Benchmarking Cost Overruns in Transportation Infrastructure Investments

Alolote Ibim Amadi; Amadi Kelvin Chijioke

Abstract

Highway projects have historically experienced significant cost overruns, with front end implications for the sustainability of transportation investments. However, the criteria for assessing cost overruns continues to elicit diverse opinions and has become a debatable issue in the literature. Some studies allude to detailed design stage estimates, while others tag conceptual stage estimates, as the ideal benchmark for quantifying the project cost deviations. A survey of the literature, principally from scholarly articles and the technical press is carried out. This is with a view to identify popular opinion on the phase of development, which should ideally constitute the basis for assessing cost overruns in transportation investment. This study weighs and evaluates the literature arguments. The findings show that there is no uniform nomenclature in the literature for labeling the phases of development and that different terminologies are evident. However, the majority of the literature arguments favour the ‘decision to build’ stage. The study espouses benchmarking cost overruns at the ‘decision to build’ stage to provide a sustainable platform for assessing the viability of transportation infrastructure Investments.Keywords: Accuracy of Estimates, Conceptual Estimates, Cost Overruns, Development Phases, Highway Projects.