Critical Infrastructure Systems

Critical Infrastructures, such as energy, banking, and transport, are an essential pillar to the well-being of the national and international economy, security and quality of life. These infrastructures are dependent on a spectrum of highly interconnected information infrastructures for their smooth, reliable and continuous operation. The field of protecting such Critical Information Infrastructures, or CIIP, faces numerous challenges, such as managing the secure interaction between peers, assuring the resilience and robustness of ...

The evolution process has helped mankind acquire plenty of information and derive enough knowledge from information in all probable fields. The knowledge gained over centuries has, in turn, helped mankind to evolve into a 'technological' being. Yet, it could be stated that "knowledge is free for all, but not all information." The term information means "facts provided or learnt about something or someone" 1 and the term knowledge means "the understanding of someone or something based on the study of facts, descriptions or skills through experience by perceiving, discovering or learning". 2 Therefore, sensitive information such as high-end military technology, business secrets, critical national information, and so on is not to be widely known and, hence, is withheld from circulation.

Cyber-security of Industrial Control Systems (ICSs) is notoriously hard due to the peculiar constraints of the specific context. At the same time, the use of specifically crafted malware to target ICSs is an established offensive mean for opposing organizations, groups, or countries. We provide an overview of the results attained by the Preemptive project to improve the cyber-security of ICSs. Preemptive devised several integrated tools for detection and prevention of intrusions in this context. It also provides a way to correlate many small events giving rise to more significant ones, and shows the whole cyber-security state to the user by means of specific Human-Machine Interfaces.

Since the end of the Cold War, technology advancements have increasingly affected the discipline of Security studies.
Warfare is the first example heartened by technological improvements of the last decade. The race to new technologies and their deployment on the battlefield have affected warfare in all senses. This part will focus on the United States since they have focused their rearmament programmes on the integration of new technologies. In broader terms, the US can be considered as the protagonists of this new warfare era.
The so-called Revolution in Military Affairs is a pioneering theory that began in the United States of America which has focused on how to match a reform in the Army with the new technological improvements. This example is the first evidence to include in my analysis to assess to what extent technology has contributed to change warfare and thus how it has affected Military Security.
The most striking case to assess the relationship (if any) between security and technology is the Pakistan intervention by the US in 2004. In that case, the United States have deployed Unmanned Aerial Vehicles (e.g. the drones) and new technologies on the battlefield. Especially, drones have had optimal results in the battlefield, however they also have “shaken” the public opinion in the US. This gives further reasons to prove that the RMA is still in act but that overall, the relationship between security and technology has some ambiguities.
In the first part of my work, I expect to show not just how the logic and the essence of war has been affected by technology, but also how, in a wider sense, to trace the roots of the relationship between technology and security is possible.
The second part of this work will deal with cybersecurity
Precisely, the case of Edward Snowden and the investigative report of The Guardian are an interesting point of departure to assess how and to what extent technology has affected the practices of surveillance. Through its revelations, Snowden has revealed an ambiguous pattern between the use of information in the hands of the National Security Agency of the United States. The reaction of the public has been ambivalent: American citizens have considered Snowden as a “hero” and as a “traitor”. Overall, this case shows how new technologies have turned the practices of surveillance in an ambiguous area.
The final part would include the case of economic security and the virtual currencies. In particular, Bitcoins can be an example on to what extent a technological improvement can both disturb and support the functioning of world Economy. Bitcoins are a technological advancement for economic security. However, the encryption system by which they work, Blockchain, makes the identity of the purchase almost untraceable. Down to these two features, anonymity and inviolability, Bitcoins can be used by criminals for illegal practices. Therefore, Bitcoins are a further example to emphasise that the relationship between security and technology is ambiguous.

This article shows how and why the issue of critical information infrastructure protection has come to dominate the security political debate, looks at the entire range of threats that seems to confront modern networked societies, sets them into perspective, and finally focuses on obstacles and prerequisites of national and international protection measures.

Esta Guía recoge, en base a mejores prácticas nacionales e internacionales un resumen de recomendaciones para implantar las medidas de seguridad identificadas en los Planes de Protección de Ciberseguridad que consideramos que será de gran interés para aquellas organizaciones interesados en al protección de las infraestructuras críticas y, en especial de los operadores críticos.
Dada la importancia que tienen los sistemas SCADA en este tipo de entornos, se ha incluido un anexo especial dedicado específicamente al aseguramiento de dicho tipo de sistemas.

