The Impact of External Quality Assurance on Cost Overruns of Road Projects

The authors examine the impact of government intervention to reduce the magnitude of cost overruns of road projects in Norway. Due to observed large cost overruns of public projects over the years, the Norwegian government implemented a quality assurance (QA) regime for cost estimates above 80 million US dollars in the year 2000. Under the QA regime, the cost estimates of projects made by public authorities are scrutinized by external consultants chosen by the Ministry of Finance to assure the accuracy of estimates. The consultants provide alternative estimates. The authors use statistical tools to examine and compare the magnitude of overruns among projects that fulfill QA criteria before and after the QA were implemented. The results reveal that: (i) quality assurance led to a significant reduction in cost overruns; (ii) quality assurance has not, however, led to improved accuracy of the estimates provided by the authorities; rather, it has led to systematic overestimation by the road authorities; and (iii) external consultants are more accurate than the authorities. The authors conclude that the QA regime is achieving the objectives of reducing cost overruns and that perhaps similar regimes should be considered for smaller projects where overruns have been shown to be still very large.

• Record URL:
  • https://proceedings-seoul2015.piarc.org/ressources/files/2/IP0760-Odeck-E.pdf
• Availability:
  • Find a library where document is available. Order URL: https://www.piarc.org/en/order-library/25346-en-Proceedings%20of%20the%20XXVth%20World%20Road%20Congress%20-%20Seoul.htm
• Supplemental Notes:
  • Abstract reprinted with permission of the World Road Association – PIARC.
• Corporate Authors:

  World Road Association (PIARC)

  La Grande Arche, Paroi Nord, Niveau 5
  F-92055 La Defense Cedex,   France 
• Authors:
  • Odeck, J
  • Welde, M
• Conference:
  • 25th World Road Congress
  • Location: Seoul , Korea, South
  • Date: 2015-11-3 to 2015-11-7
• Publication Date: 2015

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References; Tables;
• Pagination: 17p
• Monograph Title: Proceedings of the 25th World Road Congress - Seoul 2015: Roads and Mobility - Creating New Value from Transport

Subject/Index Terms

• TRT Terms: Auditing; Construction projects; Cost estimating; Cost overruns; Quality assurance; Road construction
• Uncontrolled Terms: Interventions
• Geographic Terms: Norway
• Subject Areas: Administration and Management; Economics; Finance; Highways;

Filing Info

• Accession Number: 01670596
• Record Type: Publication
• ISBN: 9782840604235
• Report/Paper Numbers: 0760
• Files: TRIS
• Created Date: May 29 2018 4:02PM