Cost deviation in road construction projects: The case of Palestine

This paper investigates the statistical relationship between actual and estimated cost of road construction projects using data from road construction projects awarded in the West Bank in Palestine over the years 2004-2008. The study is based on a sample of 169 road construction projects. Regression models based on this data, reveal that 100% of projects suffer from cost deviation: 76% of projects are under-estimated while 24% are over-estimated. The deviation between estimated and actual cost average 14.6%, ranging from -39% to 98%. The results show that the relationship between the project size (length and width of road) and the cost deviation is very weak, the coefficient of determination R2 = 0.0028.