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Adam Abdulwahab Evaluation network meeting Brussels, 21 September 2009

Adam Abdulwahab Evaluation network meeting Brussels, 21 September 2009. Ex post evaluation of cohesion policy programmes 2000-2006 co-financed by the European Fund for Regional Development (Objective 1 and 2) Work Package 10 “ Efficiency: Unit Costs of Major Projects ”. Overview of ToR - 1.

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Adam Abdulwahab Evaluation network meeting Brussels, 21 September 2009

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  1. Adam Abdulwahab Evaluation network meeting Brussels,21September 2009 Ex post evaluation of cohesion policy programmes 2000-2006 co-financed by the European Fund for Regional Development (Objective 1 and 2) Work Package 10 “Efficiency: Unit Costs of Major Projects”

  2. Overview of ToR - 1 • Scope: sample of ERDF major projects • Task 1: Literature review • Task 2: Infrastructure projects • Definition of “units” • Estimated unit costs and completion times • Actual unit costs and completion times • Analysis of cost overruns and time delays • Role of ex ante risk assessment

  3. Overview of ToR - 2 • Task 3: Productive investment projects • Costs of job created • Comparability of different cost per job figures • Estimated costs of jobs created • Actual costs of jobs created • Task 4: Spreadsheet • Indicative benchmark ranges • Tool for further data input

  4. Practical Limits • Data availability => smaller sample (altogether 96 projects) • Data quality • Difficulty of determining costs of components • Variations are higher than expected • Reasons: • Modifications of projects • Projects were not necessarily monitored in same structure as they were approved

  5. Results of Literature Review • No public unit cost database • One exception: ROCKS (World Bank) only roads and very limited European relevance • No generally agreed definitions of unit costs for infrastructure projects • Widespread “Optimism Bias” • Job creation costs are determined only for (active) labour policy interventions

  6. Sector snapshot - Rail • Cost range (literature): 2.8 to 8.6 mEUR/km • Sample • Project length: 8.9 km to 1,435 km • Unit cost: 0.3 to 49 mEUR/km • Main reasons for cost overruns: environmental issues, statutory authorities, work suspensions • Main reasons for delays: funding and construction

  7. Sector snapshot - Roads • Cost range (literature): • Single carriageway: 0.7 to 2.0 mEUR/km • Dual carriageway: 2.7 to 8.7 mEUR/km • Dual carriageway, 3-lane: 36.4 to 91.3 mEUR/km • Sample • Project length: 5.3 km to 144.2 km • Unit cost: 1 to 50 mEUR/km • Main reasons for cost overruns: design complexity, environmental issues, statutory authorities • Main reasons for delays: site preparation and construction

  8. Sector snapshot – Urban transport • Cost range (literature): • Metro: 27 to 300 mEUR/km (highest: 483 mEUR/km) • Tram: 2.5 to 64 mEUR/km • Sample • Project length: 4 km to 22 km • Unit cost: 5 to 120 mEUR/km • Main reasons for cost overruns: permits/consents, procurement factors • Main reasons for delays: funding and planning

  9. Sector snapshot – Water & Wastewater • Sample not comparable to literature • Cost range (literature): • Water treatment: 100 to 3800 EUR/m3/day • Water supply: 370 to 6800 EUR/m3/day • Sample (relative homogeneity) • Project length: 85 km to 94 km • Unit cost: 0.75 to 2.11 mEUR/km • Main reasons for cost overruns: design changes • Main reasons for delays: site preparation, funding, permits/consents

  10. Productive Investment Projects • Difficulty to determine employment effects • Mainly determined by • Capital/labour ratio of industry • Technological characteristics • Decision based on CBA not on job creation  Measuring cost of jobs creation is futile and will be discontinued

  11. Thank you for your attention

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