A Risk-Based Cost Contingency Estimation Model for Infrastructure Projects

摘要

Cost overrun of infrastructure projects is widespread and represents significant financial risks to stakeholders. The cluster analysis on the data of 41 commonly cited causes identified four dimensions of causes: scope changes, market and regulatory uncertainty, inadequate planning and control, and unforeseen circumstances. Subsequently, these four dimensions were then used to develop a risk-based cost contingency estimation model (RBCCEM) to improve the accuracy of cost contingency estimation which was then validated using a bootstrapping approach. The accuracy of the cost estimation measures was used to compare RBCCEM with other methods, namely fixed cost contingency, reference class forecasting, and a hybrid method. The findings suggested that RBCCEM could be more accurate as the error decreased by 10%. As a result, RBCCEM produces contingency estimates that are more consistent and brings project costs closer to actual costs than alternative approaches, such as reference class forecasting (RCF).