Link to thesis. - Concept - NTNU

Cost development in quality-assured major infrastructure projectsAbstractThe cost developments from the early stages of definition to the actual outcomes were analyzedin a complete count of 28 major transportation infrastructure projects that had been subjected toinstitutionalized framework for up-front assessment and quality assurance. It is shown that thedevelopment of costs in the early stages of a project has the most significant impact on actualcost. Alone, a cost control measure introduced prior to the decision to build has little impact onthe budgeted cost. The presentation of actual outcomes shows that cost estimates may be morereliable, but observed cost reductions are negligible, if costs presented at the early stages ofdefinition are taken into account.IntroductionThe purpose of this paper is to examine projects subjected to a large project improvementscheme in Norway with respect to salient matters including whether up-front assessment andquality assurance guard against underestimation of cost, whether agreed boundaries for costdevelopment are followed in practice and the extent to which improved budgetary compliance isencouraged. This is done by analyzing the cost estimates from the early stages of definition tocompletion in transportation infrastructure projects. While previous studies in this area havecompared budgeted costs (costs at the time of decision to build) with actual outcomes, often onthe basis of unsystematic selections of diverse, albeit large, samples of projects, this study isconcerned with investigating the cost development from the early stages of definition tocompletion in a selection of projects planned and executed under a common framework forproject improvement that was first implemented in 2000. Magnussen and Olsson (2006) were thefirst to attempt an analysis of the development of cost estimates in the early stages of projectssubjected to up-front assessment and quality assurance. In that paper, the results from a study of31 projects in transportation infrastructure, public building, defence procurement andinformation technology were presented. This paper focuses on projects in a single sector,transportation infrastructure, but extends the view to also include the early stages of projectdevelopment and actual performance.As is the case in many similar studies, the nature of this study indicates that caution should beexercised in interpreting its results. All the projects examined were carried out under theNorwegian Public Roads Administration 1 (NPRA), which may seem unrepresentative, since theyrepresent only a sub-sample of projects subjected to quality review. As of 2008, a total of 81projects, each with an expected overall cost of more than NOK 500 million (€ 6.2 million) in thefields of transportation infrastructure, public building, defence procurement, and informationtechnology have been subjected to studies such as this one. In this paper no attempt is made tosuggest that results may be transferable to other project types or contexts, but it is worth notingthat transportation infrastructure projects constitute a dominant part of the total number ofprojects, and that data concerning them are readily available. It should also be noted that therelatively small selection of projects presented here is not amenable to statistical tests ofconsistency and co-variation of data. On the other hand, the projects presented here are acomplete count of transportation infrastructure projects under the NPRA which as of 2008 havebeen through the project approval process. Although individual projects and their contextualsettings vary, all were planned and executed under the same regulatory and construction regime.1 The Norwegian Public Roads Administration plans, builds and operates national and county roads in the country.1