• Provides a multidisciplinary approach to Cyber Warfare analyzing the information technology, military, policy, social, and scientific issues that are in play.
• Presents detailed case studies of cyber-attack including inter-state cyber-conflict (Russia-Estonia), cyber-attack as an element of an information operations strategy (Israel-Hezbollah,) and cyber-attack as a tool against dissidents within a state (Russia, Iran)
• Explores cyber-attack conducted by large, powerful, non-state hacking organizations such as Anonymous and LulzSec
• Covers cyber-attacks directed against infrastructure such including but not limited to water treatment plants, power-grid and a detailed account on Stuxent"""

This article presents results from the first statistically significant study of cost escalation in transportation infrastructure projects. Based on a sample of 258 transportation infrastructure projects worth US$90 billion and representing different project types, geographical regions, and historical periods, it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. 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.

Megaproject Planning and Management: Essential Readings contains the seminal articles from the growing body of research on megaproject planning and management along with an original introduction by the editor, Bent Flyvbjerg. The leading and most cited authority in the field, Flyvbjerg has used crowdsourcing and 25 years of experience to cherry-pick from several hundred articles and books the writings that define the field. This volume will be an indispensable source for those wishing to speak with authority about how megaprojects are prepared, delivered, and fought over. The target audience is students, academics, practitioners, and media pundits alike, as well as communities affected by megaprojects.

The overarching question of this article is how can we develop a critical understanding of the social place of highways and automobility in the case of a non-capitalist European context such as socialist Albania? Socialism was a period of modernisation for Albania. Part of this modernisation project was the production of a modern built environment, especially infrastructures and urban spaces. Within this context during socialism thousands of miles of new roads were constructed in the country. The remarkably limited use of roads, combined with their systematic building and maintenance, kept this infrastructure’s materiality in a relatively good condition for many decades. Since the early 1990s, though, the end of the regime has signified a period of booming mobility and automobility. Postsocialism and the wider context of neoliberalism have been marked by state withdrawal from many of its previous roles, and the maintenance of basic infrastructures has become increasingly dependent on international aid. Nevertheless, the roads are currently being socially reappropriated and reconfigured, as people embrace automobility, which was a very limited practice during socialism. This article explores the kind of socio-material relationships that road construction and the roads themselves generated in socialist Albania and how these
are linked to postsocialist spatial practices.

Back cover text: Megaprojects and Risk provides the first detailed examination of the phenomenon of megaprojects. It is a fascinating account of how the promoters of multi-billion dollar megaprojects systematically and self-servingly misinform parliaments, the public and the media in order to get projects approved and built. It shows, in unusual depth, how the formula for approval is an unhealthy cocktail of underestimated costs, overestimated revenues, undervalued environmental impacts and overvalued economic development effects. This results in projects that are extremely risky, but where the risk is concealed from MPs, taxpayers and investors. The authors not only explore the problems but also suggest practical solutions drawing on theory, experience and hard, scientific evidence from the several hundred projects in twenty nations and five continents that illustrate the book. Accessibly written, it will be the standard reference for students, scholars, planners, economists, auditors, politicians and interested citizens for many years to come.

In recent years, infrastructure renewal has been a focus of attention in North America and around the world. Municipal and federal authorities are increasingly recognizing the need for life cycle cost analysis of infrastructure projects in order to facilitate proper prioritization and budgeting of maintenance operations. Several reports have highlighted the need to increase budgets with the goal of overcoming the backlog in maintaining infrastructure facilities. This situation is apparent in the case of bridge networks, which are considered vital links in the road network infrastructure. Because of harsh environments and increasing traffic volumes, bridges are deteriorating rapidly, rendering the task of managing this important asset a complex endeavour. While several bridge management systems (BMS) have been developed at the commercial and research level, they still have serious drawbacks, particularly in integrating bridge-level and network-level decisions, and handling extremely large optimization problems.

