Transport Policy 75 (2019) A1–A15

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Transport Policy
journal homepage: www.elsevier.com/locate/tranpol

Invited Research Paper

Megaprojects in transportation networks T

Werner Rothengatter
Karlsruhe Institute of Technology, Germany

ABSTRACT

Megaprojects are characterized by large investment volumes, high complexity and ambitious goals of their promoters with respect to technological, economic or
aesthetic performance. There are a number of cases which show massive failures with planning, procurement, construction and operation of megaprojects in the
transport sector. But there are also positive cases which underline that it is not a natural law that megaprojects fail rather than in the first instance a missing
accountability of the planning and decision processes. In this context the criteria for success or failure have to be defined appropriately, because the widely used time
and cost overruns are only rough indicators. Furthermore, the methods of evaluation have to be extended to allow for an integrated assessment of all sustainability
aspects. Long planning and construction times imply that coping with uncertainty is a crucial issue such that risk and change management, stable legal, financial and
political framework, and wide acceptance by stakeholders are essential requirements for a successful planning and implementation process.

1. What is “mega” about megaprojects?1
Megaprojects are large, and in many cases complex investments, in
general undertaken by the state in the fields of culture (opera houses,
museums), health care (hospitals, health centers), administration
(headquarter buildings), water resource management (reservoirs, flood
protection), energy production (nuclear production plants, regenerative
production systems), and network industries for communication, en-
ergy distribution or transportation. In all of these sectors prominent
examples can be found for successes and failures of large investment
projects (see Wegrich et al., 2017; Osei-Kyei and Chan, 2017). This
paper will focus on the transportation sector. Although private stake-
holders are strong promoters of such projects and there are several
examples on privately organized and financed projects in the past - such
as the Suez and Panama Canals or the Channel Tunnel - the willingness
of private investors to take the full risk has weakened. Presently there is
only one spectacular private project in the transportation sector dis-
cussed, which is a canal parallel to the Panama Canal, crossing the Lake
of Nicaragua. Its further promotion by a Chinese investor is highly
uncertain after the recent extension of the existing Panama Canal. Some
other projects are promoted by organizations which may be legally
private but in effect are highly influenced by the state, as for instance
railway companies in China, Japan, Spain or France.2 Many transpor-
tation megaprojects relate to the urban transport sector, which is
planned almost completely under public governance (see Altshuler and
Luberoff, 2003; OMEGA Centre, 2012). Therefore, this paper will focus
on large transportation projects, which are widely planned and pro-
cured by public organizations.
In the literature megaprojects are usually defined by their high in-
vestment costs, which is their first and major common feature. But it
depends on the decision unit whether the expenditures for a project are
regarded as “mega”. The German Reform Commission for Large Projects
(2015) has defined projects with an investment budget of more than
100 mill. € to belong to this category, because smaller public organi-
zations like communities might be involved, for which this investment
volume appears as “mega”. In contrast Flyvbjerg (2014a) mentions a
financial volume of at least 1 bill. US$. As there is no statistical defi-
nition existing the question of a clear categorization of megaprojects
remains open. But most literature pieces tend to the upper figure, in
particular because the term “mega” indicates an unusually high vo-
lume.
The second common feature is the project's complexity, which is
even harder to define because it involves unusual challenges for ar-
chitects, planners and constructers, internal interdependencies (within
the project), external interdependencies (between the project and other
facilities) and feedbacks over time before, during and after project
realization. “Unusual” means in this context that common practices of
planning and construction are not sufficient and either new approaches
or new combinations of existing approaches are necessary. Complexity
is further increased by the long planning and permission processes, long
construction time, long horizon for the project life with associated high
uncertainty of benefits and costs, as well as by various interventions of
public and private stakeholders during planning, procurement, con-
struction and operation phases.
A third common feature is the expectation of promoters that the
project will lead to a step change of performance. Flyvbjerg (2014a)

E-mail address: rothengatter@kit.edu.

1
A number of abbreviations will be used in the text which are explained at the end of the paper.
2
See the description of selected megaprojects in section 2.

https://doi.org/10.1016/j.tranpol.2018.08.002
Received 30 April 2018; Received in revised form 6 August 2018; Accepted 7 August 2018
Available online 09 August 2018
0967-070X/ © 2018 Elsevier Ltd. All rights reserved.
W. Rothengatter
describes this feature by four “sublimes”: technological, economic, aes-
thetic and political. A technological sublime means that innovative,
unique elements cause new challenges for planners, architects and en-
gineers. A project can also induce new economic perspectives for a re-
gion or a sector and influence the path of economic growth. Aesthetic
attractiveness is not only a requirement of cultural buildings but also
for large transportation facilities like bridges (for example: Viaduc de
Millau in southern France, which attracts thousands of tourists every
year). Policy makers expect a step change of regional or urban attrac-
tiveness which increases their reputation and represents a monument of
their political career. In democratically governed countries the strug-
gles for political dominance can influence location and design of
megaprojects, and they can contribute to planning and management
problems which cause additional cost and time.3
The sublime feature can give rise to regional promoters' belief that
their project is unique and can be treated outside of common practices
of planning and financial control. They may be encouraged to include
experimental engineering elements even in commercial projects (see
the examples of the Denver and Berlin airports, section 2). This may
lead to unforeseen problems during construction which cause major
delays. The presumed exceptional status of the project may also mislead
administrators to relax strict controlling practices. This leads to the
paradox that the most expensive projects are often most softly con-
trolled and show high cost and time overruns which at the end have to
be covered by the tax payer who takes the role of a risk taker of last
resort.
The manifold planning and implementation failures with mega-
projects have contributed to establish a particular research area and
research institutions on this field. Bent Flyvbjerg conducted the first
major research activities at Aalborg and later at Oxford University. This
included econometric studies on the accuracy of traffic forecasts and
cost estimates on large transportation projects (with Flyvbjerg et al.,
1995a, Flyvbjerg and Skamris, 1996) as well as detailed analyses of
particular projects as for instance the Fehmarn Belt bridge project in
Denmark (with Flyvbjerg et al., 1995b). A comprehensive summary of
project analyses and achieved insights is given in Flyvbjerg et al. (2003,
and a number of journal papers). Flyvbjerg has summarized his views
on megaprojects in an overview paper (2014a) and given specific ad-
vice to the planning of a high-speed rail link between Shenzhen and
Hong Kong (2015).
Altshuler and Luberoff (2003) have analyzed large-scale public in-
vestments in U.S. cities after the Second World War and observe policy
shifts and upheavals during the five decades of history with an up-
coming new generation of megaprojects in the transport sector in the
context of urban development and revitalization. They found that a
large number of projects “derailed” when evaluating them by economic
evaluation criteria. Major reason is the highly complex process for
achieving legal and political approval which in many cases leaves
technical problems open and to be solved during construction. While
this book is based on historical developments the theoretical discussion
on management, governance and institutions, finance and assessment is
summarized in the monographies edited by Priemus et al. (2008) and
Flyvbjerg (2014b).
The Volvo Research and Educational Foundations have launched a
four years excellence program, which has been allocated to the OMEGA
excellence research center at Bartlett School (University College of
3
In the literature often longer lists of characteristic features of megaprojects
are discussed. For instance, Frick (2016) mentions the „seven Cs“: colossal,
costly, captivating, controversial, complex, control, communication. Also
amusing persiflage is popular such as the „iron law of megaprojects“: over
budget, over time, over and over again (Flyvbjerg, 2014a), or the „seven phases
of project life“: wild enthusiasm, disillusionment, confusion and panic, escape
of responsible parties, search for the guilty, punishment of an innocent, pro-
motion of a non-participant (http://www.1000advices.com/guru/project_
mgmt_7phases.html).
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Transport Policy 75 (2019) A1–A15
London) under the lead of H. Dimitriou. The center published a final
report (OMEGA Centre, 2012) in which the results of an analysis of 30
case studies in 10 countries and the lessons learned are summarized.
While the studies of Flyvbjerg et al. focused on statistical analyses on
cost and time overruns the OMEGA research tried to extend the scope of
success factors to a wider range of aspects including the projects' abil-
ities to meet (possibly changing) societal, environmental and political
objectives in different development stages and cultural contexts.4
The EU Commission has launched several research projects on the
field such as EVA-TREN (European Commission: Projects, 2008) and
has in the recent years started a number of initiatives to streamline the
planning and procurement processes in the context of building up the
“Transeuropean Transport Networks” (EU Commission, 2013). The
Commission has co-sponsored the NETLIPSE project (together with the
Ministries of Transport of the Netherlands and the U.K.) which pub-
lished guidelines and coordinated the network research of about 80
researchers from 25 countries for the Cost Action “Megaproject”
(2015).5 The EU Parliament has launched two studies on large trans-
portation projects (Schade et al., 2013; Doll et al., 2015). The German
Ministry of Transport has established a Reform Commission on the
Construction of Large Projects which has presented their results in
summer 2015 (Reformkommission, 2015). Furthermore, private asso-
ciations like the U.K.-based Major Projects Association have been es-
tablished with the purpose “to improve the initiation and delivery of
major projects through the interaction of members from all sectors in
sharing experience, knowledge and ideas”.6 In the U.S. several surveys
have been conducted, partly initiated by the Federal Highway Admin-
istration, to analyze the causes of delays and the efficiency of co-
operation among public authorities (see Plotch, 2015).
This paper does not intend to present a full literature review. It
rather tries to address the major aspects associated with megaprojects
in transportation based on a brief presentation of projects which are
mentioned as “bad” and “good” practice cases in the literature (section
2). Indicators of success or failures are usually defined narrow in sta-
tistical analysis (cost and time overruns) while they are defined more
widely in public choice or narrative approaches (section 3). Also, the
economic evaluation can be based on narrow criteria like financial re-
turns or standard cost-benefit ratios and on wider impact analysis using
integrated assessment approaches (section 4). As uncertainty is a
common feature for megaprojects there arise important issues for risk
analysis and change management (section 5). For the public sector
particular issues refer to the legal framework, the way of governance
and a stable finance of projects (section 6). As megaprojects often
provoke social conflicts and interventions of opposing parties the or-
ganization of public participation and mediation is a crucial challenge
in democracies (section 7). Although megaprojects often are appraised
by their promoters to be unique it will be possible to draw some general
conclusions (section 8).
2. World-wide examples for “bad” and “good” practices with
planning of megaprojects
Every large project has its specific history, technical challenges,
economic, environmental and financial features as well as political
framework conditions. Therefore, it is not easy to identify common
indicators for success or failure. But meanwhile a rich number of in-
ternational case studies has been published in the literature such that it
is possible to classify characteristics which are mentioned frequently in
the case studies. Table 1 gives an overview on projects which are often
4
There are a number of spin-off papers from the OMEGA research, as for
instance Giezen et al. (2015).
5
For a detailed description of the activity see Hertogh and Westerveld
(2011).
6
http://www.majorprojects.org/aboutus/aboutus.
W. Rothengatter Transport Policy 75 (2019) A1–A15

