Assessing evidence of Cognitive Biases in the estimation of costs associated with the delivery of major road transport Infrastructure Projects in Ireland

This dissertation has examined if cognitive biases have had an impact on the accuracy and reliability of cost estimates and forecasts produced for road transport projects in Ireland. The bias which is believed to have the most effect on cost forecasts is that of overconfidence and is generally referred to as optimism bias. This overconfidence may lead to risk and other project costs being underestimated. The focus of this research is on the construction cost forecasts for road transport projects which have been delivered by the National Roads Authority (NRA) in Ireland. A review of the literature associated with cost overruns and optimism bias has been undertaken. This review has shown that overconfidence by project managers can be mitigated and offset by several means using relevant historical data from completed projects. The dissertation has analysed both quantitative and qualitative data to determine if cost forecasts and budgets are exceeded at the completion stage and has examined the causal factors for these cost increases. A new detailed coding framework has been developed to analyse and assess cost management issues and the causal factors associated with additional or increased costs. The results of the quantitative analysis have not indicated any evidence of systematic cost overruns. The risk contingencies applied have been found to be appropriate to these types of projects. Most of the risks which materialised during the construction stage were known and could be assessed using statistical probability. The qualitative data and analysis give an insight into the ‘actuality’ of project delivery and describe the many reasons why costs can change over the full lifecycle of a road transport project