Decision Making on Mega Projects
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Decision-Making on Mega-Projects TRANSPORT ECONOMICS, MANAGEMENT AND POLICY Series Editor: Kenneth Button, Professor of Public Policy, School of Public Policy, George Mason University, USA Transport is a critical input for economic development and for optimising social and political interaction. Recent years have seen significant new developments in the way that transport is perceived by private industry and governments, and in the way academics look at it. The aim of this series is to provide original material and an up-to-date synthesis of the state of modern transport analysis. The coverage embraces all conventional modes of transport but also includes contributions from important related fields such as urban and regional planning and telecommunications where they interface with transport. The books draw from many disciplines and some cross disciplinary boundaries. They are concerned with economics, planning, sociology, geography, management science, psychology and public policy. They are intended to help improve the understanding of transport, the policy needs of the most economically advanced countries and the problems of resource-poor developing economies. The authors come from around the world and represent some of the outstanding young scholars as well as established names. Titles in the series include: Structural Change in Transportation and Communications in the Knowledge Society Edited by Kiyoshi Kobayashi, T.R. Lakshmanan and William P. Anderson Competition in the Railway Industry An International Comparative Analysis Edited by José A. Gómez-Ibáñez and Ginés de Rus Globalized Freight Transport Intermodality, E-Commerce, Logistics and Sustainability Edited by Thomas R. Leinbach and Cristina Capineri Decision-Making on Mega-Projects Cost–Benefit Analysis, Planning and Innovation Edited by Hugo Priemus, Bent Flyvbjerg and Bert van Wee Port Privatisation The Asia-Pacific Experience Edited by James Reveley and Malcolm Tull The Future of Intermodal Freight Transport Operations, Design and Policy Edited by Rob Konings, Hugo Priemus and Peter Nijkamp North American Freight Transportation The Road to Security and Prosperity Mary R. Brooks Decision-Making on Mega-Projects Cost–Benefit Analysis, Planning and Innovation Edited by Hugo Priemus Professor of System Innovation and Spatial Development, Delft University of Technology, The Netherlands Bent Flyvbjerg Professor of Planning, Aalborg University, Denmark and Chair of Infrastructure Policy and Planning, Delft University of Technology, The Netherlands Bert van Wee Professor and Head of Transport Policy and Logistics, Delft University of Technology, The Netherlands TRANSPORT ECONOMICS, MANAGEMENT AND POLICY Edward Elgar Cheltenham, UK • Northampton, MA, USA © Hugo Priemus, Bent Flyvbjerg and Bert van Wee 2008 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited Glensanda House Montpellier Parade Cheltenham Glos GL50 1UA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Career choice in management and entrepreneurship : a research companion / edited by Mustafa F. Özbilgin, Ayala Malach-Pines p. cm. Includes bibliographical references and index. 1. Career development. 2. Vocational guidance. 3. Management. 4. Entrepreneurship. 5. Master of business administration degree. I. Özbilgin, Mustafa. II. Malach-Pines, Ayala. HF5831.C2651435 2007 658.0023—dc22 2007011684 ISBN 978 1 84542 737 5 Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall Contents List of contributors vii Acknowledgements x 1. Introduction: scope of the book 1 Hugo Priemus, Bent Flyvbjerg and Bert van Wee PART I MANAGEMENT CHARACTERISTICS AND COST–BENEFIT ANALYSIS 2. Management characteristics of mega-projects 23 Hans de Bruijn and Martijn Leijten 3. Ex-ante evaluation of mega-projects: methodological issues and cost–benefit analysis 40 Bert van Wee and Lóránt A. Tavasszy 4. Cost–benefit analysis and the wider economic benefits from mega-projects 66 Roger W. Vickerman 5. Mega-projects and contested information 84 Hans de Bruijn and Martijn Leijten PART II PLANNING AND DECISION-MAKING 6. How to improve the early stages of decision-making on mega-projects 105 Hugo Priemus 7. Public planning of mega-projects: overestimation of demand and underestimation of costs 120 Bent Flyvbjerg 8. Evolving strategy: risk management and the shaping of mega-projects 145 Roger Miller and Donald R. Lessard 9. How to overcome major weaknesses in mega-projects: the Norwegian approach 173 Knut Samset v vi Contents 10. Public–private partnership and mega-projects 189 Joop Koppenjan PART III