Table 1
Megaprojects mentioned as “bad practice” in the literature.
Project/man-agement Start/Open. Const.Cost7 Cost Essentials characteristics
Ov(%) and problems

Suez-Canal 1859/1869 426 mill. ffrs 230-1900 Based on a vision (F. de Lesseps); no clear plan for engineering and management in early phase;
/Egypt/private private concessions, design elements, approvals and technologies developed during construct.
under political conflicts (FR/UK/TR).
Panama Canal 1876-1889/ 352 mill. US$ 200–260 2nd canal project of de Lesseps; interruption because of bankruptcy; difficult geological and
/Panama/private 1905-1914 climate conditions (28,000 workers died); revival and continuation by US government; more
careful planning in the 2nd phase.
New Panama Canal 2007/2016 5.6 (6,85) bill. 100–145 Extension of canal and locks to dimensions of modern container vessels up to 14,000 TEU;
/Panama/public-priv. US$ opening planned for 2014 but delayed; allocation of 1.25 bill. US$ additional cost open;
alternative canal routes still being investigated.
Boston Big Dig 1991/2003 15.5 bill. 170–450 Central Road Artery Project; planned by Mass. Turnpike Auth.; 58% financed by Federal State;
/USA/public US$ evolution of complex sub-projects; rent seeking of big construction firms; massive changes of
plans during construction; geological problems.
San Francisco Oakland Bay 1996/2013 6.5 bill. 150–400 Eastern part of bridge replaced after earth quake damage in 1989; first estimations 1–1.3 bill. US
Bridge US$ $; serious conflicts about design (viaduct/cable stay/anchored suspension) even after project
/USA/publ. start; final decision in 2005.
Denver Int. 1989/1995 4.8 bill. 140–150 Plans for an innovative automatic baggage handling system; strategic changes during
Airport US$ construction (complexity problems); bag. system scrapped in 2005 because of high maintenance
/USA/public cost; 16 months delay of opening.
Channel Tunnel 1987/1994 15.0 bill. 80–100 Delayed construction and approval partly cau-sed by changes of national safety regulations;
/UK-France/private additional financial costs; over-optimistic revenue expectations; several debt restructurings; HSR
connection to London delayed (2003/07).
Great Belt Fixed Link 1988/1998 2.9 bill. 55–110 Two bridges and one tunnel; rail tunnel with high, road bridge with modest cost overruns;
/Denmark/public US$ construction problems caused delays; diplomatic conflicts with Finland because of low clearance
of East bridge causing delay.
HSR Zuid 2000/2009 9.8 bill. € 55 Availability-based PPP; financial responsibility shifted to the state during construction; delays
/Neth.lands/public-priv. caused by coordination problems with separate contracting for super- and substructures; late
implementation of EU train control system.
HSR Ulm-Stu-ttgart/S21 2010/2024? 10.5 + bill. € 60–190 Complex project with first design in 1996; long distance, regional and urban components, main
/Germany/public and airport stations; decided 1996, approval 2006, start 2010; delayed by financial problems
and protest movements; planning failures.
Berlin Airport 2006/2020? 6.6 + bill. € 180–260 Massive planning failures; problems with innovative elements (e.g. exhaust flue); more than 400
/Germany/public major changes of plans; management failures with coordination of construction work; missing
information and documentation.

Table 2
Projects mentioned as “good practice” in the literature.
Project/man- agement Start/Open. Const. Cost Essential characteristics and success factors
Cost Ov(%)

Athens Airp. 1996/2001 2.0 bill. – New airport of category 2 (up to 25 mill. paxe), 20 km East of Athens; PPP under lead of construction company; 45%
/Greece/PPP € private share; 55% state finance, supported by EU; 51 months of construction time; development project for old
airport area.
Oeresund Fixed Link 1995/2000 4.1 bill. 32–70 Combined bridge, tunnel, artificial island; road and rail; Oeresund Bro Consortiet formed 1992; contracts with 3
/Den.-Swed./public € construction consortia; cost escalation through safety and environmental requirements; pay-back period 35 years
(completely user financed).
Viaduc de Millau 2001/2004 0.4 bill. 13 Cable-stayed bridge over Tarn Canyon; one of the tallest bridges of the world with mast height of 343 m; length
/France/private € 2460 m; planned by M. Virlogeux, designed by star-architect N. Foster; toll finance; innovative construction
techniques; tourist attraction.
HSR Tours- Bordeaux 2011–2017 7.8 bill. – Missing HSR link of 340 km between Paris and Bordeaux; PPP with 49% private capital, to be refinanced by rail
/France/publ.-private € track charges; concession for 50 years; EU co-finance; travel time P-B (530 km) reduced from 3′15 h–2 h; first
positive impacts on housing market in Bordeaux.
Gotthard Base Tunnel 1999–2016 12 bill. 21–50 Transalpine link; with 57 km length longest railway tunnel of the world; part of the Swiss NEAT transalpine
/Switzerland/public sfrs crossings (total volume 23 bill. sfrs.); no cost and time overrun for construction after 2008; financed by a fund from
taxes and charges, partly by HDV tolling.
Taiwan HSR 1998–2007 16.5 bill. – 349 km HSR combining 12 stations; BOT finance with 20.6% state share; little cost and time overruns; large
Taiwan US$ overestimation of ridership in the first years; change of financial scheme to allow operating company to break even;
PPP positive net income after 2011.
BAB 20 Motorway – 2.6 bill. 0–100 Western section of BAB 20 in North Germany; Eastern section was prioritized by program “German Unity”, built
/Germany/public 2030 € after 1992 without cost and time over-runs; Western section planned after 2003, still heavily debated because of
environmental problems and under-estimated costs.

mentioned as bad practice in the literature. Table 2 refers to good 2.1. Projects classified as “bad practice” in the literature
practice projects while Table 3 gives examples for comprehensive
transportation plans of three countries which include a number of in- The order of magnitude of cost overruns is the predominantly used
terlinked megaprojects. success criterion for megaprojects in the literature. However, this figure

7
Cost in currencies given by planning authorities, relating to time of opening. (footnote continued)
Cost overrun interval: Actual costs versus estimated costs at time of project start (first figure) – at time of political decision (second figure).

