In the mid-twentieth century, a single public official, namely Robert Moses, was responsible for building more of New York State’s public works, including bridges, than anyone else in the state’s history. According to his biographer, he would often underestimate a project’s costs to get the state legislature to approve it, but once construction was underway and running out of money, would put the legislators over a barrel—force them to appropriate more funds to escape blame for an unfinished project. To this day, around the world, major projects, especially vast “megaprojects,” typically run late and exceed initially estimated costs.
This phenomenon has prompted the speculative hypothesis that those who initially push for the project (and the private parties that benefit from building the project) purposefully underestimate costs. Allegedly, they do so out of personal enthusiasm for projects or because of political or economic pressure, though the channels of this alleged influence on cost estimators remains elusive. While we do not have the evidence by which to fully judge this or other explanations for project overruns, we can say, with a view to the modern-day US delivery process we have described, that this hypothesis is not plausible.
The many varied professionals who estimate project costs, at stages from project initiation through the PS&E, and for various subsets of a proj- ect, do not have the incentive to be wrong in their estimates. They have no obvious motive for dishonesty—the estimators gain no eventual benefit from cost overruns or delays. Nor do the public officials who oversee decisions at each stage have a clear motive to underestimate costs. In some respects they are under the contrary motive. Transportation improvement programs impose fiscal constraint. Projects that go over budget eventually subtract from the sum total of projects that can be funded. In modern US proj- ect development, officials who want regional projects to move through the approval procedure should, in terms of incentives they face, want projects correctly estimated, so that other favored projects are not later subtracted from the bottom of the list.
A second hypothesis refers to the standard procurement method, in which design is separated from construction: state entities design the bridge and then, after a bidding process, a private entity constructs it. The hypothesis is that this separation creates dissonance between design and construction, causing overruns and delays. The solution often proposed is the design-build procedure (which has several variations). In this scenario,
a private firm (or joint venture) is contracted for both design and con- struction. Potentially, there are great advantages. The company knows its particular capabilities in construction and can better align design with con- struction practice. Since the company is responsible for both designing and building the bridge, it has a powerful incentive to design carefully enough in early stages to avoid construction-stage change orders that it would have to charge to itself. In some cases, construction on some parts of the project can begin even before detailed design is complete, shortening the duration of the project.
Design-build as an infrastructure delivery method was common in the United States a century ago, especially during the canal era. It is again in use in many states, with varied claims on efficacy. Each large project is complex and unique; it may be that conventional bid-based delivery is more adapted to some projects, and design-build to others, but we do not know which method works better under which conditions. The evidence must still be collected. What is clear to us, though, is that design-build cannot cut short the complex process we have described. The private design-build firm and accompanying public authorities must still carry out the environmen- tal reviews, public hearings, repeat studies, right-of-way acquisitions, utility relocations, and permits that slow the project’s pace.
Still another hypothesis is that costs escalate and delays occur because of technical errors in estimation. Put baldly in this way, the hypothesis seems unreasonable: it would seem that errors could run in either direction.
In response to erroneous estimates, major projects should be as likely to be underbudget and fast-paced as overbudget and slow.
A better way to state this hypothesis is that estimates are subject to uncertainty. There are uncertainties in interagency relations (how fast a utility responds to a relocation request), environmental processes (subsur- face soil conditions encountered during construction), and community views (how adamantly a group seeks to save farmhouses from the wrecking ball), among many other project features. The more complex the project, the greater the number of uncertainties faced during estimation. And the more the project is assessed based on its systems of consequences (its linkages to environmental effects), the greater the number of cascading downstream system effects that an unexpected problem (such as soil slides) can set off.
But this explanation, too, is speculation on our part, and should be sub- jected to research.
The fourth and final hypothesis is the obvious one: that complex rules and procedures have slowed down projects. Ever more elaborate expectations placed on projects increase the likelihood that disruptive problems will be found. That leads us to the most difficult question: are all the rules and procedures necessary for achieving the environmentally protective purpose?
If a need is obvious from the start (the need to replace the old Kos- ciuszko Bridge), why should it be necessary to study the need in depth? If it is inevitable that the bridge will have to be replaced, why hold up scoping and detailed design for environmental agreements (to build a boat launch) that can be left for a later stage in the process? Should all activist groups that find fault with a project be given equal power to slow down a project that has broad public benefit, or do some groups have more legitimacy than others?
These are difficult questions, ones we cannot come close to answering here. What we do know is that, in the United States, for bridge projects as for other kinds of public works, project delivery is the greatest single challenge. To continue to meet the nation’s infrastructure needs, policy makers, planners and engineers will have to learn how to deliver projects more cost-effectively and faster.
Sources and Further Reading
On the rise of opposition to highway projects, see Raymond A. Mohl, “Stop the Road: Freeway Revolts in American Cities,” Journal of Urban History, 30: 2004, 674–706. For more on NEPA and subsequent legislation, check the website of the President’s Council on Environmental Quality at http://
ceq.hss.doe.gov/welcome.html. Information on New York State’s stages for managing a transportation development project is in the “Project Devel- opment Manual,” found on the state DoT’s website. On the Kosciuszko Bridge we also consulted environmental impact documents and benefited from a fine 2012 Columbia University master’s thesis in urban planning,
“Why Transportation Mega-Projects (Often) Fail,” by Victor S. Teglasi. On project delivery methods, the basic source is John B. Miller, Principles of Public and Private Infrastructure Delivery (Kluwer Academic, 2000); also see more recent articles on the subject by Michael J. Garvin, who also cites extensive additional literature. Regarding the problem of cost-overruns, Bent Flyvbjerg and colleagues report on a multinational study of megaprojects in “Underestimating Costs in Public Works Projects: Error or Lie?” Journal of the American Planning Association, 68:3, 2002, 279–295, in which they speculate that estimators purposefully mislead—we take a dissenting view in this chapter. Other recent findings on the matter are in Matti Siemiatycki,
“Academics and Auditors: Comparing Perspectives on Transportation Proj- ect Cost Overruns,” Journal of Planning Education and Research 29:1, 2009, 142–156; and in Joseph Sturm and colleagues’ “Analysis of Cost Estimation Disclosure in Environmental Impact Statement for Surface Transportation Projects,” Transportation 38, 2011, 525–544.