IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i21p14608-d965287.html
   My bibliography  Save this article

Cost Underruns in Major Road Transport Infrastructure Projects—The Surprising Experience of Poland

Author

Listed:
  • Bartlomiej Rokicki

    (Faculty of Economic Sciences, University of Warsaw, Dluga 44/50, 00-241 Warsaw, Poland)

Abstract

This paper investigates the reasons behind the surprising cost performance of road construction projects in Poland. In particular, in order to explain the phenomenon of cost underruns, the role of regulations related to the national and the European Union structural investment funding is verified. It is shown that in Poland there exist two different institutional frameworks related to infrastructure investment projects. However, in the case of road transport infrastructure investment, the public investor does not discriminate between the sources of funding and follows the optimal strategy for the EU co-funded projects. This, in turn, leads to the emergence of cost underruns.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:21:p:14608-:d:965287
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/21/14608/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/21/14608/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fazekas, Mihály & Tóth, Bence, 2018. "The extent and cost of corruption in transport infrastructure. New evidence from Europe," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 35-54.
    2. Cantarelli, C.C. & Molin, E.J.E. & van Wee, B. & Flyvbjerg, B., 2012. "Characteristics of cost overruns for Dutch transport infrastructure projects and the importance of the decision to build and project phases," Transport Policy, Elsevier, vol. 22(C), pages 49-56.
    3. Gregory Lewis & Patrick Bajari, 2011. "Procurement Contracting With Time Incentives: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1173-1211.
    4. Marina Cavalieri & Rossana Cristaudo & Calogero Guccio, 2019. "Tales on the dark side of the transport infrastructure provision: a systematic literature review of the determinants of cost overruns," Transport Reviews, Taylor & Francis Journals, vol. 39(6), pages 774-794, November.
    5. 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.
    6. Marion, Justin, 2007. "Are bid preferences benign? The effect of small business subsidies in highway procurement auctions," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1591-1624, August.
    7. Odeck, James, 2014. "Do reforms reduce the magnitudes of cost overruns in road projects? Statistical evidence from Norway," Transportation Research Part A: Policy and Practice, Elsevier, vol. 65(C), pages 68-79.
    8. Bruzelius, Nils & Flyvbjerg, Bent & Rothengatter, Werner, 2002. "Big decisions, big risks. Improving accountability in mega projects," Transport Policy, Elsevier, vol. 9(2), pages 143-154, April.
    9. C. Guccio & G. Pignataro & I. Rizzo, 2012. "Determinants of adaptation costs in procurement: an empirical estimation on Italian public works contracts," Applied Economics, Taylor & Francis Journals, vol. 44(15), pages 1891-1909, May.
    10. Catalão, Francisco Pinheiro & Cruz, Carlos Oliveira & Sarmento, Joaquim Miranda, 2019. "The determinants of cost deviations and overruns in transport projects, an endogenous models approach," Transport Policy, Elsevier, vol. 74(C), pages 224-238.
    11. Bent Flyvbjerg, 2007. "Policy and Planning for Large-Infrastructure Projects: Problems, Causes, Cures," Environment and Planning B, , vol. 34(4), pages 578-597, August.
    12. Atsushi Iimi, 2013. "Testing Low-Balling Strategy in Rural Road Procurement," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 43(3), pages 243-261, November.
    13. Rosik, Piotr & Stępniak, Marcin & Komornicki, Tomasz, 2015. "The decade of the big push to roads in Poland: Impact on improvement in accessibility and territorial cohesion from a policy perspective," Transport Policy, Elsevier, vol. 37(C), pages 134-146.
    14. 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.
    15. Dejan Makovšek & Marian Moszoro, 2018. "Risk pricing inefficiency in public–private partnerships," Transport Reviews, Taylor & Francis Journals, vol. 38(3), pages 298-321, May.
    16. 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.
    17. Frédéric Blanc-Brude & Hugh Goldsmith & Timo Välilä, 2009. "A Comparison of Construction Contract Prices for Traditionally Procured Roads and Public–Private Partnerships," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(1), pages 19-40, September.
    18. Rokicki, Bartlomiej & Stępniak, Marcin, 2018. "Major transport infrastructure investment and regional economic development – An accessibility-based approach," Journal of Transport Geography, Elsevier, vol. 72(C), pages 36-49.
    19. Bent Flyvbjerg, 2014. "What You Should Know About Megaprojects, and Why: An Overview," Papers 1409.0003, arXiv.org.
    20. Konrad Nübel & Michael Max Bühler & Thorsten Jelinek, 2021. "Federated Digital Platforms: Value Chain Integration for Sustainable Infrastructure Planning and Delivery," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    21. Patrick Bajari & Stephanie Houghton & Steven Tadelis, 2014. "Bidding for Incomplete Contracts: An Empirical Analysis of Adaptation Costs," American Economic Review, American Economic Association, vol. 104(4), pages 1288-1319, April.
    22. Lionel Thomas, 2019. "Optimal Procurement Contract with Cost Overruns," Annals of Economics and Statistics, GENES, issue 133, pages 109-126.
    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. Karel Ječmen & Denisa Mocková & Dušan Teichmann, 2024. "Solving Transport Infrastructure Investment Project Selection and Scheduling Using Genetic Algorithms," Mathematics, MDPI, vol. 12(19), pages 1-28, September.
    2. Tomasz Komornicki & Sławomir Goliszek, 2023. "New Transport Infrastructure and Regional Development of Central and Eastern Europe," Sustainability, MDPI, vol. 15(6), pages 1-24, March.