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W. Rothengatter
Table 3
Investment programs including megaprojects.
Investment Type Start/status/ Length
Program plan
HSR Network high 2004/2016/ 0/20,000/38,000 km
/China/ speed 2025
rail
HSR Network high 2004/2016/ 1000/3200/5000 km
PEIT speed 2030
/Spain/ rail
Maglev mag-lev 2010/2026/ Testtrack42 km/Shinagawa-
Corridor train 2035 Nagoya/Osaka
Tokyo-Nag-oya-
Osaka
/Japan/
is often ambiguous because it may relate the final construction costs to
the estimated costs at an early phase of promotion, at the time of po-
litical decision, of legal project approval or of construction start.
Furthermore, projects financed with private participation usually in-
clude financial costs in their cost reports while this is an exception for
publicly financed projects. A prominent example for the difference
between the cost figures is the Suez Canal. The cost overrun of 1900%
exhibited in several literature pieces8 uses initial cost estimations as
lower bounds when first ideas were developed around the year 1800
under the regime of Napoleon I (30 mill. ffrs). After the foundation of
the Suez Canal company in 1858 the total costs of construction were
estimated 162 mill. ffrs. plus 26 mill. cost for interest payments, which
makes 188 mill. ffrs. In the year of opening 1869 the total costs turned
out to be 426 mill. ffrs. which makes 1420% cost overrun compared
with the first estimation, while the cost overrun compared with the
estimation at the start of construction reduces to 230%. The often-
quoted figure of 1900% includes investments for early extensions and
maintenance work after opening, amounting to additional 62 mill. ffrs.
Severe political and technical problems characterize the history of the
Suez-canal. At that time the U.K. government strongly torpedoed the
project, while the supporting Ottoman empire and the Egypt kingdom
being unreliable and close to bankruptcy. On the technical side it was
necessary developing innovative excavation technologies and efficient
supply chains. Therefore, comparing the cost overruns for such a
complex historical project with more recent undertakings one learns to
recognize the performance of engineers as well the courage of initiators
and risk takers at that time of history.
A more recent example is the central artery/tunnel project in
Boston, well-known under the name of “Big Dig”. First plans estimated
the total cost with about 2.3 bill. US$, in 1987. This was increased
successively and at project start in 1991 it amounted to 5.2 bill US$.
Finally, it reached a sum total of 15 bill US$ when the project was
opened in 2006. If cost of interest on debt would be included this sum
would even increase to about 24 bill US$.9 The Big Dig project in
Boston was characterized by high technical challenges arising from
geological difficulties, existing underground facilities or tunnel con-
struction under flowing traffic. But the main problems were stemming
from political interventions which caused manifold major changes of
plans, partly during construction. The plan which was finally agreed
was the 26th plan developed and was named “Plan Z” accordingly.
The replacement of the Eastern part of the Bay Bridge San Francisco-
Oakland gives a similar example which demonstrates that cost and time
overruns can only be understood by looking into the planning and
decision processes. The bridge history is described by Frick (2016) who
8
For example in the publications of Flyvbjerg, see list of references.
9
See the detailed narrative of the history of this project in Altshuler and
Luberoff (2003).
Transport Policy 75 (2019) A1–A15
Essential characteristics
Start Beijing-Tianjin; 4 corridors North-South; 4 corridors East-West accomplished until
2015; 8 × 8 corridors planned until 2030; speeds 250–350 km/h; goals include improving
regional accessibility and environment; lower construction costs through standardization;
technology base from France, Germany and Japan at the beginning.
Start Madrid-Seville 1992, M.-Barcelona 2004; largest HSR network in Europe; largest of
the world in terms of HSR km/inhab.; comparably low cost of construction; modest
occupancy; improving regional accessibility and environment; massive financial support
from EU; border crossing HSR links to France planned.
Electrodynamic Maglev system with supra-conducting magnets; 550 km/h operating
speed; first section Tokyo- Nagoya under construction, financed by JR Central; second
section to be financed by the state; ring-fenced by state plan to develop airport Tokyo-
Haneda only for international flights.
goes into the details of the tedious processes of planning and decision
making among conflicting authorities and stakeholders after 1989,
when the Eastern part of the bridge was damaged by the Loma Prieta
earthquake. The first cost estimations in 1991 referred to a retrofitting
of the existing Eastern part at a cost of 1 bill. US$ which was compared
to a replacement which was calculated not much more expensive (1.3
bill. US$). Thereafter serious conflicts arose among local, state and
federal authorities about the performance requirements, in which also
further stakeholders became involved as for instance groups fighting for
bike lanes, railway tracks or protected areas on the island of Yerba
Buena which connects the Eastern and Western branches of the bay
bridge. After dozens of alternatives for the bridge design (viaduct, cable
stay, suspension) had been developed the responsible state authority
CALTRANS decided to move forward in 2001 with the construction of a
self-sustained suspension bridge for which the costs were estimated 2.6
bill. US$. Blocking interventions followed from metropolitan autho-
rities and from the state government of California which favored a less
expensive viaduct design. Finally, in 2005 an agreement could be
achieved with the assistance of the federal government and the con-
struction of a suspension bridge could be continued, while the esti-
mated costs had meanwhile doubled to 5.5 bill. US$. The bridge could
be opened in 2013 and the construction costs summed up to 6.5 bill. US
$. Including financial costs this sum would double.
Some of the projects, for which big problems with cost and time
overruns occurred, have proven successful in the long run and have
even become carriers of national economic development, in particular
the big canal projects in Egypt and Panama. The same holds on the
regional level for spectacular cultural “cost-overrun” projects like the
Sydney and Hamburg opera houses. Other projects may be evaluated
more positively in a wider context of network and industrial inter-
dependencies, as for instance the Channel tunnel. Therefore, a wider
definition of success criteria is necessary, as will be elaborated in sec-
tion 3.
2.2. Projects classified as “good practice” in the literature
Table 2 gives a list of megaprojects which are classified as successful
in the literature.
The Taiwan HSR project may be called successful with respect to
cost and time accountability because almost no overruns occurred. The
project, which was financed according to the build-operate-transfer
(BOT) scheme, was selected best engineering project by the Asian
Engineering Council. However, the forecasted figures for the passenger
volume (about 200,000 pass. per day) were by far not reached in the
first years after opening (actually about 50,000 pass. per day).
Therefore the operating company suffered from revenue shortage and
was close to bankruptcy. This problem was solved by changing the fi-
nancial scheme with respect to an extension of the concession period,
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W. Rothengatter
reduction of yearly depreciation and lowering of the interest rate. With
these changes the financial figures are positive since 2011 and con-
tinuously improving because ridership is growing – although not yet
approaching the forecasted levels (see Chou et al., 2012).
The last example of the BAB 20 motorway indicates a further reason
for possible failures with megaprojects: If a project is planned and
implemented in a positive political atmosphere10 the planners and en-
gineers can focus on the technical problems and keep control of the
process by engineering instruments. This was the case with the Eastern
branch of the project. But if a project is politically heavily debated and
strong groups fighting against it using all democratic instruments of
interventions including appeals at court, many changes of the original
design may become necessary, and the planners need a good part of
their energy to defend their plans or to adjust them to resolve political
conflicts. All “good practice” cases above – except for the Western
branch of the last project - refer to projects which did not suffer from
heavy political conflicts. The crucial importance of conflict manage-
ment in democratic regimes is discussed further in section 7.
2.3. Transport investment programs including megaprojects
The example of the Swiss transalpine NEAT tunnels leads to the next
characteristic of several megaprojects in the transport sector: They
might be elements of a comprehensive infrastructure plan which aims
not only at financial or economic benefits but also at achieving goals of
environmental quality or regional connectivity/equity. The Gotthard
base tunnel is a part of such a plan which includes a parallel transalpine
base tunnel (Lötschberg, motivated by regional balance goal) and a
total financial volume of 23 bill. sfrs. The investment programs listed in
Table 3 are even much larger.
The examples exhibited in Table 3 stand for very large investment
programs which are motivated by a wide range of political goals. China
has started in the year 2004 to construct the first link of a “new gen-
eration” high-speed rail network with speeds up to 350 km/h. The
Beijing-Tianjin link (120 km) was opened in 2008, reducing the travel
time to 30 min, i.e. to a regional transit connection time. The project
was planned as a complete greenfield project, including new mega-
stations in Beijing (South) and Tianjin. By 2015 the “4 × 4 corridor”
network (4 corridors North-South, 4 corridors East-West) was realized
and in 2017 the HSR network included already 25,000 km. The plans
foresee a further extension to 30,000 km in 2020 and 38,000 km
(“8 × 8 corridors”) in 2025. Huge budgets have been invested and are
planned to implement these ambitious plans, about 7.1 trill. RMB in the
two Five Years Plans 2011-15 and 2016-20, which is about 0.9 trill. US
$. Ridership grew from 127 mill. travelers in 2008 to 1.7 bill. in 2017.
The specific construction costs are significantly lower compared
with other HSR countries. While in Europe the average costs per HSR
km are 25–29 mill. US$ and the calculated costs for HSR in California
are even 56 mill US$/HSR km the Chinese figures are in the order of
magnitude of 17–21 mill. US$/HSR km (see Ollivier et al., 2014). The
costs of constructing a 250 km/h link are 87 mill. RMB and for a
350 km/h link about 129 RMB (11–16.5 mill. US$). Cost overruns for
China's infrastructure projects are estimated at 30.6% for a project
sample analyzed by Ansar et al. (2016), which is much less compared
with figures from Europe or US. Such a dimension of cost overrun is
also reported for the recent HSR project between West-Kowloon (Hong
Kong) and Guangzhou. Beyond the lower labor costs in China the
predominant reasons for construction cost efficiency are identified as
use of standardized construction elements and import of advanced
knowledge from Europe and Japan. A low-cost construction technology
for bridges and elevated parts of the guideways has been developed in
10
This was the case in many countries after the Second World War and for
the countries East of the former iron curtain after the dramatic political changes
following the fall of the Berlin wall in 1989.
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Transport Policy 75 (2019) A1–A15
China, while the technology for slab track manufacture and the train
control technology (ETCS) stem from Europe. When it comes to train
technology all prominent European and Japanese manufacturers have
provided their recent developments such that the Chinese HSR system is
the most modern-one of the world.
As the average fares are much lower with about one-fourth of the
fares of other HSR countries the HSR projects only break even for the
very busy links in the Eastern part of the country where the tracks are
most frequently used (e.g. 37 departures per day and direction between
Beijing (South Station) and Shanghai; 1318 km in less than 5 h). The
links to the Western part of the country are more difficult to construct
and show a lower patronage. For instance, the HSR link between X'ian
and Chengdu (opened in 2017) required constructing 135 of the 658 km
in mountainous areas of the Sichuan province as tunnels or bridges.
Because of wildlife protection tunnels have been preferred. Although
this is the most profitable connection to the Western part of the country,
combining cities of 8.7 and 14.5 mill. inhabitants, the financial viability
is doubtful (19 train pairs per day, which is half of the Beijing-Shanghai
frequency). One can conclude that the further planned East-West cor-
ridor projects will show even worse financial performance such that the
planned extension to an “8x8 corridor” network will be primarily mo-
tivated by goals of environmental protection and balanced regional
development. Ansar et al. (2016) argue that with such extensive
transport infrastructure plans China is heading for an infrastructure-
induced national financial and economic crisis. However, they base this
argument on direct financial project figures and not on an integrated
assessment of the comprehensive development plan including all wider
economic impacts (see section 3).
Spain has also started a comprehensive investment program for
HSR. The first link was constructed between Madrid and Seville and
opened already in 1992. The success of this line encouraged the state to
build a second link between Madrid and Barcelona (620 km, completed
in 2008; cost 9 bill. EUR; cost overrun 30%) such that the time distance
between these largest cities of Spain reduces to 2 h and 30 min.
Furthermore, plans were elaborated within the Spanish Strategic Plan
of Infrastructures and Transport (PEIT11) to extend the Spanish HSR to
an overall length of 5000 km. As of 2017 about 3100 km have been
built, on which the trains reach speeds up to 310 km/h. This is not only
the largest HSR network in Europe but also the highest HSR network
density in the world in terms of HSR km per inhabitant12 or per km2 of
country area.
The strategic objectives of the PEIT are to improve system effi-
ciency, to strengthen social and territorial union, to contribute to the
general sustainability, and to drive economic development and com-
petitiveness. It follows from this list of political objectives that the fi-
nancial viability of projects was not the predominating goal of invest-
ment policy. It needs to be mentioned that this was conforming with the
EU strategy to build “Transeuropean Networks” (EU Commission, 2013
13
) such that the HSR system was substantially co-financed by the EU.14
The reason for high EU financial support was Spain's status as a “co-
hesion country”15 and the needs to substitute the wide railway gauge of
1668 mm for to adjust to the EU standard gauge of 1435 mm. Fur-
thermore, the European standard train control system ETCS (Level 2)
was installed such that the Spanish plans were in harmony with Eur-
opean “interoperability” standards and political cohesion goals. These
11
PEIT: Plan Estratégio de Infrastructuras y Transporte; duration
2006–2020.
12
The number of inhabitants in Spain is 45 mill. versus 1300 mill. In China.
13
The plans of the EU Commission (2010) foresaw an HSR network of
30,000 km.
14
Spain, as a so-called „cohesion country“, received more than 45 bill. EUR
between 2000 and 2012 from the EU for improving its infrastructure.
15
The peripheral countries Ireland, Spain, Portugal and Greece were cate-
gorized as cohesion countries and received higher funding rates to improve
their connectivity to the main EU area.
W. Rothengatter Transport Policy 75 (2019) A1–A15

Fig. 1. Characteristics of Japanese Chuo Shinkansen.

