Geographical Variation in Project Cost Performance: The Netherlands versus Worldwide

TL;DR

This study compares project cost overruns in the Netherlands with worldwide data, revealing that Dutch rail and bridge projects perform significantly better, highlighting the importance of geographical factors in cost performance.

Contribution

It provides a comparative analysis of cost overruns across different regions, emphasizing the superior performance of Dutch rail and bridge projects.

Findings

Dutch rail projects have 11% cost overruns versus 44% worldwide.

Dutch bridge projects have 7% cost overruns versus 27% worldwide.

No significant difference in road and tunnel project performance.

Abstract

Cost overruns in transport infrastructure projects know no geographical limits, overruns are a global phenomenon. Nevertheless, the size of cost overruns varies with location. In the Netherlands, cost overruns appear to be smaller compared to the rest of the world. This paper tests whether Dutch projects perform significantly better in terms of cost overruns than other geographical areas. It is concluded that for road and tunnel projects, the Netherlands performs similarly to the rest of the world. For rail projects, Dutch projects perform considerably better, with projects having significantly lower percentage cost overruns in real terms (11%) compared to projects in other North West European countries (27%) and in other geographical areas (44%). Bridge projects also have considerably smaller cost overruns: 7% in the Netherlands compared with 45% in other NW European countries and 27% in other geographical areas. In explaining cost overruns, geography should therefore clearly be taken into consideration.