The Causes for Cost Overruns in Infrastructure Projects

Abstract: This thesis analyzes the underlying reasons for cost overruns in Trackside signalling projects at Bombardier Transportation focusing specifically on man-hours. Despite the increasing public, political and academic interest in the issue of cost overruns in infrastructure projects during the past decades, limitations related to data access have made it difficult to shed light on the prevalence and causes of cost overruns. Thus, this paper uses quantitative and qualitative data to provide real-life insights into the causes leading up to cost overrun through a case study. This thesis finds that cost overrun is positively corelated with the project duration and occurs mostly during the early phase of a project. Additionally, I analyzed eight projects and interviewed twenty-five stakeholders to identify the main reasons for cost overrun, these being "unstable, incomplete, or incorrect input from clients," "scope changes" and "lack of experience".