Cost overruns of Belgian transport infrastructure projects: Analyzing variations over three land transport modes and two project phases

Abstract

Transport infrastructure agencies are increasingly coping with strong budget constraints, while being highly under pressure to manage and upgrade an infrastructure network that meets the increasing service level expectations of all its stakeholders. Sound infrastructure management therefore includes tight cost control, a long-term vision and budget planning. Belgium has long been structurally underinvesting in infrastructure, but is in recent years trying to clear the backlog. However, it seems that cost overruns for transport investment projects – paid by the same budget as structural maintenance projects – may seriously reduce the number of critical projects to be carried out in the next years, delaying the necessary catching up process as compared to neighboring countries’ state of infrastructure (in the Netherlands, the UK, and Germany). This study analyzes quantitatively the cost developments, from the first publicly released estimates to the final execution costs, of 36 Belgian railway, road and inland waterway projects, representing a total final value of € 1,059,754,416.37 in 2020 prices, or approximately almost 10% of all transport infrastructure investments (in % of CAPEX) in Belgium during the last two decades is captured in our sample. We obtain results on the cost variation itself, and on the phase of the project in which the deviation is higher. We also investigate the transport mode as the independent variable. We find that overruns are higher in the project stage before contract awarding, and that cost overruns for road projects exceed those of rail or inland navigation projects. This case-based quantitative analysis, together with the variables researched in the case analysis, will enable Belgian governing bodies and transport agencies, separately responsible for one mode per region, to learn from these deviations, and to prioritize the need to further explore causes and develop solutions.