Formulating Reliable Target Outturn Costs in Transport Infrastructure Projects: Insights From Senior Executives

Collaborative procurement methods, such as alliancing and its variants, are becoming increasingly popular in delivering large-scale transport infrastructure projects. The systematic design of the Project Alliance Agreement (PAA) provides the basis for stimulating collaborative behaviors to be enacted, which contributes to ensuring that best-for-project decision making and outcomes are delivered. However, despite the nascent adoption of alliancing, knowledge is absent on effectively delivering transport infrastructure projects on time and within budget. Thus, this article focuses on alliances and addresses the following question:
How can alliances produce reliable target outturn costs (TOCs) for transport infrastructure projects?
To answer this question, we draw on the experiences of senior executives involved in formulating a TOC (including the target adjustment event) in rail infrastructure projects. We find the PAA shapes and guides collaborative behaviors, enabling alliance team members to jointly consider the context and complexity of projects and, thus, develop realistic and reliable estimates of their TOC. The insights we obtained from the senior executives provide insights into the decision-making processes of alliances, enabling a better understanding of how large-scale rail infrastructure projects' cost and time performance can be improved.