The article first describes characteristics of major infrastructure projects. Second, it documents a much neglected topic in economics: that ex ante estimates of costs and benefits are often very different from actual ex post costs and benefits. For large infrastructure projects the consequences are cost overruns, benefit shortfalls, and the systematic underestimation of risks. Third, implications for cost–benefit analysis are described, including that such analysis is not to be trusted for major infrastructure projects. Fourth, the article uncovers the causes of this state of affairs in terms of perverse incentives that encourage promoters to underestimate costs and overestimate benefits in the business cases for their projects. But the projects that are made to look best on paper are the projects that amass the highest cost overruns and benefit shortfalls in reality. The article depicts this situation as ‘survival of the unfittest’. Fifth, the article sets out to explain how the problem may be solved, with a view to arriving at more efficient and more democratic projects, and avoiding the scandals that often accompany major infrastructure investments. Finally, the article identifies current trends in major infrastructure development. It is argued that a rapid increase in stimulus spending, combined with more investments in emerging economies, combined with more spending on information technology is catapulting infrastructure investment from the frying pan into the fire.

Increasingly, governments are experimenting with ways to provide public goods by involving the private sector in the planning, financing, building and operating of a range of services, facilities, infrastructure, etc. In the geographical literature on neoliberalism this entanglement of the state and markets has been loosely conceptualized as a process of marketization. This concept describes the insertion of markets or market forces into the state and public sector. In this paper we unpack this concept by highlighting the need to think about a range of marketization processes at play across a range of geographies.

""This article is an ethnographic study of a 29-kilometer stretch of cross-border highway located in South Albania and linking the city of Gjirokaster with the main checkpoint on the Albanian–Greek border. The road, its politics, and its poetics
constitute an ideal point of entry for an anthropological analysis of contemporary South Albania. The physical and social construction, uses, and perceptions of this road uniquely encapsulate three phenomena that dominate social life in postsocialist South Albania: the transition to a market economy, new nationalisms, and massive emigration (mainly to Greece). Taking this cross-border road section as my main ethnographic
point of reference, I suggest the fruitfulness of further discussion of the relationship between roads, narratives, and anthropology.

[roads, globalization, transnationalism, development, postsocialism, materiality, Albania]""

As megaprojects have become ubiquitous, their real benefits and costs have come under increased scrutiny. We interviewed Bent Flyvbjerg, who has extensively studied megaproject development. Flyvbjerg has found systematic problems in the development process: by intentionally misrepresenting information and deliberately disregarding risks, proponents instigate projects that result in fewer benefits and higher costs than promised.

The Supplementary Green Book Guidance on Optimism Bias (HM Treasury 2003) with reference to the Review of Large Public Procurement in the UK (Mott MacDonald 2002) notes that there is a demonstrated, systematic, tendency for project appraisers to be overly optimistic and that to redress this tendency appraisers should make explicit, empirically based adjustments to the estimates of a project’s costs, benefits, and duration. HM Treasury recommends that these adjustments be based on data from past projects or similar projects elsewhere, and adjusted for the unique characteristics of the project in hand. In the absence of a more specific evidence base, HM Treasury has encouraged departments to collect data to inform future estimates of optimism, and in the meantime use the best available data. In response to this, the Department for Transport (henceforth DfT), has contracted Bent Flyvbjerg in association with COWI to undertake the consultancy assignment "Procedures for dealing with Optimism Bias in Transport Planning". The present Guidance Document is the result of this assignment.

The present study examines the driving forces behind smart city implementations. Besides the results of international and European standardization efforts, the importance of holistic approach to cities and the issues of cities as complex systems will also be discussed. Furthermore, the relationship between cyber-physical systems and smart cities will be presented, and finally, certain conclusions will be drawn about the safety and security of smart cities. The urban structures and technological advances presented in this article mark the arrival of the next industrial revolution, which means that these intelligent and smart systems will cover all aspects of life.