• Distance Tokyo/Shinagawa-Nagoya/Osaka: 280/550 km; 247 of the 280 km (86%) in tunnels, 35 km (12%) bridges and viaducts;
• Travel time Shinagawa-Osaka 67 min; present Shinkansen time 2 h 22 min; design speed 505 km/h;
• Start of project: 2014, after decades of technological research and operating a test track at Yamanashi;
• Planned opening of section Tokyo-Nagoya (280 km): 2027; Nagoya-Osaka (270 km): 2037–2045;
• Technology: Electro-dynamic levitation, linear motor propulsion;
• Finance 16
of Tokyo-Nagoya: about 37–45 bill. US$ (37 bill. estimated for construction costs, only); financed by JR Central ;
• Finance of Nagoya-Osaka (similar budget needed); predominantly state finance (about 27 bill. US$).
financial incentives and the prospects of changing to modern rail a substantial co-finance but also by protecting it from low-cost air
technology encouraged the Spanish policy makers to set most ambitious competition (limitation of slots for domestic air connections at Tokyo
targets for environmental quality (change of modal split, reduction of Haneda airport),17 stimulating research and technology for Maglev
domestic air transport) and for improving regional accessibility: 90% of train systems and supra-conducting electrical transmission. The Japa-
Spanish inhabitants should reach the next HSR station within a distance nese technology uses supra-conducting magnets to repulse the cars from
of max. 50 km and all of the 47 province capital cities should be con- the guideway (gap of 10 cm) and promises more safety and resilience in
nected to the HSR network such that the maximum time needed for the case of earthquakes compared with conventional Shinkansen trains
traveling from a province capital to the national capital Madrid would or the German TRANSRAPID technology (1 cm gap). The main reasons
not exceed 4 h. for deciding in favor of a Maglev technology are not so much higher
Warnings were given already in an early phase that the PEIT could transport efficiency18 or environmental19/regional benefits (as in
lead to a massive over-investment in long-distance transportation, in Spain) but rather technological progress (innovative supra-conducting-
particular in HSR (Albalate and Bel, 2010; Beria et al., 2018). Never- based levitation) to show the industrial leadership of the country. This
theless, the investment policy was continued with projects which more is underlined by the attempt of the Japanese government to export the
and more moved off financial and economic goals. The infrastructure system to the U.S., to Latin America, to the U.K. or to the Emirates.
boom has over-heated the construction sector such that the economic While the Japanese Maglev megaproject gives a positive example
crisis of 2008 had even higher negative impacts than in other countries. for the necessary cooperation between the state and the private in-
However, the intended positive effects of the Spanish HSR policy in dustries it is also criticized because of protectionism of monopoly and
terms of modal shift from air to rail can clearly be observed on con- the risk of collusion. The latter is demonstrated with the bid-rigging
nections between major cities (see Rothengatter, 2010; Albalate et al., accusations against large construction companies in the context of
2014). After opening the HSR line Madrid-Barcelona the modal share of tendering construction works.
rail increased from 13 to 41% (2 years after opening) and to 61% in
2014 (RENFE, 2008). For the other busy HSR line between Madrid and 3. Indicators and reasons for success and failure
Seville these shifts are even higher (80% rail share) because the dis-
tance and travel times are shorter. The question is whether the en- 3.1. Indicators for success of megaprojects
vironmental and regional benefits for the economically non-viable
projects could be reached by other and less expensive instruments. The The examples given in section 2 show that it would be too simple to
EU Commission and the European Parliament are becoming increas- classify projects as “successful” or “failed” only taking the magnitudes
ingly skeptical and recommend a tighter financial control of the PEIT of aggregate proxies like cost or time overruns. While this is certainly a
plans (see Doll et al., 2015). clear classification for statistical analysis (presupposed that the same
The major goal of the Maglev investment in Japan is to strengthen definition of planned and actual data is used, see section 2.1) it cannot
the country's role as a technological leader for high-speed ground fully consider the scope of objectives behind a project which can consist
transportation. The Maglev development has been continued even after of:
the decision of Germany to stop the TRANSRAPID Maglev development
and the decision of China to build up a conventional HSR network in- • Project related economic performance measured through return on
stead of extending the Maglev link in Shanghai connecting the airport.
The transport policy issue behind this decision is the fact that the
busiest Shinkansen line between Tokyo and Osaka has reached its ca- 16
In most media publications a sum total of 9 trill. Yen is mentioned which is
pacity limit and it is most difficult to increase the speeds of trains far about 84.4 bill US$.
beyond 300 km/h on the existing tracks. Furthermore, the transporta- 17
This increases the monopoly power of JR Central on this most busy
tion planners found it necessary to develop a second corridor through transport relationship.
the Central Mountains to link the agglomerations directly and reduce 18
The gains of travel time are partly offset by the time of feeder service
travel distance for the “Chuo Shinkansen” (see Fig. 1): between Tokyo and Shinagawa.
19
The Japanese government is supporting the project not only through The Maglev system will consume even three times as much energy per seat
compared with the Shinkansen train.

