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FP6

EVA-TREN — Result In Brief

Project ID: 22734
Funded under: FP6-POLICIES
Country: Italy

Cutting the cost of a united Europe

Using major transport and energy infrastructure projects as a yardstick, a European project has come up with a recipe to avoid common pitfalls in policy and planning.
Cutting the cost of a united Europe
Trans-European networks (TENs) are large infrastructure systems of transport, energy and telecommunications that are helping to make the goals for unity of the EU a reality. Together it is hoped they can help the social and economic integration of the continent and the development of less well off areas of Europe. Notable examples of TENs include a Warsaw motorway ring road and five billion euros' worth of high-speed rail projects in Spain.

Planning for any large infrastructure has traditionally been accompanied by in-depth ex-ante studies that help to give an idea of the future impact of newly implemented transport systems. However, how to conduct ex-post analyses based on past performance has been less well explored, to the cost of projects and all stakeholders.

The EU-funded project Eva-tren aimed not only to improve existing ex-ante appraisal methods but to assess large transport and energy schemes through ex-post evaluation. Researchers used standardisation of methods of analysis and set out good practice criteria for policy makers. Altogether, 11 case studies were compared from both ex-ante and ex-post point of view.

Project researchers delivered a critical report of common mistakes and pitfalls in both types of analysis. Major findings emerged on the all-important issue of project cost. Project objectives are crucial and it is important to realise they may change with different stakeholders and over time. This, they found has a profound effect on money spent, particularly where the project has a long decision-making process.

Almost all the projects under review experienced a shortfall in the original cost estimation. Common causes were delays in starting the project and changing project design and environmental requirements, a dynamic area. The most outstanding remedy in the few financially successful projects appears to be adequate project management.

To compound cost overrun, there was an accompanying overestimation of revenue and demand for the project. Reasons include shortfalls of the project and simply not knowing the nature and extent of the competition.

The Eva-tren work can be used to create user manuals and guide independent evaluators to judge the economic viability of any energy or transport project. Large-scale projects will then have more of a chance of delivering what they were supposed to at the best price possible to European coffers.

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