"Over budget, over time, over and over again" appears to be an appropriate slogan for large, complex infrastructure projects. This article explains why cost, benefits, and time forecasts for such projects are systematically over-optimistic in the planning phase. The underlying reasons for forecasting errors are grouped into three categories: delusions or honest mistakes; deceptions or strategic manipulation of information or processes; or bad luck. Delusion and deception have each been addressed in the management literature before, but here they are jointly considered for the first time. They are specifically applied to infrastructure problems in a manner that allows both academics and practitioners to understand and implement the suggested corrective procedures. The article provides a framework for analyzing the relative explanatory power of delusion and deception. It also suggests a simplified framework for analyzing the complex principal-agent relationships that are involved in the approval and construction of large infrastructure projects, which can be used to improve forecasts. Finally, the article illustrates reference class forecasting, an outside view de-biasing technique that has proven successful in overcoming both delusion and deception in private and public investment decisions.

This article presents results from the first statistically significant study of traffic forecasts in transportation infrastructure projects. The sample used is the largest of its kind, covering 210 projects in 14 nations worth U.S.$59 billion. The study shows with very high statistical significance that forecasters generally do a poor job of estimating the demand for transportation infrastructure projects. For 9 out of 10 rail projects, passenger forecasts are overestimated; the average overestimation is 106%. For half of all road projects, the difference between actual and forecasted traffic is more than ±20%. The result is substantial financial risks, which are typically ignored or downplayed by planners and decision makers to the detriment of social and economic welfare. Our data also show that forecasts have not become more accurate over the 30-year period studied, despite claims to the contrary by forecasters. The causes of inaccuracy in forecasts are different for rail and road projects, with political causes playing a larger role for rail than for road. The cure is transparency, accountability, and new forecasting methods. The challenge is to change the governance structures for forecasting and project development. Our article shows how planners may help achieve this.

Do different types of megaprojects have different cost overruns? This apparently simple question is at the heart of research at the University of Oxford aimed at understanding the characteristics of megaprojects, particularly in terms of how they are established, run and concluded. In this study, we set out to investigate cost overruns in the Olympic Games. To do so, we examined the costs of the Games over half a century, including both summer and winter Olympics. We looked at the evolution of final reported costs and compared these to the costs established in the Games bids, submitted to the International Olympic Committee (IOC) up to seven years before the Games occurred. In so doing we established the largest dataset of its kind, and documented for the first time in a consistent fashion the costs and cost overruns for the Olympic Games, from 1960 to 2012. We discovered that the Games stand out in two distinct ways compared to other megaprojects: (1) The Games overrun with 100 per cent consistency. No other type of megaproject is this consistent regarding cost overrun. Other project types are typically on budget from time to time, but not the Olympics. (2) With an average cost overrun in real terms of 179 per cent – and 324 per cent in nominal terms – overruns in the Games have historically been significantly larger than for other types of megaprojects, including infrastructure, construction, ICT, and dams. The data thus show that for a city and nation to decide to host the Olympic Games is to take on one of the most financially risky type of megaproject that exists, something that many cities and nations have learned to their peril. For the London 2012 Games, we find that: (1) With sports-related real costs currently estimated at USD14.8 billion, London is on track to become the most costly Olympics ever. (2) With a projected cost overrun of 101 per cent in real terms, overrun for London is below the historical average for the Games, but not significantly so. (3) The London cost overrun is, however, significantly higher than overruns for recent Games since 1999. London therefore is reversing a positive trend of falling cost overruns for the Games.

There is a lack of public awareness about the importance of submarine cable systems, even despite the recent increase in the circulation of visual and geographic information about them. This lack of awareness can inhibit policy, regulation, and investment. This paper discusses an opportunity to improve the “cable literacy” of the general public, including policy-makers and regulators. “Surfacing,” a digital map of submarine cables built using web technologies, is designed in game-like format in which the user becomes the signal, traverses the network, and learns about the challenges companies face in constructing and maintaining cable systems.

"Society is reliant on infrastructure services, such
as information and communication technology, energy, water,
and food supply, but also on governmental, cultural, and
search and rescue organizations. The goal of project Kritis-
KAT at the Federal Office of Civil Protection and Disaster
Assistance in Germany is the development of generic criteria
for the identification and evaluation of infrastructures regarded
as “critical” for society. Acknowledging that full protection
against all threats and cascading effects is not possible, the
approach focuses on the impacts rather than the prevention
of threats. The development of generic criteria requires the
prioritization of infrastructures and identification of their key
characteristics for civil protection purposes, risk management
activities, and strategic proactive planning. For this purpose,
the development of a national critical infrastructure priority
inventory is based on a thorough examination of the range of
criteria typically used in similar approaches. The specific focus
of this paper is to identify and simplify essential characteristics
of infrastructure criticality. The main outcome of this study is
the development of common criteria generally applicable to a
variety of infrastructures."

