22
Nov
2016

Paper presented at the 38th Australasian Transport Research Forum

by Marion Terrill, Brendan Coates and Lucille Danks


This paper was written for the Australasian Transport Research Forum held in Melbourne 16th – 18th November. It won the J H Taplin Award for the best paper presented at the 38th Australasian Transport Research Forum.

Our 2016 report Cost overruns in transport infrastructure examined the extent of cost overruns on Australian transport infrastructure projects, their causes and consequences and the policy responses that this problem requires. We found that Australian transport infrastructure projects have overrun their promised costs by $28 billion over the last fifteen years. Rigorous, independent evaluation of business cases prior to governments making funding commitments, more efficient contingency management and routine reporting of projects’ realised costs and benefits would go a long way towards addressing this problem.

This paper presents these findings to an academic audience, along with a more detailed discussion of the regression analysis employed in the report. We found evidence of systematic cost overruns on Australian transport infrastructure projects. The findings indicate that cost overruns on Australian transport infrastructure projects are distorting project selection, as well as decisions regarding how much to invest.