- Cost underestimation cannot be explained by error and seems to be best explained by strategic misrepresentation, i.e., lying.
Related to Len's previous post is this article, also from JAPA, which came out a few years ago. It too documents the gap between promises made and promises delivered in transportation projects. In this case the focus is cost forecasting, and, once again, that familiar pattern holds: All transportation projects were prone to cost escalation, but rail's escalations were most dramatic. For example, in North America, the average cost escalation for road projects was 8 percent, for rail projects it was 41 percent. Why does this keep happening? According to the authors: