Squandering public funds for a handful of people

Description

"Metros seem to get very special treatment in the hope that they will magically solve all our urban traffic and congestion problems. But we are not alone in overestimating the benefits and underestimating the costs. Professor Bent Flyvbjerg and his colleagues (Department of Development and Planning, Aalborg University, Denmark) studied 258 transportation infrastructure projects around the world and concluded that “…the cost estimates used in public debates, media coverage, and decision-making for transport infrastructure development, are highly, systematically and significantly deceptive. So are the cost benefit analyses into which cost estimates are routinely fed to calculate the viability and ranking of projects. The misrepresentation of costs is likely to lead to the misallocation of scarce resources, which, in turn, will produce losers among those financing and using infrastructure, be they taxpayers or private investors.” They do not think these errors occur by chance and are categorical that “Cost underestimation cannot be explained by error and seems to be best explained by strategic misrepresentation, that is, lying.” They also found that these errors were the highest in metro projects."