, the problem still remains a pervasive issue for Governments worldwide. The interdependency that exists between ‘causes’ that lead to cost overruns materialising have largely been ignored when considering the likelihood and impact of their occurrence. The vast majority of the cost overrun literature has tended to adopt a deterministic approach in examining the occurrence of the phenomenon; in this paper a shift towards the adoption of pluralistic probabilistic approach to cost overrun causation is proposed. The establishment of probabilistic theory incorporates the ability to consider the interdependencies of causes so to provide Governments with a holistic understanding of the uncertainties and risks that may derail the delivery and increase the cost of transportation infrastructure projects. This will further assist in the design of effective mitigation and containment strategies that will ensure future transportation infrastructure projects meet their expected costs as well as the need of taxpayers.