Cost Underruns in Major Road Transport Infrastructure Projects—The Surprising Experience of Poland

Abstract

This paper investigates the reasons behind the surprising cost performance of road construction projects in Poland. In particular, in order to explain the phenomenon of cost underruns, the role of regulations related to the national and the European Union structural investment funding is verified. It is shown that in Poland there exist two different institutional frameworks related to infrastructure investment projects. However, in the case of road transport infrastructure investment, the public investor does not discriminate between the sources of funding and follows the optimal strategy for the EU co-funded projects. This, in turn, leads to the emergence of cost underruns.