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W. Rothengatter
investment or benefit-cost ratio.
• Target achievements for public sustainability goals such as
- Spatial connectivity impacts;
- Wider economic impacts including technical progress and inter-
national competitiveness;
- Environmental impacts; and
- Impacts of distribution (regional, personal balance and equity).
• Acceptance by population and stakeholder groups.
Megaprojects in transportation usually have wide spread impacts on
the network-wide activity patterns, on economic sector development,
on the environment and or income distribution/equity. The three ex-
amples for national investment programs given in section 2.3 underline
that the underlying goals can imply comprehensive strategies, which
cannot be evaluated by partially looking at single projects and their
direct impacts on revenues, benefits and costs. The range of wider
economic impacts can include fostering new technologies and
strengthening the competitiveness of national industries. There is a
strong promotion for the Japanese MAGLEV system in the U.S. (link
Washington-Baltimore) or the U.K. (2nd U.K. HSR link London-Man-
chester). The Spanish railway industry has been successful with some
large railway projects in Latin America (Mexico Suburban Railway) and
the Middle East (Saudi-Arabia Medina-Mecca). Chinese companies are
now dominating the markets for constructing railway infra- and su-
perstructure. Examples are the HSR link Istanbul-Ankara in Turkey, the
Nairobi-Mombasa rail link in Kenya, the initiative to revive the Rio-Sao
Paulo HSR project in Brazil or the railway connections alongside the
“New Silk Road” between Asia and Europe as well as their extensions to
central Europe, as for instance the railway link between the port of
Athens-Piraeus and Budapest.
3.2. Frequently observed reasons for failures
It is obvious that the main characteristics of megaprojects - “high
volume”, “complexity” and “sublimes” - lead to higher uncertainty
compared with smaller projects which can be treated with standardized
and well-tested methods. But there are a number of other main causes
of failure which are frequently observed with planning and constructing
megaprojects20:
Appraisal biases (too high benefits, too low cost estimations): In
many cases the promotion of a megaproject starts with enthusiasm on
future benefits and understating the expected costs. In particular in
countries with decentralized democratic decision making it seems to be
usual to raise political support with accordingly manipulated perfor-
mance and cost figures. Germany or the U.S. appear to be extremely
exposed to such risk because all three levels of democratic institutions,
i.e. local, state and federal, are actively involved and have to agree.
Citizens who feel disadvantaged by a project can find easy ways to go to
court. This is the reason why a well-known German architect and
planner argues that “every megaproject starts with a lie” (Hascher,
2015). The reason is that large projects otherwise have little chance to
survive the political and legal approval processes (Rothengatter, 2016).
Inaccurate planning in the early planning phase: The early phase of
a megaproject is often characterized by rough planning using unit fig-
ures taken from other projects or derived by rules of thumb, even as-
suming that costs observed in the past can be reduced by learning ef-
fects. Optimistic figures for construction components (e.g.: costs per m3
of tunnel excavation, cost per km of earthworks and track construction,
costs per m2 of bridges) are combined while neglecting critical elements
20
Causes of cost and time overruns are discussed in many literature pieces.
Their classifications widely depend on the type of megaprojects and the
countries in which they are implemented. Theoretical discussions are usually
based on (positive) public choice theory (see for instance Plotch (2015) and the
foundations laid by Downs (1957) or Buchanan and Tullock (1962)).
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Transport Policy 75 (2019) A1–A15
- hoping that problem solutions will be found in the later phases of the
planning and procurement process. This means that complexity pro-
blems are not identified early, shifted over time, accumulate and
emerge in an unprecedented dimension after the project is approved
and its final design decided (or even construction has been started) such
that there are little technical alternatives left for solution to the pro-
blem.
Approval before project is mature: If a project is politically and
legally approved it can happen that the plans are already outdated and
should have been revised. However, the necessary revision is left un-
done to avoid the risk of re-iteration of the tedious permitting pro-
cesses. Other cases of approval of immature plans occur if some sections
of a transport project have passed the legal process while others are still
undecided. In such cases the promoters hope for approval of the re-
maining sections because otherwise the whole investment would prove
useless. This opens the door for various kinds of rent seeking, of citizens
(e.g. in cases of necessary expropriations), of political institutions (e.g.
on the local and state levels), of adverse stakeholder groups (e.g. NGOs
maximizing environmental requirements) and last but not least by
construction companies (exploiting their potential to raise supplemen-
tary claims).
Major changes during construction: After the chief architect and
planner of Berlin's international airport, M. von Gerkan (heading a
bureau of architecture and planning, which is very successful world-
wide, in particular in China and in the Emirates), was dismissed be-
cause of massive planning failures, which prevented the airport from
planned opening in the year 2012, he wrote a book on the history of this
project (Gerkan, 2013). He noted 487 major changes during construc-
tion time and accused policy makers, administrators and stakeholders
of having “no concept but unfulfillable desire”. While such changes
during construction are understandable in the case of experimental
projects for which sufficient experience is not available (e.g.: Suez and
Panama Canals) they indicate massive planning and procurement fail-
ures in the case of commercial projects like airports, tunnels or bridges.
Technological experiments: Promoters and engineers are proud to
apply innovative technologies and to demonstrate creativity and pro-
gressive thinking. In the case of cultural projects as for instance the
Sydney Opera House or the Hamburg Philharmonic Hall (both showing
huge cost overruns up to 1400%) this can partly be explained by the
objective to create a world-wide showcase of top cultural performance.
But in the case of a commercial project like Denver airport the in-
stallation of an innovative automatic baggage handling system, which
had not been tested before, was a big unnecessary risk which caused
delay of 16 months and more than 1 bill. US$ of additional costs. The
Berlin airport gives an even worse example: New and innovative sys-
tems of exhaust flue and fire protection should be integrated for which
no experience was available. Among other major failures (like the
wrong dimensioning of electrical cabling) these experimental elements
caused a delay of about 8 years (opening foreseen in 2020) and a tri-
pling of costs (based on the estimation at construction start in 2006).
No strict controlling, no change, no risk management:
Megaprojects are often discussed controversially in the public and in
the media. Every negative development fuels the fire of opponents who
fight against a project even after construction has started. Against this
background there is a high temptation to manage public projects ac-
cording to the EGAP principle (Everything Goes According to Plan).21
According to this principle no negative news should be published until
there is no point of return in the sense that stopping the project is more
expensive than finalization. Planners who give transparent information
on project risk run risks for their own career. Risk and change man-
agement is further discussed in section 5.
No solid financial framework: In the case of publicly financed or
co-financed projects the financial framework is often vaguely defined. If
21
As formulated by the Worldbank, cited in Flyvbjerg et al. (2003).
W. Rothengatter
a project is jointly financed public authorities, e.g. by the federal and a
state's government, the assignments of funds are often uncertain, de-
layed and not adjusted to the project needs (e.g. through yearly deci-
sions on the budget). If projects are financed through different levels of
public institutions the lower levels usually rely on risk taking at the
federal level (urban public transit, federal projects in cities as for in-
stance the Boston Big Dig). Public-private partnerships (PPP) perform
better on average with the treatment of financial risk, however, many
problems with PPPs have occurred after the economic crisis of 2008
because the private partners had over-estimated the revenue streams
(see the EU Commission project BENEFIT, 2016).
Failures with procurement and governance: Some of the above-
mentioned failures have their roots in the procurement phase when the
project governance is decided. Public projects are often managed by
public administrators who take such responsibility for the first time, or
project companies are established for which the management positions
are filled with friends of the political leaders (as in the case of the Berlin
airport). It also can happen that a project company is established very
late when major problems have emerged and the main responsible
agents have escaped (as in the case of the Stuttgart project, which was
politically decided in 1996 while the project company was established
in 2013). For further discussion see section 6.
The research of Flyvbjerg et al. (2003, 2009) has revealed that there
are little learning effects with respect to avoiding major failures as
mentioned above. This is reconfirmed by Anzinger and Kostka (2017)
who showed statistically for the case of Germany that the degree of cost
overruns for large transportation projects is almost unchanged in the
past 20 years. A main reason for this is missing distribution of in-
formation. This explains why planners don't draw on the experiences of
other projects world-wide. In many cases, this information is not easy to
retrieve. In the case of private partnerships important documents might
be confidential. And in the case of public governance information on
failures is not published because this might jeopardize careers of ad-
ministrators and politicians. Last but not least a comprehensive ex post
benefit-cost analysis is not mandatory in most countries, while France
gives an exception.22
4. Issues for economic evaluation of megaprojects
4.1. Economic approaches
4.1.1. Private profitability calculus
If a megaproject is planned as a concession or a revenue-based PPP
project then the revenues and costs expected by the private investors
play a dominating role. This implies that criteria such as present value
of net revenues, internal rate of discount or pay-back period are applied
by potential investors. While the efficiency criteria look simple, the
main focus for integrating private capital is the allocation of capital risk
among public and private players. This includes aspects like public
share of capital invested, provision of relevant complementary invest-
ments, avoidance of competing investments or protection of the market.
In particular the market protection for the private investors is a delicate
problem because it may conflict with the principle of free competition
and avoiding monopoly power as the example of the Japanese Maglev
project underlines. But the private investors need some guarantee that
the public will not invest in parallel undertakings which may compete
with the project. This is in particular relevant with privately financed
toll projects which are integrated into non-tolled public networks such
that an improvement of public parts may lead to traffic diversion and
lower project revenues. Furthermore, the protection against external
risk which cannot be controlled by the investor plays an important role
for private involvement.
22
This example indicates that there are country differences with respect to
the performance of planning and procurement, see Cantarelli et al. (2012).
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Transport Policy 75 (2019) A1–A15
4.1.2. Cost-benefit analysis (CBA)
Project-related CBA measures the consumer's and producer's sur-
pluses and the direct impacts of infrastructure use on non-users. When
applying conventional CBA one presumes that it is sufficient to look at
the transport sector, only, while neglecting possible impacts in other
sectors. This is theoretically only consistent if all other markets are in
equilibrium and the changes induced by a megaproject are marginal.
However, very large projects are expected to generate step changes for
mobility and logistics which may have substantial feedbacks through
other sectors of the economy. Therefore, conventional CBA can con-
tribute only a part of a comprehensive assessment.
As the CBA approach is widely standardized it has gained wide
acceptance and its outcomes serve as a dominating criterion of project
evaluation (see e.g. the Guide to Cost-Benefit Analysis of the EU
Commission (2014), Van Wee and Tavasszy (2008), or country eva-
luation methods as presented in the Quinet report (2013)).23 If a
megaproject with a low benefit-cost ration (bcr) is preferred to a set of
smaller projects which show a higher bcr for the same budget, then
clear arguments will be necessary to support this decision. On the
economic side one can argue that the standard CBA evaluation figures
don't apply for the special case, that there are substantial wider eco-
nomic impacts not considered in CBA or that non-monetary impacts like
environmental or climate protection are dominating the decision such
that the megaproject comes out as the best choice from a holistic as-
sessment approach. In the latter case an opportunity calculus (see
section 4.1.3 c) will be necessary from the scientific point of view.
4.1.3. Extended approaches
4.1.3.1. Wider economic impacts (WEI). Conventional CBA does not
consider network externalities, agglomeration and productivity or other