INNOVATION, COMPETITION AND INSTITUTIONS 11. Innovations in the planning of mega-projects 215 Werner Rothengatter 12. The cost of the technological sublime: daring ingenuity and the new San Francisco–Oakland Bay Bridge 239 Karen Trapenberg Frick 13. Provision and management of dedicated railway systems: how to arrange competition 263 Didier van de Velde and Ernst F. ten Heuvelhof 14. Rail infrastructure at major European hub airports: the role of institutional settings 281 Moshe Givoni and Piet Rietveld 15. Drawing institutional lessons across countries on making transport infrastructure policy 304 W. Martin de Jong Index 327 Contributors Hans de Bruijn is Professor of Public Administration at Delft University of Technology, The Netherlands. His research is on processes of decision- making, in which many mutually dependent actors are involved, with different interests. He is involved in the development of concepts regarding this multi-actor decision-making and in applying it to numerous areas, e.g. large infrastructural projects, law enforcement, the relation between man- agement and professionals, environmental policy and privatisation. His most recent book is Managing Performance in the Public Sector (Routledge, 2007). Bent Flyvbjerg is Professor of Planning at Aalborg University, Denmark and Chair of Infrastructure Policy and Planning at Delft University of Technology, The Netherlands. He is Founder and Director of Aalborg University’s research programme on large-scale infrastructure planning. His books include Megaprojects and Risk (Cambridge University Press, 2003, with Nils Bruzelius and Werner Rothengatter), Making Social Science Matter (Cambridge University Press, 2001) and Rationality and Power (The University of Chicago Press, 1998). Karen Trapenberg Frick is a Lecturer at the University of California, Berkeley, USA, in the Department of City and Regional Planning and teaches courses on transportation planning, policy and finance. She also is a post-doctoral Research Scholar at the University of California Transportation Center. Moshe Givoni is a Marie Curie Fellow at the Department of Spatial Economics, Free University, Amsterdam. He gained his PhD at the Bartlett School of Planning, University College London. His academic back- ground also includes degrees in Economics (BA), Geography (BA) and Business Administration (MBA), from Tel-Aviv University, Israel. His main research interests relate to air and rail transport.0 Ernst F. ten Heuvelhof (Chair Public Management) is a Professor at the Department of Technology, Policy and Management of Delft University of Technology and at the Department of Public Administration of Erasmus University in Rotterdam, The Netherlands. His main research interests are the management of complex decision-making processes; and liberalisation, privatisation and internationalisation of network-based vii viii Contributors industries. He is Scientific Director of the Bsik research programme Next Generation Infrastructures. W. Martin de Jong is Associate Professor of Policy, Organisation and Management at the Faculty of Technology, Policy and Management, Delft University of Technology, The Netherlands. He publishes and teaches on issues of cross-national institutional comparison, cross-national lesson- drawing, transport infrastructure planning and evolutionary approaches to the administrative sciences. Joop Koppenjan is Associate Professor at the Faculty of Technology, Policy and Management of the Delft University of Technology, The Netherlands. His research topics include policy networks, decision-making, implemen- tation, privatisation and public–private partnerships. Donald R. Lessard is the Epoch Foundation Professor of International Management at the MIT Sloan School of Management, USA. His research interests are project management and global strategic management, with an emphasis on managing in the face of uncertainty and risk. He currently teaches courses on global strategy and organisation, and global strategy in the energy sector. Lessard is also the Faculty Director for the BP–MIT Projects Academy, a major executive education programme for major project leaders that spans management and engineering. Martijn Leijten is a Researcher at the Faculty of Technology, Policy and Management of Delft University of Technology, The Netherlands. His research focuses on multi-actor systems, in particular in the management of complex infrastructure projects. In 2004 he worked for the Dutch Parliamentary Committee on Infrastructure Projects. Roger Miller is the Jarislowsky Professor of Innovation and Project Management at École Polytechnique in