Too Cautious? Avoiding Risk in Transportation Project Development

Abstract

The general public perception is that it takes too long and costs too much to get new capacity enhancing transportation projects constructed. In California, previous audits of the California Transportation Department (Caltrans) have consistently identified transportation project development time and cost as overly long and too expensive, where project development includes conducting preliminary engineering, preparing environmental studies, completing final design, and acquiring the necessary permits. These audits have also suggested that the individual project manager greatly influenced project development success, as measured by time and cost. Several of the audits concluded that project managers were simply too cautious in making some of the engineering decisions associated with project development, and this risk-averse behavior was a major factor contributing to inefficient project development. This research explores the relationship between risk averse behavior (i.e., engineering judgment applied to certain types of situational problems) and transportation project development time/cost. We find that risk-averse behavior by project managers does not significantly affect project development time or cost. We further conclude, based on project manager feedback, that the required project development process is simply too rigid and bureaucratic to allow an individual project manager to significantly reduce the time or cost of project development.