Analysis of cost estimation disclosure in environmental impact statements for surface transportation projects

Abstract

Reliability in cost estimates in publicly funded projects is more important today than ever with increased governmental funding to infrastructure projects and associated accountability requirements, but surface transportation projects, large and small, in the United States have a legacy of cost overruns. The problems with these overruns start with the cost estimation process before projects begin. Studies have shown that early cost estimations reflect best-case scenarios rather than realistic expectations, and have attributed technical, economic, psychological, and political reasons for underestimation. The primary objectives of this research were to determine how costs have been presented and updated in environmental impact statements, to identify endemic technical problems with cost estimation during the environmental review of surface transportation projects, and to develop recommendations for improving cost estimation and disclosure. Cost estimation methods were analyzed from the documents of 100 projects, including draft environmental impact statements, final environmental impact statements, and records of decision. The study concluded that the lack of guidance on how to include cost estimation in environmental review revealed itself in the level of detail and attention given to estimating costs. Agencies omitted or included various aspects of cost estimation randomly. Professional organizations should fill the gap of the need for specific guidance to cost estimation for environmental review so it can evolve as a state of the practice.