Does Norway have the best cost control in road and fixed links projects? : comparative research of cost performance in Northern and Western Europe

Abstract

The comparative research of national studies across Northern and Western Europe shows the high level of cost performance for Norwegian Public Road Administration. The superior results are observed across the international samples of infrastructure projects. The average cost overrun for road and fixed links projects is estimated as of 11.5% with relatively average spread. However, the cost performance varies greatly for different project groups. The large projects over NOK 200 million show the best estimation accuracy with mean overrun of 4.9% and lowest standard deviation. Smaller projects have worst cost performance with highest cost overrun of 13.0%. The similar cost situation is observed in case of time overruns. The cost overrun also changes over time periods due to reorganizations of NPRA. The reforms positively affect the cost overrun for large projects but worsen the cost performance of small and medium projects greatly. The explanations for such great cost performance are high level of transparency, advanced estimation practices, prioritizing the social benefits, thus avoiding public pressure, involvement of private organizations intro procurement and adopted practices for managing the strategic misrepresentation and optimism bias.