Infrastructure assessment

Introduction

Agencies tend to select projects that, once constructed, do not generate ridership levels that warrant their construction. In short, many project projects are overbuilt and a less costly alternative would satisfy the project need. The selection of capital-intensive projects contributes to cost overruns and can lead to the reputation of infrastructure projects as mismanaged, wasteful investments. A variety of political, financial, and accounting incentives support the construction of projects whose capacities far exceed demand. These incentives include political preference for large, splashy projects that generate media attention, financing structures that favor capital intensive projects, and accounting structures that inaccurately predict future benefits.

Strategies

Improve modeling

Forecasting models used to calculate future ridership levels rarely correspond with actual travel behavior. This distorts the benefits attributed to a project in cost/benefit analysis and biases decision-making in favor of projects whose full benefits will not be realized. Current modeling practices typically forecast travel patterns for a 30 year time period, making it challenging to accurately incorporate changes to local economies that affect travel patterns. Adjusting the forecast year closer to the present reduces the uncertainty of inputs that affect future travel.

Improve cost estimation

Conduct extensive engineering studies before deciding on alternative Reach out to stakeholders Use historical cost estimates as comparison Consistently measure across projects Increase cost estimate transparency