In case you were wondering: Why mega-projects (like the Silver Line) have huge cost overruns.

In an article entitled, "Why Mega-Projects End Up Costing Way More Than Expected," Eric Jaffe, The Atlantic CIties, summarizes some recent research by Brent Flyvbjerg that shows mega-projects consistently and hugely cost more than forecast--and some reasons why.  Here are some excerpts from Jaffe's article with links:

. . . So how did it get to the point where the only thing we can confidently expect from a big infrastructure project is that it will cost way more than expected?

One thing's for sure: the people who predict the cost of urban mega-projects do a terrible job. Several years ago the University of Oxford scholar Bent Flyvbjerg, who's made a career researching mega-project mismanagement, analyzed 258 transportation infrastructure projects from around the world and found that nine in ten exceeded their cost estimates. The overruns were greater on rail projects (Whoops!)  than road projects but averaged 28 percent across the board.

What struck Flyvbjerg most about the problem was how very un-random it was. If people were simply very bad at estimating the costs of huge projects, then one might expect some projects to come in under budget and others over. But an under-budget mega-project is about as rare as a dodo riding a unicorn. Instead, wrote Flyvbjerg and some collaborators in 2002, it's more likely that when it comes to mega-projects, public officials engage in "strategic misrepresentation" — aka lying (emphasis added):

The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.

Flyvbjerg's explanation is no doubt true in some cases, but there's also a less sinister reason why people associated with a project might be bad at predicting its costs. From a psychological standpoint, people are saddled with a cognitive bias that causes them to be unjustifiably upbeat (some might say delusional) about the prospects of their own plans. So they do whatever it takes to get them approved — certain that whatever problems have plagued others in the past will be avoided. . . .

I would add one point not included in the article:  Standard engineering modeling techniques do not--and I think "can not"--capture all the complexities of a major construction project, especially one that is relatively novel.  Hence, the Phase 1 Silver Line costs hugely exceeded forecasts while Phase 2 (with the experience of Phase 1 behind them) looks like it may come in relatively close to cost forecasts--but that's not yet certain.

How much does this sound like the Metrorail Silver Line?  It was forecast in 2004 to cost less than $2 billion; now the projected cost stands at $6 billion.  And, of course, DTR users will be picking up more than half the cost.