As megaprojects have become ubiquitous, their real benefits and costs have come under increased scrutiny. We interviewed Bent Flyvbjerg, who has extensively studied megaproject development. Flyvbjerg has found systematic problems in the development process: by intentionally misrepresenting information and deliberately disregarding risks, proponents instigate projects that result in fewer benefits and higher costs than promised.

Roads and Anthropology is the first collection of road ethnographies, edited by two pioneers in the anthropological explorations of infrastructures, the essays published in this book aim to pave the way for that rising field of anthropological research.

This book was published as a special issue of Mobilities.

Table of Contents
-Dalakoglou D. & P. Harvey. Introduction. Roads and Anthropology: Ethnographic Perspectives on Space, Time and (Im)Mobility
-Nielsen M. Roadside Inventions: Making Time and Money Work at a Road Construction Site in Mozambique
-Campbell J. Between the Material and the Figural Road: The Incompleteness of Colonial Geographies in Amazonia
-Kernaghan R. Furrows and Walls, or the Legal Topography of a Frontier Road in Peru
-Harvey P. & H. Knox. The Enchantments of Infrastructure
-Klaeger G. Rush and Relax: the Rhythms and Speeds of Touting Perishable Products on a Ghanaian Roadside
-Pedersen M. & M. Bunkenborg Roads that Separate: Sino-Mongolian Relations in the Inner Asian Desert
- Dalakoglou D. ‘The Road from Capitalism to Capitalism’: Infrastructures of (Post)Socialism in Albania

Back cover text: This book aims to enlarge the understanding of decision-making on mega-projects and suggest recommendations for a more effective, efficient and democratic approach. Authors from different scientific disciplines address various aspects of the decision-making process, such as management characteristics and cost-benefit analysis, planning and innovation and competition and institutions. The subject matter is highly diverse, but certain questions remain at the forefront. For example, how do we deal with protracted preparation processes, how do we tackle risks and uncertainties, and how can we best divide the risks and responsibilities among the private and public players throughout the different phases of the project? - Presenting a state-of-the-art overview, based on experiences and visions of authors from Europe and North America, this unique book will be of interest to practitioners of large-scale project management, politicians, public officials and private organisations involved in mega-project decision-making. It will also appeal to researchers, consultants and students dealing with substantial engineering projects, complex systems, project management and transport infrastructure.

This paper focuses on problems and their causes and cures in policy and planning for large infrastructure projects. First, it identifies as the main problem in major infrastructure development pervasive misinformation about the costs, benefits, and risks involved. A consequence of misinformation is massive cost overruns, benefit shortfalls, and waste. Second, the paper explores the causes of misinformation and finds that political-economic explanations best account for the available evidence: planners and promoters deliberately misrepresent costs, benefits, and risks in order to increase the likelihood that it is their projects, and not the competition's, that gain approval and funding. This results in the "survival of the unfittest," where often it is not the best projects that are built, but the most misrepresented ones. Finally, the paper presents measures for reforming policy and planning for large infrastructure projects, with a focus on better planning methods and changed governance structures, the latter being more important.

Risk, including economic risk, is increasingly a concern for public policy and management. The possibility of dealing effectively with risk is hampered, however, by lack of a sound empirical basis for risk assessment and management. This article demonstrates the general point for cost and demand risks in urban rail projects. The article presents empirical evidence that allow valid economic risk assessment and management of urban rail projects, including benchmarking of individual or groups of projects. Benchmarking of the Copenhagen Metro is presented as a case in point. The approach developed is proposed as a model for other types of policies and projects in order to improve economic and financial risk assessment and management in policy and planning.

