Accuracy of Traffic Forecasts and Cost Estimates on Large Transportation Projects

Abstract

Little research has been carried out on before-and-after studies of traffic and construction costs in large transportation infrastructure projects. The few studies that do exist show that forecasts of construction costs tend to be underestimated and those of traffic, overestimated. An examination of construction costs and traffic in seven large Danish bridge and tunnel projects indicates that, on average, construction costs were underestimated and traffic was overestimated in the initial phases of planning. This pattern is also found for similar projects in other countries. When the results of all the projects are pooled, it is seen that cost overruns of 50 to 100 percent are common and that overruns above 100 percent are not uncommon. Traffic forecasts that are off by 20 to 60 percent when compared with actual development are frequent in large transportation infrastructure projects. The result of this overoptimism in the initial planning phases is that decisions are based on misleading forecasts that may lead to a misallocation of funds and underperforming projects.