growth impacts. Megaprojects can have cross-border effects - in which
in particular the EU Commission is interested - or impacts on technical
progress, which is a motivation for the public support of the Japanese
Maglev project. In an economy which is characterized by
underemployment, megaprojects can also induce relevant multiplier
effects which foster medium term growth. The main instruments for
measuring and evaluating wider economic impacts are spatial
computable general equilibrium models (SCGEs, see Venables, 2007),
macro-economic and input-output models (Cambridge Econometrics,
2017; U.S. Bureau of Economic Analysis, 2015),24 regional potential
growth models (Biehl, 1991) or system dynamics models (European
Commission project TIPMAC, 2015; Schade et al., 2015). An overview
on the different approaches is given in OECD (2008) or Rothengatter
(2017b). Vickerman (2013) argues that positive agglomeration effects
stemming from connecting large cities by HSR can be accompanied by
negative backwash impacts on regions in between the agglomerations,
which have poor access to the HSR stations. This underlines that the
measurement of WEI predominantly based on agglomeration effects, as
it is applied by SCGEs, is too narrow and should be extended by a more
comprehensive macro-economic analysis (see also Quinet, 2018).
While SCGEs measure productivity effects only through the move-
ment of labor force from low to high density regions – induced by better
transport infrastructure – there is a need to estimate the productivity
effects which are induced by better production technology and orga-
nization. The endogenous growth model of Romer (1990) can serve as a
23
This does not mean that CBA figures cannot be manipulated. A striking
example is the CBA for two competing German Maglev projects in the states of
Bavaria and North-Rhine Westphalia, which came out with a bcr of 1.5 for each
of the project. Just before the consultants were to deliver this (desired) result to
the client (Federal MoT) they discovered a serious calculation mistake, which
was quickly corrected by adding a new benefit criterion which only applied for
one of the projects such that the final result of 1.5 was left unchanged.
24
The OECD NiGEM model, which is used for their Economic Outlook, is
based on New Keynesian Economics, i.e. it generates temporary equilibria
under market imperfections like underemployment.
W. Rothengatter
prototype for approaching this issue. This requires extending the Romer
model in a way that not only investment into highly educated human
capital but also investing into high standard transport infrastructure
will increase productivity. Time savings through more efficient trans-
portation systems or better economic use of time within the vehicle
during transportation can be productivity enhancing. Innovations into
the transport infra- and superstructures can foster changes of overall
technological development, for instance, the development of super-
conducting technology to be developed for the Japanese MAGLEV
system can generate spinoffs for other industries.
Most WEI models measure GDP and employment changes and are
not comparable with CBA approaches which measure welfare changes.
Therefore, the results in general cannot be added with CBA outcomes.25
Different megaprojects may induce different types of WEI such that the
focus of modeling can vary according to the context of the project to be
analyzed and the special purpose of model application (e.g. balancing
regional development, improving competitiveness, enhancing pro-
ductivity). Strategic objectives of modeling may require including
speculative elements into the dynamic feedback loops to make the
model open for simulating changes of trends. Therefore, the WEI ap-
proaches cannot be standardized like CBA and have to be adjusted in-
dividually to the project issues. Their results can serve as an additional
strategic decision support, comparable to strategic environmental as-
sessment (SEA) which extends the results of project-related environ-
mental impact assessment (EIA).
4.1.3.2. Integrated assessment. The development of integrated
assessment modeling (IAM) has started in the context of impact
assessment for climate scenarios (see IPCC, 2014). These scenarios
consist of a number of detailed sub-models, which are run separately
and exchange data on a common platform. This is motivated by the aim
to model the sector implications as detailed as possible such that the
macro-results are supported by sector outcomes which are generated by
well-tested and accepted partial models. The European Commission has
supported IAM approaches by studies like HIGHTOOL (accomplished
2016) or TRIMODE (to be completed until 2019).26 While HIGHTOOL
combines simplified sector models at an aggregate level on a spread-
sheet platform, TRIMODE combines detailed models for passenger
transport, freight transport and logistics, energy, environment and
climate, and economics.
IAMs can be constructed according to the main focus of modeling. In
the case of TRIMODE this is the impact of Transeuropean Networks on
the economy and on environmental or climate goals. Therefore, this
model will include the recent developments of activity-based transport
modeling in passenger as well as in freight transport. This means that a
sufficiently detailed modeling of logistics is foreseen to analyze to
which extend the improvement of the EU transport system can con-
tribute to foster economic growth while avoiding unnecessary trans-
port, shifting activities to environmentally friendly modes and im-
proving technology to approach the climate goals.
4.1.3.3. Opportunity costs. The Spanish and Chinese HSR policies have
started with economically motivated network connections, combining
major agglomerations. These initial HSR networks have been extended
by additional HSR links with the aim to improve on regional
accessibility and sustainability of transport. To underline the
rationality of choices, it is necessary to prove that the money invested
into HSR to improve regional conditions and/or the environment would
not achieve higher regional and environmental benefits if it were used
25
The elasticity approach of Graham (2006) gives an exemption, but it is
focusing on agglomeration effects through induced commuting or migration
and does not include dynamic impacts on technical progress.
26
Project descriptions can be found in the internet: http://www.high-tool.
eu/. http://www.m-five.de/en/internationale_projekte.html.
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Transport Policy 75 (2019) A1–A15
for other policy actions. In the context of conventional CBA it would be
sufficient to consider the opportunity cost of public capital, which can
be done by an appropriate setting of the rate of social discount.27 But in
the context of integrated assessment it implies the comparison of
different strategic concepts for achieving the underlying sustainability
goals. It is not known whether such comparisons for alternative
transportation/regional development/environmental protection plans
have been prepared in Spain or China before deciding on their extensive
HSR concepts.
In France the aspects of finance and opportunity costs have led to a
major revision of the originally extensive transport investment plans
which were driven by environmental goals. The environmental con-
ference held at Grenelle in 2007 had suggested an extension of the HSR
network (+2000 km), of investing in large inland waterway projects
and in urban metros or trams to improve on the environment, in par-
ticular to achieve a reduction of CO2 emission of transport by 20% (see
Tortora, 2012). This list of investments has been cut drastically some
years after and the only major HSR link implemented is the connection
Tours-Bordeaux (see section 2). Also, the plans for new mega canal
projects have been substantially cut and the only project remaining
(Seine-Nord Europe) was re-configurated. This demonstrates that non-
economic goals can dominate the development of infrastructure plans
in phases of economic prosperity (2007 was the year before the eco-
nomic crisis). Revising over-ambitious plans later may be painful but
are necessary when the needs of stricter budget discipline are becoming
dominant. In France such revisions are supported by the obligation to
perform an ex-post CBA. This can increase the motivation to investigate
alternative plans in an early stage of the planning process to avoid
major revisions (see Crozet, 2016).
4.2. Scenario development for alternative futures
Megaprojects have a long life and their generated benefits are as-
sociated with high levels of uncertainty. This implies that scenarios of
future dynamics have to be constructed to generate visions for a most
likely development and the possible alternative development paths.
This includes the following aspects:
4.2.1. Technology development
As the planning and implementation of megaprojects can take
decades it is necessary to place the planned project into the expected
long-term future technological environment. For example, if a large
railway project is planned with the aim to shift freight transport from
road to rail it will be important to construct a technology scenario for
all transport modes for the next decades.28
4.2.2. Behavior
Mobility patterns and logistics are changing over time, in particular
with the forthcoming processes of digitalization. Automation, assis-
tance systems and the sharing economy will expand and influence the
need for infrastructure. From this, it follows that planners must test to
what extend a new project is supported by such trends or needs further
changes after opening for operation to meet the future challenges.
4.2.3. Environmental targets and policies
Japanese, Chinese and European transport investment policies are
27
It is still discussed in the literature whether the usual estimation of the rate
of social discount by the so-called Ramsey rule is considering the full oppor-
tunity cost of the public budget, see Rothengatter, 2015.
28
Many forecasts in the context of desired modal change from road to rail
don't consider the technological development of road and air transport tech-
nology and result in wishful futures for the railways. The, 4th Industrial
Revolution“ might push road and air even more than rail transport. See Schwab,
2016. www.Industry4.0-Wikipedia.html.
W. Rothengatter
driven by environmental, in particular by climate, targets. Also, ex-
perimental urban developments in the Emirates and in China underline
that the climate targets of the Paris and Marrakesh climate conferences
can induce innovations for spatial development and urban transport
systems. A stricter enforcement of environmental and climate goals
would increase the prospects for megaprojects for public transit and
HSR and bring the optimistic forecasts for such projects closer to reality.
4.2.4. Spatial development by reducing barriers
In many cases a main goal behind a megaproject is to improve inter-
regional connectivity and regional competitiveness. Geographical bar-
riers can be overcome through canals, bridges and tunnels. Removal of
such barriers as it is planned by the EU Commission in the context of the
Trans-European Networks, has a direct impact on regional connectivity,
trade and transport and thereby on the benefits of single megaprojects.
4.2.5. Employment of production factors
The way of measuring wider economic impacts of megaprojects is
highly dependent on the assumption of future employment and the
exploitation of factor potentials in the areas concerned. If an approxi-
mately full employment situation is expected, then a megaproject
cannot contribute to employment goals.29 But it may improve pro-
ductivity through improved accessibility of areas with higher popula-
tion density (agglomeration effects) and of inducing technological
progress (endogenous growth effect). If an unemployment situation is
expected in countries or regions benefiting from megaprojects then
Keynesian multiplier and accelerator effects can substantially increase
the direct economic impacts.
4.2.6. Complementary and substitutional policy actions
When the project of constructing a bridge between Messina (Sicily)
and Reggio di Calabria (Calabria, Italy)30 was planned the transporta-
tion and regional scientists expressed differing opinions on the eco-
nomic impacts induced by the project. Transportation engineers and
optimistic consultants (hired by the Berlusconi government in 2005/06
which was in favor of the project) provided traffic forecasts which as-
sumed that the project would boost economic growth on both sides of
the bridge (100,000 additional workplaces) such that a high volume of
traffic crossing the strait of Messina would follow. Other regional and
general economists (hired by the succeeding Prodi government which
was against the project) concluded that the project would not auto-
matically generate more employment. Much more money than the
budget needed for the bridge would have to be invested into regional
development to make the regions of Sicily and Calabria prospective
locations of business such that the forecasted traffic figures could be
generated only after strengthening regional economic power.
This example illustrates an old chicken-egg problem of regional and
transportation science, as to whether a transport investment should
come first to foster regional development, or the regional development
is a pre-condition for a successful transportation investment. Most
economists agree that transportation investment as such will not au-
tomatically boost the economy. Either there has to be a latent factor
potential, which can be explored by the transport facility (as in the case
of the Bosporus, Tagus or Oeresund fixed links), or the transportation
29
This is a main message of New Macro-economic theory, as has been de-
veloped by Malinvaud (1977) and others: In the course of business cycles an
economy can switch between different employment regimes. This concept also
underlies the OECD's macro-economic model NiGEM.
30
This bridge would have the world's widest free span (3.3 km) between the
pillars, the highest pillars (383 m) and the highest challenges for engineers to
construct 4 lanes of motorway and two tracks for railways in a most difficult
natural environment, characterized by high ocean currents, strong winds and
risk of earthquake. The bridge plan was politically agreed and rejected two
times in the past 15 years. It is a prototype for old dreams which come up
