IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v100y2017icp27-39.html
   My bibliography  Save this article

Light rail transit cost performance: Opportunities for future-proofing

Author

Listed:
  • Love, Peter E.D.
  • Ahiaga-Dagbui, Dominic
  • Welde, Morten
  • Odeck, James

Abstract

The cost performance of Light Rail Transit (LRT) systems have been scrutinized by the popular press and public sector infrastructure agencies as they have been prone to incurring cost increases in their capital expenditures (CAPEX). In tackling such increases, emphasis is placed on mitigating strategic misrepresentation and optimism bias, which has hindered the public sectors ability to embrace innovation, particularly with regard to the justification and adoption of LRT. More often than not, operational expenditure (OPEX) is neglected, and is not considered a part of the transportation cost performance literature. The aim of this paper is to examine the equivocality that surrounds the determination of cost performance of LRT projects. It is suggested that the public sector should move beyond focusing on strategic misrepresentation and optimism bias, as many governments worldwide now have in place mechanisms to address such issues, and instead focus on future-proofing their assets. It is suggested that the key enablers of future-proofing LRT are (1) private finance; (2) delivery strategy (e.g. design-build-finance-operate); (3) digitization (e.g. building information modelling); and (4) asset management (e.g. smart technologies). If the public sector is to provide an LRT system that is cost effective and able to respond to the demands imposed by climate change, then it needs to be considered from a life-cycle perspective and funding sought from the private sector to ensure its viability.

