Cost escalations in the front-end of projects – empirical evidence from Norwegian road projects

This paper investigates an issue largely ignored in the transport literature on cost overruns, namely, cost increases in the early project phase, long before the decision to build is made. This is the phase of project planning that is referred to as the front-end phase in the literature. The rationale of the study is that unless cost estimates during the front-end phase are relatively accurate, the wrong projects may be selected for further development. We first argue for why it is important to address cost escalation during the front-end phase of project planning. We then use Norwegian data to demonstrate the magnitude of cost escalations during the front-end phase of projects and in comparison to the implementation phase. We find that even in a sample of projects with relatively small cost overruns as in the case of Norway, there are substantial cost increases before the formal decision to build was made. This raises the issue of whether decisions and priorities taken at the early stages of project development are based on false information and whether this may lead to the wrong project concepts being selected.     

Bus routing strategies in a transit market: A case study of Hong Kong

Conventionally, the objective of transit routing is often set either to minimize the total operational cost, subject to a given level of service quality, or to maximize the service quality at a given acceptable cost. In a deregulated, commercial‐based environment however, such as bus and railway operations in cities of the UK and Hong Kong where several private firms compete in route‐based or area‐based market, routing becomes one of the means for higher returns rather than just for cost saving. In such a case, how do the transit providers set up their routes for profit‐maximization? Will the routing based on the provider's objective meet the user's objective? How do government regulations and policies affect the choice of transit provider's routing strategy? To answer these questions, we first examine the relationship between the objectives of users and transit providers, set up criteria for transit routing quality, and then investigate the possible routing configurations/patterns for a hypothetical case. These criteria include (1) the load factor of transit, (2) the level of route directness, (3) the level of route overlapping, and (4) the total number of routes and (5) the average of route length. These measures are finally applied to a real case in Hong Kong to examine the route changes of Kowloon Motor Bus from 1975 to 1995. The result of the empirical case reveais how key measures such as load factor are controlled by the bus operator and affected by government policies and how the bus routing pattern was adjusted to meet users' need. Facing the dilemma as evident in Hong Kong between the route directness and the efficiency of road use, we suggest that a rational multi‐modal routing structure be put in place if an institutional solution is introduced so that bus and other transit modes can form a sharing program or an alliance.     

Optimal shipment decisions for an airfreight forwarder: Formulation and solution methods

We study the freight forwarder’s shipment planning problem in an airfreight forwarding network where a set of cargo shipments have to be transported to given destinations. We provide mixed integer programming formulations that use piecewise-linear cargo rates and account for volume and weight constraints, flight departure/arrival times, as well as shipment-ready times.After exploring the solution of such models using CPLEX, we devise two solution methodologies to handle large problem sizes. The first is based on Lagrangian relaxation, where the problems decompose into a set of knapsack problems and a set of network flow problems. The second is a local branching heuristic that combines branching ideas and local search. The two approaches show promising results in providing good quality heuristic solutions within reasonable computational times, for difficult and large shipment consolidation problems.     

Making meaningful comparisons between road and rail – substituting average energy consumption data for rail with empirical analysis

Within the transport sector, modal shift towards more efficient and less polluting modes could be a key policy goal to help meet targets to reduce energy consumption and carbon emissions. However, making comparisons between modes is not necessarily straightforward. Average energy and emissions data are often relied upon, particularly for, rail, which may not be applicable to a given context. Some UK train operating companies have recently fitted electricity metres to their trains, from which energy consumption data have been obtained. This has enabled an understanding to be gained of how energy consumption and related emissions are affected by a number of factors, including train and service type. Comparisons are made with existing data for road and rail. It is noted that although more specific data can be useful in informing policy and making some decisions, average data continue to play an important role when considering the overall picture.     

The costs and benefits of reducing SO2 emissions from ships in the US West Coastal waters

Potential costs and benefits of policy options for reducing offshore ship pollution are examined using a meta-analysis of studies synthesized regionally for the US West Coast. Net benefits of reducing SO₂ emissions from cargo ships in the US West Coast waters are found to range between $98 million and $284 million, annually; the benefit–cost ratio varies between 1.8 and 3.36, depending on the size of the control area and the sulfur content limit. The results show that about 21,000 tons of on-land equivalent SO₂ emissions or about 33% of SO₂ emissions from all mobile sources in California in 2005 can be reduced annually if the US West Coast exclusive economic zone is designated as an International Maritime Organization-compliant SO_x emission control area (SECA) with fuel-sulfur content not exceeding 1.5%. The analysis demonstrates that designating this area reduces more emissions than establishing a smaller zone at a lower but favorable benefit-cost ratio. Control measures that require 0.5% low-sulfur fuels reduce more SO₂ emissions, and also may have higher net benefits. Technological alternatives may achieve benefits of emissions reductions on the US West Coast across higher ranges of potential fuel prices. Combinations of fuel switching and control technology strategies provide the most cost-effective benefits from SECAs on the US West Coast and other world regions.     

Variation in cost overruns of transportation projects: an econometric meta-regression analysis of studies reported in the literature

Transportation - This paper uses an econometric meta-regression analysis framework to examine how the mean percentage cost overruns (MPCOs) of transportation projects reported in the literature...     

Amtrak,the attempt to renew U.S. rail service

The decline of railway passenger train patronage and the deterioration of service in the United States have led the U.S. Government to assume control over the operation of trains via a quasi‐federal corporation called “Amtrak,” but some basic causes of the decline remain and new problems will arise as a result of this action.

Two results of the neglect to assess external costs against the various transport modes is an unbalance in favor of those with the higher external costs and the continued, seemingly fundamental, unprofitability of railway passenger service, which exists even for equipment that operates at capacity!

Some way of collecting external costs will have to be found, and the problems created by the new intrusion of the U.S. Government into transport will have to be faced.     

Impact of offshore oil and gas development on the coastal zone: Reforming the impact assessment process

In an otherwise complex regulatory system, the federal Environmental Impact Statement process affords local decision makers and coastal zone residents a rare opportunity to analyze the comprehensive range of land‐use and environmental issues that may arise from Offshore Continental Shelf (OCS) hydrocarbon development, while there is still time to formulate effective management strategies. As exemplified by the lease sale 40 statements, present onshore impact assessment procedures are sufficiently flawed to seriously compromise this goal. Critical deficiencies include failure to emphasize onshore impacts; insensitivity to spatial variations of impact; neglect of available data; rigid, unsupported assumptions; and preoccupation with short‐trm effects to the exclusion of more significant and dependent long‐term consequences. Suggested reforms include preparation of separate exploration and development impact statements; establishment of special Council on Environmental Quality review procedures; modification of the judicial review process; and provision of additional support to local onshore OCS impact areas.