periodically and vanish after careful economic checks.
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Transport Policy 75 (2019) A1–A15
investment has to be prepared and accompanied by regional develop-
ment policy.
4.2.7. Alternative comprehensive scenarios
As has been pointed out in section 3.2 policy makers and project
promoters tend to favor an optimistic “EGAP” scenario to clear the path
of legal and political approvals. But the normative issue is to combine
the above listed partial developments in a way that the “most likely”
comprehensive scenario is constructed which has the highest prob-
ability of approaching future reality. There is still a discussion in the
literature whether it makes sense to confront the “most likely” with a
“worst case” scenario. The argument in favor of such a scenario is to
make the maximum risk transparent to the investors or tax payers. The
argument against the numerical characterization of a worst case is that
it will be possible to kill almost every ambitious project plan by a
combination of negative assumptions such that innovative projects
have little chance to survive the first phase of planning. In any case it is
useful constructing alternative scenarios to receive a quantitative base
for the analysis of external risks which cannot be influenced by project
management.
5. Issues for risk and change management
5.1. Risk management
Risks of megaprojects – in terms of probability of occurrence and
severity of impacts - can first be classified through their typology and
secondly through their occurrence in the life cycle of projects
(Rothengatter, 2017a).
Resource input risks can occur when material, preliminary products
or specialized man power are not available on time because of dis-
turbances in the supply chains. For instance, a tunnel boring machine or
premanufactured construction elements (e.g.: tubbings) may arrive
delayed.
Construction risks can have three main causes: First, unforeseen
events can happen like water inrush or collapse of surface over a bored
tunnel,31 second, construction companies may have difficulties with
executing the plans of architects, and third there may occur coordina-
tion failures among several construction companies which are re-
sponsible for different parts of the works.
Market risks reflect the fact that the reactions of the customers on
the demand side cannot be forecasted accurately and can be influenced
by external factors which cannot be controlled by the project man-
agement, as for instance an economic crisis. This is highly relevant for
concession and PPP projects.
Financial risks are widely transparent in the case of private or PPP
finance. Deviations between actual and calculated revenues or changes
of capital market conditions lead to problems, while cost and time
overruns or overestimation of revenues are the main sources of such
risks. In the case of public investment this type of risk is less obvious
because it leads to supplementary claims which are financed by the
public budget.
Environmental risks are frequently reported in the course of pro-
curing and constructing megaprojects. This is mainly due to the fact
that such risks are considered in a late phase of the project planning. In
the case of very long planning and construction time changes of en-
vironmental or safety legacy can occur.
Social risks are dependent on the acceptance of a project by
31
The very busy main Rhine valley railway corridor had to be closed for
almost three months and construction work for the new HSR track is delayed by
two years after the land surface collapsed when the boring machine crossed the
existing rail track near Rastatt (Southern Germany). Direct financial damage is
estimated 0.75 bill. EUR and total economic damage including all indirect ef-
fects 2.2 bill. EUR.
W. Rothengatter
stakeholder groups. If strong groups feel disadvantaged or poorly in-
tegrated into the planning process they may take actions against the
project and disturb its implementation process. Political risks can have
various reasons, as for instance changing regulation legacy, decisions in
favor of parallel public investments, withdrawal of political support
because of the change of ruling parties, or interruptions of construction
because of changed budget allocations.
These risks can occur in different phases of the project life cycle:
The planning phase consists of early design, generation of basic
alternatives and final design for the favored alternative. All kinds of
risks will have to be considered in this phase – naturally with a low
level of specification in the early phase - because it is relatively easy to
develop technical, architectural design alternatives or economic con-
cepts.
In the procurement phase the most important decisions are taken
with respect to risk allocation. The basic governance alternatives are
private concession companies, PPPs or public enterprise concepts. All
alternatives include decisions on risk allocation, in the case of private
concessions the state can give guarantees to limit financial risks, PPP
constructions presuppose clear contracts on sharing risks of several
types while in the case of public enterprises the risks are covered by the
state, except for tendered construction work. In this phase a project has
not reached the point of no return such that a detailed analysis on in-
ternal and external risks and their control can provide the basis for a
final decision on continuation or re-designing/termination of the pro-
ject.
The procurement decisions strongly determine the way of risk al-
location in the construction phase. Private companies can take the role
of general contractors for final planning design and construction work.
Public project companies can be established which are led according to
private management principles. In the case of megaprojects also prin-
ciples of tendering play a role for risk management because the general
rule of preferring the cheapest bidder might increase risk of delays and
supplementary claims if the low-cost bidders fail or go bankrupt.
It will become evident in the operation phase whether planners and
construction companies have delivered low quality at low cost or high
quality which leads to lower operation and maintenance costs.
Establishing concession companies or PPPs can allocate this risk to
private investors. The main risks occurring in this phase relate to the
market (demand volume) and to the financing (change of interest rate,
low revenues in the start-up phase).
Fig. 2 exhibits the types of risk in different phases of the project life
cycle and indicates the necessary intensity of risk treatment. The figure
demonstrates that it is most important to start with risk management in
an early phase of planning and procurement. The change of design and
construction components is relatively easy in this phase while the scope
for such changes reduces and the costs increase drastically after con-
struction start.
This overview illustrates the proposition that risk management for
megaprojects is not a job for a task force which starts activities when
problems are observed and signaled (e.g. by traffic light colors on the
Fig. 2. Type of Risk in the Life Cycle Phases.
Darkness of cells indicate the importance of risk treatment.
Source: Rothengatter, 2017a.
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Transport Policy 75 (2019) A1–A15
screen as applied in simple planning software apps). The main part of
risk management is precautionary, anticipating the main sources of
problems and taking measures to reduce the probability of risk occur-
rence and the expected severity in every step of the project cycle. It is
essential in every phase of the life cycle to categorize the risks into
internal and external risks. Internal risks relate to the project and its
management (e.g. construction risks) while external risks cannot be
influenced by project management (e.g. economic crisis; political de-
cisions). In every phase a risk analysis will be necessary to check
whether the internal risks are under control and the external risks can
be ring-fenced, e.g. through contractual arrangements with the state or
with investors.
5.2. Change management
As megaprojects need very long time for planning and construction
it is natural that changes of the original plans become necessary during
the implementation cycle. This can be caused by change of demand
(e.g. higher growth in travel demand in the case of an airport project),
demand structure (more low-cost passengers than expected), new
technology (baggage handling), new requirements for feeder service,
environmental protection, safety requirements or political needs.
If the project management is not prepared to react appropriately to
such changes the project can run into a chaotic disaster in the con-
struction phase, as the Berlin airport project illustrates (Gerkan, 2013).
In this prominent case the changes were not caused by necessary re-
actions to external unexpected events but rather by political pressure to
change major key performance criteria which had been only vaguely
defined in the early planning phase. In this context the London Olympic
Games in 2012 are often mentioned among the positive examples for
change management. The project managers, supported by experienced
consultancies, were able to react quickly to every new performance
requirement, and confronted the political side immediately with the
additional costs and time needed.32 This reduced the political appetite
for changes and made the remaining changes manageable for planners
and construction firms.
5.3. Instruments to support project and risk management
5.3.1. Mathematical methods
Graph theory has developed a number of basic instruments which
can be applied for better risk control. Processes can be modeled by
nodes, which indicate a state of the process, and arcs which model the
length or the costs for a process between two states. Gantt diagrams,
PERT charts and Petri nets are the most applied tools. They make visible
the critical path of steps and help to identify changes which lead to a
revision of the original plan.
Other methods aim at making explicit the uncertain nature of
variables and at estimating the magnitude of risk numerically (see
Anand, 1993). One example is the Monte Carlo simulation which
constructs probability distributions of results from numerous re-
peated calculations with possible values of the random variables
(assuming a typical probability distribution for every random vari-
able). Such approaches are widely applied in corporate finance and
lead to statistical figures, which characterize the probability of de-
viating from expected values. Authors like Flyvbjerg et al. (2015)
suggest using probability variables for cost and key performance
indicators instead of deterministic figures for assessing megaprojects.
This presupposes that there is information available on probability
distributions for such variables. It may also be possible to use data
from similar projects (“reference cases”) to construct a range of costs
and time needed for critical steps. While every megaproject can be
32
As reported by K. Grewe, Jacobs Consultancy Inc., to the German
Government Reform Commission on Large Projects. March 25. 2015.
W. Rothengatter
regarded unique as an ensemble of components, several major
components might be found in other projects world-wide and a
component comparison on an international scale can give informa-
tion on critical factors and processes.
Chan et al. (2018) suggest a risk evaluation model which is based on
fuzzy set theory. The method starts with an analysis of risk criticality,
which strongly relates to emerging and developing economies in Asia
and Africa and is based on an expert questioning with respect to
probability and severity of risk. The algorithm ends with the con-
struction of a comprehensive risk index. The model is applied to the
assessment of a PPP procurement for the HongKong Zhuhai-Macao
Bridge project. The outcome is 4.53 out of 5 (the maximum of the risk
scale) such that a clear warning is given against the PPP procurement of
the project. Similar approaches have been published in particular in the
context of Chinese megaprojects (see e.g. Ke et al., 2011; Osei-Kyei and
Chan, 2017).
The Taiwan HSR project (see section 2, Table 2) provides a positive
example for the outcome of risk and critical factor evaluations (Chou
et al., 2012). The statistical analysis of expert ratings gives clear results
for the most important drivers, the critical success factors and the op-
timal risk allocation between public and private parties. They confirm
the common-sense insight that the risks associated with land acquisi-
tion, law and regulation or reliability of external factors should be al-
located to the state while risks associated with efficient service supply,
control of operation costs or technological challenges will better be
allocated to private partners.
5.3.2. Information systems
Building information systems (BIM) have developed as a most
important support tool for architects, planners, construction and
consulting companies (see Azhar, 2011). BIM started from 2D CAD
drawings, was extended to 3D computer representations of objects
with seamless zooming from macro to micro views and can be ex-
tended to include further “dimensions” of modeling such as time
scheduling, cost control, design variations and sustainability analysis.
It combines computer aided design with data management, visuali-
zation, time control, cost calculations and links to further manage-
ment and evaluation tools. Such tools can support the organization of
the supply chain, optimization of parallel and sequential work pro-
cesses, or testing alternatives to solve upcoming problems. BIM al-
lows for a fast testing of the impacts of design changes on construc-
tion time and cost. This important feedback may on the one hand
reduce the demand of political stakeholders for major design changes
before and during construction. On the other hand, BIM allows for
higher flexibility for necessary changes and adjustments which im-
prove efficiency.
BIM is applied in many countries and is mandatory in some coun-
tries like U.S. or Singapore.33 It can be developed to become the data
master model with links to all information stemming from decision
support methods in the life cycle of megaprojects (see Fig. 3). The
central management of big data by BIM or similar tools requires clear
