Transportation infrastructure cost underestimation: investigating the front-end debate

Alolote Amadi and Dominic D. Ahiaga-Dagbui

International Journal of Project Organisation and Management, 2021, vol. 13, issue 4, 301-328

Abstract: The underestimation of the final cost of transportation infrastructure projects has attracted significant scholarly attention and media coverage. While strategic misrepresentation and optimism may have gained recent notoriety for explaining the underestimation problem, traditional schools of thought insist the root sources lie principally within the domains of technical issues and poor conceptual project shaping at the front-end. Given this ongoing dialectical debate, this study investigates the front-end estimating practices of three highway agencies in Nigeria to establish the validity of these dichotomous theories. The findings show that although political motives strongly underlie the project appraisal practices of the highway agencies, there was not much evidence to support strategic misrepresentation/optimism bias. Rather, the study reveals that apart from the deployment of simplistic methods of conceptual costing, there is a discernible lack of control gateways at the front-end of project shaping and decision planning stages, which has fostered dysfunctional project practices.

Keywords: cost overrun; cost underestimation; developing countries; front-end processes; highway agencies; project appraisal; public projects; technical explanations; theoretical explanations; transportation infrastructure. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijpoma:v:13:y:2021:i:4:p:301-328

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