Cost Overrun in Swedish Infrastructure Transport Projects : An Analysis of Cost Overrun in Swedish Infratructure Transport Projects between 2010-2022

Abstract: Cost Overrun is something that plagues infrastructure projects, both in Sweden and globally. The repercussion of it can be severe since it not only hurts the public’s perception of how the public authorities manage and allocates its resources, but also due to the immense opportunity costs that arise when the increased costs need to be covered. In general, the factors that lead to cost overrun in infrastructure transport projects can often be derived from technical, psychological, political, and economical factors, and it is not uncommon that there is a combination of these factors, which is why the subject of cost overrun is so complex. With a highly unique dataset, this paper examines cost overrun in Swedish infrastructure transport projects to see if there is a statistical relationship between cost overrun and the size of a project, its regional location, and whether it is a road- or railway project. Furthermore, an evaluation of the process of estimating and forecasting costs will be conducted. The results shows that the characteristics of regional locations have a significant relationship with projects experiencing cost overrun and that cost overrun is more common in smaller projects. There were no significant differences in cost overrun between types of projects, but it was found that between the period 2018 to 2022, cost estimates had been underestimated by approximately 34%.