Infrastructure threatens to lock-in societies to fossil fuels, unless something is done about it now. This is because infrastructure lasts for such a long-time, meaning that any infrastructure built or rebuilt now will last well into the 21st century – even until the end of the century in some cases. Consequently, there is a need to integrate climate change, especially adaptation, into infrastructure now or societies will be left with infrastructure designed around an unsustainable socio-technical system (e.g. combustion engines, roads, suburbanization, etc.). Such change is conceptualized in the literature as a sustainability transition. However, any attempts at such transitions have to address the materialities of infrastructure systems (e.g. physical form, environmental context, etc.). In this paper I develop the concept of socio-material systems and apply it to transport infrastructure in Ontario, Canada.

Out-of-control information technology (IT) projects have ended the careers of top managers, such as EADS CEO Noël Forgeard and Levi Strauss’ CIO David Bergen. Moreover, IT projects have brought down whole companies, like Kmart in the US and Auto Windscreen in the UK. Software and other IT is now such an integral part of most business processes and products that CEOs must know their IT risks, which are typically substantial – and overlooked. The analysis of a sample of 1,471 IT projects showed that the average cost overrun was 27% — but that figure masks a far more alarming “fat tail” risk.  Fully one in six of the projects in the sample was a Black Swan, with a cost overrun of 200%, on average, and a schedule overrun of almost 70%. This highlights the true pitfall of IT change initiatives: It’s not that they’re particularly prone to high cost overruns on average – it is that there are a disproportionate number of Black Swans. By focusing on averages instead of the more damaging outliers, most managers and consultants have been missing the real risk in doing IT. In conclusion, the article outlines ideas as to what can be done to avoid Black Swans.

The current text locates the anthropological study of roads within the wider context of studies on mobility and modernity. Besides introducing the articles of this special issue of Mobilities on roads and anthropology, this introduction also addresses some of the broader theoretical and epistemological implications of the anthropological perspective on roads, space, time and (im)mobility

2008. 352 pp. r150.00 (hardcover). This volume is intended to explain why major investment projects (the so-called mega-projects) often are not completed on time and cost more than originally budgeted. Drawing from experiences of European and North American countries, the book also suggests ways to avoid such failures. Although the topic is rather specific, the book is worth reading for both experts and nonexperts as infrastructure development continues to be a major key to economic expansion across the globe.g row_486 380.. 408 For those who only have a vague idea of what a mega-project is, the book begins by introducing the topic and reviewing the most important recent literature. The first part of the volume, then, provides numerous insights on the complexity of mega-projects, starting from the large number of reasons why mega-projects might fail. For example, the project might be "underdesigned," thus less costly but less robust to unforeseen developments, or it might be "overdesigned," when a large number of weaknesses and possible problems are considered in advance, and solutions are evaluated before the problem actually occurs. Overdesigned projects are more robust, less likely to fail, but are much more costly. The project might involve the use of innovative technologies that have never been applied to a similar context, and that involve more uncertain implementation costs and results. Most projects have an impact on the environment and might face opposition for example from environmentalist groups. If representative of these groups have not been directly involved in the design of the project, they might try to stop it, thus causing delays and increasing costs. Finally, because of incorrect predictions of 380 GROWTH AND CHANGE, JUNE 2009

The Panchromatic Remote-sensing Instrument for Stereo Mapping (PRISM) carried by the Advanced Land-Observing
Satellite (ALOS) was designed to generate worldwide topographic data with its high-resolution and stereoscopic
observation. PRISM performs along-track (AT) triplet stereo observations using independent forward (FWD), nadir
(NDR), and backward (BWD) panchromatic optical line sensors of 2.5m ground resolution in swaths 35 km wide. The
FWD and BWD sensors are arranged at an inclination of ±23.8◦ from NDR.
In this paper, PRISM images are used under a new perspective, in security domain for sea surveillance, based on the
sequence of the triplet which is acquired in a time interval of 90 sec (45 sec between images). An automated motion
detection algorithm is developed allowing the combination of encompassed information at each instant and therefore the
identification of patterns and trajectories of moving objects on sea; including the extraction of geometric characteristics
along with the speed of movement and direction. The developed methodology combines well established image
segmentation and morphological operation techniques for the detection of objects. Each object in the scene is represented
by dimensionless measure properties and maintained in a database to allow the generation of trajectories as these arise
over time, while the location of moving objects is updated based on the result of neighbourhood calculations.
Most importantly, the developed methodology can be deployed in any air borne (optionally piloted) sensor system with
along the track stereo capability enabling the provision of near real time automatic detection of targets; a task that cannot
be achieved with satellite imagery due to the very intermittent coverage.

