TSSP 22nd Annual Conference o f the Transportation Science Society of the Philippines 201 4 Iloilo City, Philippines, 12 Sept 2014 The Panay-Guimaras-Negros Bridge Project: An Assessment Nicanor R. ROXAS, Jr. Alexis M. FILLONE Graduate Student Associate Professor Civil Engineering Department Civil Engineering Department De La Salle University De La Salle University 2401 Taft Avenue, Manila 2401 Taft Avenue, Manila E-mail:
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[email protected] Abstract: Studies have shown that enormous transportation infrastructure projects recurrently underperform when actual cost and benefits are compared to the forecasts utilized in project proposals. The projected costs have been shown to be commonly underestimated while forecasted demand, overestimated. In this research, an ambitious project in the Western Visayas Region is assessed. The Panay-Guimaras-Negros Bridge Project intends to connect the islands via inter-island bridges that span a length of approximately 23 km. In this study, the PGN project is placed in the distribution of previously completed projects of the same scale and lessons are drawn from their experience. Moreover, Reference Class Forecasting is tackled in order to improve risk assessment in transportation infrastructure project proposals. If project proponents wish to reduce the level of risk from 50% to 20%, then a 12.4 billion to 29.7 billion Peso increase in the proposed budget should be added in order to avoid cost overrun. Key words : Forecast Inaccuracies, Reference Class Forecasting, Cost Underestimation 1. INTRODUCTION The Philippines is a developing country which needs to make an efficient use of its resources. According to the Department of Budget and Management of the Philippine government, a total of 213.5 billion pesos or approximately 10% of the 2.265 trillion 2014 national budget is allocated to the Department of Public Works and Highways.