arrangements for data ownership, privacy, access control and allocation
of management competence.
5.3.3. Conflict resolution arrangements
In the case of megaprojects several big and hundreds of smaller
players have to be coordinated. If something goes wrong, then often
serious conflicts and finger pointing arise and parties go to court if they
feel disadvantaged or want to protect their rights. In democratic
countries this can interrupt the progress for several years and cause big
difficulties with forming new teams of companies. Therefore, it is im-
portant to anticipate potential conflicts from the beginning, to make
33
http://www.gsa.gov/bim. http://www.corenet.gov.sg/integrated_
submission/bim/bim_guide.htm.
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conflict settling rules part of tenders and clearly define the expected
behavioral attitudes of involved parties in the contracts. This requires
an appropriate design of the legal arrangements, as for instance the
establishment of adjudication committees and their acceptance by the
contracting parties.
6. Governance, legacy and finance
Megaprojects are on the one hand characterized by high public in-
terest involved and need major public governance to solve political,
legal and financial problems. On the other hand, transportation infra-
structure serves as an input for commercial businesses and its provision
should follow economic efficiency principles. Therefore, principle agent
problems are arising with every megaproject in transportation and their
solution is a key for success or failure. Concession companies, as in the
case of the French Millau bridge or Spanish, Italian or French motor-
ways, allocate the responsibility for building, financing and operating
widely to private or semi-private enterprises while the state is deciding
on design principles, procurement rules and regulating the user prices
to control monopoly. PPPs show a wide variety of private responsi-
bility. While a part of financing, building and maintaining tasks are in
general allocated to private investors, it may be that the state provides
the current revenues and state-owned enterprises will operate the
project. In particular after the economic crisis 2008 such “availability-
based” PPPs have increased while the “revenue-based” PPPs have
drastically declined.
When it comes to the question as to which type of governance has
shown the best performance there are no clear answers if the whole
range of performance criteria is considered. If the list of criteria is re-
duced to time and cost discipline then the EU study BENEFIT (2016)
reveals that concession projects and revenue-based PPPs show a better
discipline with respect to time and costs, on average. Public projects
often show low cost discipline if local or regional government decide on
project design and management, while the federal government is re-
sponsible for the major part of finance. The Boston Big Dig and many
other urban freeway or public transit projects with major federal co-
finance have “derailed”, using the wording of Altshuler and Luberoff
(2003).
Interplay of legal rules and protection of citizen's rights play a big
role in democratic countries. In the EU, environmental groups have the
right to raise appeals at every stage of the planning process34 which
means that they can intervene even if the plan is mature and has con-
sidered all points which stakeholders have brought forward in the
previous stages. Also, serious conflicts between public agencies can
occur as the example of the San Francisco-Oakland bridge demonstrates
(see section 2). Regulations and permitting processes may concern
different levels of public administration for which different legacy is
relevant such that time consuming coordination activities are necessary
which reduce the efficiency of planning and procurement. In the case of
border crossing transportation projects the different national legacies
have to be considered, which refers to design elements, environmental
and safety protection and the regulations for rolling stock (this was a
problem with the Channel Tunnel project when the insight came up in a
late phase that the regulations for fire protection with rolling stock are
different in the U.K. and in France).
As the megaprojects in centrally governed countries like in the
Emirates seem more successful with respect to time and cost overruns
while planners, architects, construction companies and consultants
come from countries, which are low-performing with this respect (e.g.
U.S. or Europe), it is worthwhile to look at the governance patterns
34
According to a judgement of the EU Court of Justice it is not possible to
impose time restrictions on environmental objections, stopping the previous so-
called „preclusion“ practice of administrations and underlining that it ranks the
rights of citizens higher than the planning efficiency of organizations.
W. Rothengatter
Fig. 3. Building information modeling as a central data management system.
Source: Own summary of Reformkommission (2015).
applied in those countries. A clear allocation of competences and re-
sponsibilities for architects' design, final planning, construction activity,
or project internal and external controlling is a pre-condition for suc-
cessful governance. In centrally governed regimes such type of effective
governance can be implemented without major problems stemming
from voting, legal permission and administrative coordination pro-
cesses, or the frequent interference from stakeholder groups. The pro-
blems reported for megaprojects in de-centrally organized democratic
countries can be interpreted in a way that some price has to be paid for
the democratic ways of decision making, but they can also be inter-
preted as risk premiums to insure against mega-failures of centrally
taken decisions.
The aspect of finance plays an important role insofar as public fi-
nance is available at low capital costs but often limited through budget
constraints and budgeting rules as for instance the principles of an-
nuality and specificity. Public finance can be extended by development
banks (e.g. European Investment Bank, Asian Development Bank, Latin
American Development Bank), which give loans at fixed interest rates,
to be paid back by the states. The European Union is most interested in
developing their TEN-T plans and offers a host of financial instruments,
such as grants, loans, loan guarantees, project bonds, and others (see
Schade et al., 2013; Doll et al., 2015). This can increase the speed of
investments on the one hand, but on the other hand it creates incentives
to over-design projects if the expected co-finance is high (up to 80% for
eligible components of TEN-T projects in “cohesion” countries).35
The problems of governance, regulation and finance illustrate why
planning processes in de-centrally governed democratic countries are
more difficult and projects can become more expensive compared with
similar undertakings in centrally governed regimes. But the observed
inefficiencies of planning don't occur by natural law and it is possible to
reform and streamline regulation, coordination and permission pro-
cesses on the one hand while ensuring on the other hand a widely
undisturbed implementation after a decision has been taken (see the
Swiss example in section 7).
35
One example is the initiative to extend the planned HSR project „Rail
Baltica“ (from Poland to Estonia) through a tunnel between Talinn and
Helsinki, connecting areas of low-density (50 km; ca. 9–13 bill. EUR).
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7. Mediation, participation
In democratic countries megaprojects cannot be realized without a
wide acceptance of citizens. But it is obvious that not all groups receive
advantages and that some of them strictly oppose megaprojects. If
stakeholder groups are not integrated from the beginning, then conflicts
may arise when construction is started – sometimes with the con-
sequence of violent protests as in the case of the Stuttgart 21 project.
Therefore, gaining majorities in the parliaments is not enough to solve
such conflicts in democratic decision processes. But there is no royal
road to solve such problems and different solutions have developed
which stem from different historical backgrounds.
Switzerland is a country with rich experience for a de-centralized
exercising of people's power. Long-term transportation investment
plans together with their financial plans have to be agreed by people's
referendum. As megaprojects are integral parts of these comprehensive
plans this broadens the discussion because it is not restricted on pros
and cons for a single megaproject but rather refers to the whole pro-
gram. Furthermore, other projects or actions can be integrated into the
program which are advantageous to groups that don't benefit from a
specific megaproject.
Switzerland is a relatively small country with about 8.4 mill. in-
habitants. In larger countries the question arises whether a referendum
on the national level makes sense; a project in California has little in-
fluence on the states in the U.S. East Coast. Therefore, state, regional or
city referendums might be a preferred solution to settle conflicts be-
tween stakeholder groups or public agencies – depending on the geo-
political importance of the project. In any case project-related media-
tion processes should be started in an early phase when project
alternatives can be developed and compared. If people have the feeling
of being actively involved into the development process, they may think
more positively about a project. Continuous information about the
project progress has meanwhile become a “must” and positive examples
like the construction of the Vienna Central Railway Station36 show that
beyond all difficulties arising with higher cost estimates (cost overrun:
36
In Vienna two old terminals at former South Station were replaced by a
modern main through-bound station, opened in 2015. The station is integrated
into a city development project in this area.
W. Rothengatter
138%) the affected population feels well informed and is widely sup-
porting the project – contrasting the Stuttgart underground railway
station example where the Mayor prevented a public voting on the
project and information on serious problems was withheld until the
point of no return was reached.
8. Conclusions
Megaprojects provide many challenges for planners, constructers,
managers and policy makers because of their volume, complexity and
expected sublimes. There are a number of examples for failures re-
ported in the literature which often are quantified by proxy criteria like
time and cost overruns. The scientific analysis using such aggregate
proxies is necessary and brings more transparency into a decision area
on which the main players are often not willing to give full information
on all details. But the critical conclusions followed from this type of
analysis should not be misinterpreted as warnings against megaprojects
as such. Failures with megaprojects are not occurring by natural or iron
law.
First of all, there are not only negative cases but also a number of
large transportation projects which have been planned, implemented
and operated successfully. Secondly, innovative projects, which have
shown large cost overruns during construction, can develop successfully
in later phases and be characterized as successful in a historical view, as
for instance the large canal projects of Suez or Panama. Thirdly, the
mainly chosen criteria of time and cost overruns are too narrow to
classify megaprojects as successes or failures. Megaprojects can induce
wider economic impacts, improve environmental quality and climate,
and contribute to a balanced development of regions. This can reduce
social – including intergenerational - conflicts and generate in this way
indirect economic benefits. Thus, the evaluation criteria for measure-
ment performance will have to be extended.
Furthermore, step changes of performance for transportation ser-
vices require the courage to invest in megaprojects and to tackle the
associated problems of uncertainty. It can be expected that the 4th in-
dustrial revolution, i.e. the forthcoming cycle of digitalization in pro-
duction and human life, will provide big changes in the transport sector
(as early anticipated by Freeman and Louca, 2002). Assistant systems,
automated driving, automated freight processing and new transporta-
tion systems as for instance Hyperloop, air taxis or robots for parcel
service will become reality and require major investments into the in-
frastructure. A bigger failure than over-running the cost planned for a
megaproject could be behaving completely risk averse by restraining
the infrastructure development to small projects which preserve the old
technology. Future oriented investment requires leaving path-de-
pendency and locked-in strategies which hinder innovation (see Geels
and Schot, 2007).
But we can learn from previous experience that not every mega-
project supports innovative technology paths and not every mega-
project brings a progress to the environment or to regional balance.
This means the term “mega” neither indicates “good” nor “bad”.
Therefore, the methodologies to evaluate megaprojects in the context of
comprehensive transportation plans have to be further developed and
the opportunity costs for large projects or investment programs will
have to be analyzed critically, making the alternative options for
achieving the underlying sustainability goals transparent. The chal-
lenge is not to avoid megaprojects but to improve on their account-
ability.
List of abbreviations
bcr benefit-cost ratio
BIM building information modeling
CAD computer-aided design
CBA cost-benefit analysis
CGE computed general equilibrium model
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EIA environmental impact assessment; ETCS European Train
Control System
EUR € Euro
Ffr French Franc
GDP gross domestic product
HSR high-speed rail
IAM integrated assessment model
IPCC intergovernmental panel on climate change
MAGLEV magnetic levitation system
MoT Ministry of Transport
OECD Organization for Economic Cooperation and Development
PPP public-private partnership
RMB Renminbi
SCGE spatial computed general equilibrium model
SEA strategic environmental assessment
Sfr Swiss Franc
TEN-T Trans-European Network - Transportation
US$ U.S. Dollar
WEI wider economic impact
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