This paper focuses on problems and their causes and cures in policy and planning for large-infrastructure projects. First, it identifies as the main problem in major infrastructure developments pervasive misinformation about the costs, benefits, and risks involved. A consequence of misinformation is cost overruns, benefit shortfalls, and waste. Second, it explores the causes of misinformation and finds that political-economic explanations best account for the available evidence: planners and promoters deliberately misrepresent costs, benefits, and risks in order to increase the likelihood that it is their projects, and not those of their competition, that gain approval and funding. This results in the ‘survival of the unfittest’, in which often it is not the best projects that are built, but the most misrepresented ones. Finally, it presents measures for reforming policy and planning for large-infrastructure projects with a focus on better planning methods and changed governance structures, the latter being more important.

Because of the prominent position of urban rail in reducing urban transport-related problems, such as congestion and air pollution, insights into the costs of possible new urban rail projects is very relevant for those involved with cost estimations, policy makers, cost-benefit analysts, and other target groups. Knowledge of the differences in costs per kilometre, including explanations of differences and their breakdowns is currently lacking in the literature. This paper aims to provide a first stage insight into how cost per kilometre varies across urban rail projects. The methodology applied is a simple cost comparison across projects where the data collected are comparable. We conclude that capital costs per route-kilometre of urban rail vary highly between projects. Looking at European projects and excluding outliers, the total capital costs per route-kilometre (including stations and rolling stock) lie mainly between US$50-100 million (2002 prices). Including US projects, the range is US$50-150 million. The main reasons for the high variation in the route-kilometre costs are differences between projects as regards the ratio of underground to above-ground construction, ground conditions, station spacing, type of rolling stock, environmental and safety constraints and labour costs. We warn, however, that the observations used to reach the conclusions are too few to obtain results with statistical significance. Our results must therefore be seen as a first step towards collecting more data so that a more succinct statistical analysis can be conducted. Another conclusion is therefore that this area has future research potential.

A major source of risk in project management is inaccurate forecasts of project costs, demand, and other impacts. The paper presents a promising new approach to mitigating such risk, based on theories of decision making under uncertainty which won the 2002 Nobel prize in economics. First, the paper documents inaccuracy and risk in project management. Second, it explains inaccuracy in terms of optimism bias and strategic misrepresentation. Third, the theoretical basis is presented for a promising new method called "reference class forecasting," which achieves accuracy by basing forecasts on actual performance in a reference class of comparable projects and thereby bypassing both optimism bias and strategic misrepresentation. Fourth, the paper presents the first instance of practical reference class forecasting, which concerns cost forecasts for large transportation infrastructure projects. Finally, potentials for and barriers to reference class forecasting are assessed.

Dan Lovallo and Daniel Kahneman must be commended for their clear identification of causes and cures to the planning fallacy in “Delusions of Success: How Optimism Undermines Executives’ Decisions” (July 2003). Their look at overoptimism, anchoring, competitor neglect, and the outside view in forecasting is highly useful to executives and forecasters. However, Lovallo and Kahneman underrate one source of bias in forecasting—the deliberate “cooking” of forecasts to get ventures started. My colleagues and I call this the Machiavelli factor.

Results from the first statistically significant study of the causes of cost escalation in transport infrastructure projects are presented. The study is based on a sample of 258 rail, bridge, tunnel and road projects worth US$90 billion. The focus is on the dependence of cost escalation on: (1) the length of the project‐implementation phase, (2) the size of the project and (3) the type of project ownership. First, it was found, with very high statistical significance, that cost escalation was strongly dependent on the length of the implementation phase. The policy implications are clear: decision‐makers and planners should be highly concerned about delays and long implementation phases because they translate into risks of substantial cost escalations. Second, projects have grown larger over time, and for bridges and tunnels larger projects have larger percentage cost escalations. Finally, by comparing the cost escalation for three types of project ownership - private, state‐owned enterprise and other public ownership - it was shown that the oft‐seen claim that public ownership is problematic and private ownership effective in curbing cost escalation is an oversimplification. The type of accountability appears to matter more to cost escalation than type of ownership.