Cost overruns and the proposed Panay-Guimaras-Negros inter-island bridge project, Philippines

• Main Authors: Roxas, Nicanor R., Jr., Fillone, Alexis M., Chalermpong, Saksith
• Format: text
• Published: Animo Repository 2015
• Subjects: Public works > Evaluation; Bridges—Design and construction > Philippines; Construction projects > Philippines—Evaluation; Construction projects > Philippines—Cost effectiveness; Engineering
• Online Access: https://animorepository.dlsu.edu.ph/faculty_research/11377
• Institution: De La Salle University

Studies have shown that mega transportation infrastructure projects underperform when actual cost and benefits are compared to forecasts utilized in the project proposals. The projected costs have been shown to be commonly underestimated. In this research, a database of transportation projects from the Philippines was assembled to look into the distribution of cost forecast inaccuracies. An ambitious project in the Western Visayas Region is assessed. The Panay-Guimaras-Negros (PGN) Bridge Project intends to connect Panay, Guimaras, and Negros islands via inter-island bridges that span approximately 23 km. In this study, the PGN project is contrasted against previously completed projects and lessons drawn from their experience. Moreover, the Reference Class Forecasting (RCF), as devised by Flyvbjerg, is tackled to improve risk assessment in transportation infrastructure project proposals. if the proposed PGN proposal were placed in the distribution of completed projects based on the databases established, 23% to 55% cost escalation is to be expected when considering 20% risk of cost overrun. This translates to 25% to approximately 33% allotment from the total national public works budget to the proposal. Since the Philippines does not have the recipe for success for this kind of project , caution should be exercised in handling this proposal.