Suggested Citation

  • Love, Peter E.D. & Ahiaga-Dagbui, Dominic & Welde, Morten & Odeck, James, 2017. "Light rail transit cost performance: Opportunities for future-proofing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 27-39.
    • Handle: RePEc:eee:transa:v:100:y:2017:i:c:p:27-39
    DOI: 10.1016/j.tra.2017.04.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S096585641730191X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2017.04.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Michael Regan & Jim Smith & Peter Love, 2011. "Infrastructure Procurement: Learning from Private–Public Partnership Experiences ‘Down Under’," Environment and Planning C, , vol. 29(2), pages 363-378, April.
    2. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    3. Love, Peter E.D. & Ahiaga-Dagbui, Dominic D. & Irani, Zahir, 2016. "Cost overruns in transportation infrastructure projects: Sowing the seeds for a probabilistic theory of causation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 184-194.
    4. David A. Hensher, 2016. "Why is Light Rail Starting to Dominate Bus Rapid Transit Yet Again?," Transport Reviews, Taylor & Francis Journals, vol. 36(3), pages 289-292, May.
    5. Love, Peter E.D. & Zhou, Jingyang & Edwards, David J. & Irani, Zahir & Sing, Chun-Pong, 2017. "Off the rails: The cost performance of infrastructure rail projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 99(C), pages 14-29.
    6. Bent Flyvbjerg, 2014. "What You Should Know About Megaprojects, and Why: An Overview," Papers 1409.0003, arXiv.org.
    7. Michael Regan, 2017. "Capital Markets, Infrastructure Investment and Growth in the Asia Pacific Region," IJFS, MDPI, vol. 5(1), pages 1-28, February.
    8. Hensher, David A. & Ho, Chinh & Mulley, Corinne, 2015. "Identifying resident preferences for bus-based and rail-based investments as a complementary buy in perspective to inform project planning prioritisation," Journal of Transport Geography, Elsevier, vol. 46(C), pages 1-9.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Xinjian & Love, Peter E.D. & Luo, Hanbin & Fang, Weili, 2022. "A systemic model for implementing land value capture to support urban rail transit infrastructure projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 156(C), pages 90-112.
    2. Christiono Utomo & Sulfiah Dwi Astarini & Dewa Made Satriya Wibawa Mertha & Yani Rahmawati & Aqsha & Cahyono Bintang Nurcahyo & Maulita Nahdiyah, 2022. "Decision Factors of Stakeholder Integration in Connected Construction for Circular Economics," Sustainability, MDPI, vol. 14(23), pages 1-18, December.
    3. Savindi Caldera & Sherif Mostafa & Cheryl Desha & Sherif Mohamed, 2021. "Exploring the Role of Digital Infrastructure Asset Management Tools for Resilient Linear Infrastructure Outcomes in Cities and Towns: A Systematic Literature Review," Sustainability, MDPI, vol. 13(21), pages 1-25, October.
    4. Zhao, Jianfeng & Liu, Henry J. & Love, Peter E.D. & Greenwood, David J. & Sing, Michael C.P., 2022. "Public-private partnerships: A dynamic discrete choice model for road projects," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    5. Love, Peter E.D. & Ika, Lavagnon A. & Matthews, Jane & Li, Xinjian & Fang, Weili, 2021. "A procurement policy-making pathway to future-proof large-scale transport infrastructure assets," Research in Transportation Economics, Elsevier, vol. 90(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Coilín ÓhAiseadha & Gerré Quinn & Ronan Connolly & Michael Connolly & Willie Soon, 2020. "Energy and Climate Policy—An Evaluation of Global Climate Change Expenditure 2011–2018," Energies, MDPI, vol. 13(18), pages 1-49, September.
    2. Jorge Fleta‐Asín & Fernando Muñoz, 2021. "Renewable energy public–private partnerships in developing countries: Determinants of private investment," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(4), pages 653-670, July.
    3. Ademola E. Ojo & Ditimi Amassoma, 2021. "Infrastructures Development, Environmental Quality and Economic Growth in Nigeria," Journal of Infrastructure Development, India Development Foundation, vol. 13(2), pages 129-144, December.
    4. Love, Peter E.D. & Ahiaga-Dagbui, Dominic D., 2018. "Debunking fake news in a post-truth era: The plausible untruths of cost underestimation in transport infrastructure projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 357-368.
    5. Bartlomiej Rokicki, 2022. "Cost Underruns in Major Road Transport Infrastructure Projects—The Surprising Experience of Poland," Sustainability, MDPI, vol. 14(21), pages 1-18, November.
    6. Love, Peter E.D. & Sing, Michael C.P. & Ika, Lavagnon A. & Newton, Sidney, 2019. "The cost performance of transportation projects: The fallacy of the Planning Fallacy account," Transportation Research Part A: Policy and Practice, Elsevier, vol. 122(C), pages 1-20.
    7. Dejan Makovšek & Adrian Bridge, 2021. "Procurement Choices and Infrastructure Costs," NBER Chapters, in: Economic Analysis and Infrastructure Investment, pages 277-327, National Bureau of Economic Research, Inc.
    8. Temitope Seun Omotayo & Bankole Awuzie & Valerie Kenechukwu Obi & Saheed Ajayi & Lovelin Ifeoma Obi & Oluyomi Osobajo & Adekunle Oke, 2022. "The System Dynamics Analysis of Cost Overrun Causations in UK Rail Projects in a COVID-19 Epidemic Era," SAGE Open, , vol. 12(2), pages 21582440221, May.
    9. Han, Shaojie & Su, Jingqin & Lyu, Yibo & Liu, Qing, 2022. "How do business incubators govern incubation relationships with different new ventures?," Technovation, Elsevier, vol. 116(C).
    10. Diane Coyle & Marianne Sensier, 2020. "The imperial treasury: appraisal methodology and regional economic performance in the UK," Regional Studies, Taylor & Francis Journals, vol. 54(3), pages 283-295, March.
    11. Mariani, Marcello M. & Fosso Wamba, Samuel, 2020. "Exploring how consumer goods companies innovate in the digital age: The role of big data analytics companies," Journal of Business Research, Elsevier, vol. 121(C), pages 338-352.
    12. Schreiner, Lena & Madlener, Reinhard, 2022. "Investing in power grid infrastructure as a flexibility option: A DSGE assessment for Germany," Energy Economics, Elsevier, vol. 107(C).
    13. Pietro Cunha Dolci & Antonio Carlos Gastaud Maçada, 2014. "Information technology investments and supply chain governance," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 18(2), pages 217-235.
    14. Junyon Im & Sunny Sun, 2015. "Profits and outreach to the poor: The institutional logics of microfinance institutions," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 95-117, March.
    15. Jonathan H. Reed, 2022. "Operational and strategic change during temporary turbulence: evidence from the COVID-19 pandemic," Operations Management Research, Springer, vol. 15(1), pages 589-608, June.
    16. Ariño, Africa & Reuer, Jeffrey J., 2004. "Alliance contractual design," IESE Research Papers D/572, IESE Business School.
    17. Peter G. Klein & Michael E. Sykuta, 2010. "Editors’ Introduction," Chapters, in: Peter G. Klein & Michael E. Sykuta (ed.), The Elgar Companion to Transaction Cost Economics, chapter 1, Edward Elgar Publishing.
    18. Hoontaek Seo & Sangho Yi & William McCumber, 2024. "Friendly Boards and the Cost of Debt," JRFM, MDPI, vol. 17(7), pages 1-17, July.
    19. Robert S. Gibbons & Manuel Grieder & Holger Herz & Christian Zehnder, 2019. "Building an Equilibrium: Rules Versus Principles in Relational Contracts," CESifo Working Paper Series 7871, CESifo.
    20. Stefano Ciliberti & Simone Del Sarto & Angelo Frascarelli & Giulia Pastorelli & Gaetano Martino, 2020. "Contracts to Govern the Transition towards Sustainable Production: Evidence from a Discrete Choice Analysis in the Durum Wheat Sector in Italy," Sustainability, MDPI, vol. 12(22), pages 1-14, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:100:y:2017:i:c:p:27-39. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.