Abstract
Socio-economic development is often linked to efficient infrastructure provision. In China, the government has rolled out ambitious infrastructure projects as part of its national development strategy. There is much to praise about China’s infrastructure provision, such as its remarkable scale and speed of infrastructure delivery. However, based on studying 153 infrastructure cases between 1983 and 2018 and two in-depth case studies, we find that China’s infrastructure performance is not as positive as often assumed. We show that infrastructure projects continuously arrive significantly over budget. We argue that this cost performance depends – similar to Western countries – on inaccurately anticipating technical hindrances and geographical challenges. In addition, however, we identify another important and so far less discussed project performance determinant specifically relevant to the Chinese context: population resettlements and land acquisition.
Highlights
Socio-e conomic development is often linked to efficient infrastructure provision
We find that resettlements and land acquisition (RLA) cost overruns amount to 21 per cent of China’s total cost overruns in infrastructure provision, and they impact final project costs across sectors, while being especially high for hydropower (100 per cent cost overruns in RLA on average) and railway projects (93 per cent cost overruns in RLA on average)
We illustrated the determinants for economic cost performance of infrastructure projects in China
Summary
Infrastructure projects around the world often arrive over budget and are often delivered late (Flyvbjerg et al, 2009: 171–172). Reasons as to why final project costs become higher than the initially planned expenses have been widely discussed in academic literature, and research has identified multiple determinants. Most prominently, those reasons include increasing complexity with multiple stakeholders (Sovacool and Cooper, 2013), underestimations of risks (Kahneman and Tversky, 1979), insufficient risk management during project implementation (Rothengatter, 2017), and strategic deception in the form of purposeful cost underestimations to outbid competing offers (Flyvbjerg, 2008). Much research has already been conducted on project performance determinants, it becomes clear from examination of this research that the canon of “international best practices” in infrastructure governance and sustainable infrastructure provision is still based on findings from industrialised and democratic Western contexts (Haber, 2016; Mueller et al, 2016)
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