Cost Overruns in Road Projects Under Public Pirvate Partnership

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Cost Overruns in Road Projects Under Public Pirvate Partnership

INTRODUCTION

Background of the Study

Cost overruns have been a burning issue in infrastructure development generally and in transport projects particularly. The importance of cost overruns can be determined from the fact that it has been affecting the viability of any project to the extent that any inferior project could be selected over the superior project. In contemporary times when resources are scarce, policy makers are facing great difficulty in assessing the true viability of any transport projects in private-public sector since, if it failed to get finish with the allocated resources, it can greatly hurt the reputation and credibility of the policy and decision makers which have selected the project in the first place (De Bruijn and Leijten, 2007).

Purpose of the Study

Infrastructure development is must for any nation aspiring to move forward and grow. Cost overruns have become a common element in infrastructure development and majority of projects across the globe have reported major cost overruns; 10% - 30% cost overruns are quite normal. However, even though it is very common, it led to inaccurate assessment of the project viability and increased the chances of choosing an inferior project over a more viable one (Flyvbjerg et al, 2003). Like any other sector, much importance has been given to cost overruns in the transport sector and measures have been taken to overcome this issue. Even though, figures are not even satisfactory. The purpose of this study is to explore all the possible and actual causes for cost overruns for the road projects in all the public sector including public private partnership. This research will contribute to the existing literature present in the field of research on cost overruns and allow the decision makers to take them into consideration while engaging in any decisions in all the road projects.

Rationale of the Study

Any construction project is based on numerous assumptions and taken into account in evaluating a budget is certainly complex. This is why financial models should be developed tailored to take into account all these assumptions. Large or small, all construction projects should be evaluated in the same way and consider all possible scenarios from the start. First, it would allow a better assessment of project costs and then, it would provide alternative measures in case things do not go as planned. The rationale beyond this study is that governments resources are scarce so policy makers and other stakeholders must be acquainted the causes/reasons of cost overruns in public private partnered road projects so that measures could be taken to, if not to eliminate, at least to minimise the cost overruns.

Aims &Objectives

The aim of this study will be to examine the causes of cost overruns in transport projects within UK. These aims will be achieved by attaining the following objectives:

To review the literature for possible causes of cost overruns in infrastructure projects, in particular transportation projects

To explore and identify the causes of cost overruns in ...