    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. Abeysekara, Baudhi & Perera, Piyaruwan & Chhipi Shrestha, Gyan Kumar & Gunaruwan, Lalithasiri & Kumarage, Amal & Sadiq, Rehan & Hewage, Kasun, 2021. "Improving the capital deployment efficiency: An infrastructure investment planning process in transportation project," Research in Transportation Economics, Elsevier, vol. 88(C).
    2. 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.
    3. Love, Peter E.D. & Ika, Lavagnon A. & Ahiaga-Dagbui, Dominic D., 2019. "On de-bunking ‘fake news’ in a post truth era: Why does the Planning Fallacy explanation for cost overruns fall short?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 126(C), pages 397-408.
    4. Bartlomiej Rokicki & Krzysztof Ostaszewski, 2022. "Actuarial Credibility Approach in Adjusting Initial Cost Estimates of Transport Infrastructure Projects," Sustainability, MDPI, vol. 14(20), pages 1-12, October.
    5. Nadia Fiorino & Emma Galli & Ilde Rizzo & Marco Valente, 2023. "Public procurement and reputation. An agent‐based model," Metroeconomica, Wiley Blackwell, vol. 74(4), pages 806-832, November.
    6. Hatsumi, Kentaro & Ishii, Rieko, 2022. "The effect of price on the quality of public construction in Japan," Japan and the World Economy, Elsevier, vol. 62(C).
    7. Laura Rondi & Paola Valbonesi, 2017. "Pre- and post-award outsourcing: Temporary partnership versus subcontracting in public procurement," "Marco Fanno" Working Papers 0211, Dipartimento di Scienze Economiche "Marco Fanno".
    8. Chong, Uven & Hopkins, Omar, 2016. "An international experience on the evolution of road costs during the project life cycle," Transport Policy, Elsevier, vol. 48(C), pages 60-66.
    9. Wenzheng Gao & Daiqiang Zhang & Naibao Zhao, 2021. "Uncertainty In Procurement Contracting With Time Incentives," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(3), pages 1153-1197, August.
    10. Leonardo M. Giuffrida & Gabriele Rovigatti, 2017. "Can the Private Sector Ensure the Public Interest? Evidence from Federal Procurement," CEIS Research Paper 411, Tor Vergata University, CEIS, revised 20 Jul 2017.
    11. Eliasson, Jonas, 2024. "Cost overruns of infrastructure projects – distributions, causes and remedies," MPRA Paper 122862, University Library of Munich, Germany.
    12. Locatelli, Giorgio & Invernizzi, Diletta Colette & Brookes, Naomi J., 2017. "Project characteristics and performance in Europe: An empirical analysis for large transport infrastructure projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 98(C), pages 108-122.
    13. Flyvbjerg, Bent & Ansar, Atif & Budzier, Alexander & Buhl, Søren & Cantarelli, Chantal & Garbuio, Massimo & Glenting, Carsten & Holm, Mette Skamris & Lovallo, Dan & Lunn, Daniel & Molin, Eric & Rønnes, 2018. "Five things you should know about cost overrun," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 174-190.
    14. Marina Cavalieri & Calogero Guccio & Domenico Lisi & Ilde Rizzo, 2020. "Does Institutional Quality Matter for Infrastructure Provision? A Non-parametric Analysis for Italian Municipalities," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(3), pages 521-562, November.
    15. Andrius Montrimas & Jurgita Bruneckienė & Vaidas Gaidelys, 2021. "Beyond the Socio-Economic Impact of Transport Megaprojects," Sustainability, MDPI, vol. 13(15), pages 1-29, July.
    16. Cavalieri, Marina & Cristaudo, Rossana & Guccio, Calogero, 2019. "On the magnitude of cost overruns throughout the project life-cycle: An assessment for the Italian transport infrastructure projects," Transport Policy, Elsevier, vol. 79(C), pages 21-36.
    17. Francisco Pinheiro Catalão & Carlos Oliveira Cruz & Joaquim Miranda Sarmento, 2023. "The entanglement of time and cost deviations in public projects," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(1), pages 241-272, March.
    18. Calogero Guccio & Giacomo Pignataro & Ilde Rizzo, 2014. "Evaluating the efficiency of public procurement contracts for cultural heritage conservation works in Italy," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(1), pages 43-70, February.
    19. Ari Hyytinen & Sofia Lundberg & Otto Toivanen, 2018. "Design of public procurement auctions: evidence from cleaning contracts," RAND Journal of Economics, RAND Corporation, vol. 49(2), pages 398-426, June.
    20. Ram Singh, 2018. "Public–private partnerships vs. traditional contracts for highways," Indian Economic Review, Springer, vol. 53(1), pages 29-63, December.

    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:gam:jsusta:v:14:y:2022:i:21:p:14608-:d:965287. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.