"Kev" wrote in message
ups.com...

I doubt it. The £5.7m may well include a large contingency figure (+40%
is common).

Contingency for what exactly and why 40%.

Is it just possible that the treasury keep a running total of previous
project overruns? I think they call it 'optimism bias' or some such.

Paul

Paul Scott wrote:
"Kev" wrote in message
ups.com...

I doubt it. The £5.7m may well include a large contingency figure (+40%
is common).

Contingency for what exactly and why 40%.

Is it just possible that the treasury keep a running total of previous
project overruns? I think they call it 'optimism bias' or some such.

Basically, yes. The Treasury has evidence that estimates are routinely
biased (optimistically) by people appraising projects, so they have a
set of optimism bias figures that they require to be built into projects
that they fund. The figure varies depending upon the type of project.

http://www.hm-treasury.gov.uk./media...imism_bias.pdf

For public works not directly funded by the Treasury, various standards
exist, and can vary from small figures like 5% for small, fairly
predictable works like road resurfacing, to larger figures like 40% for
big construction projects.

--
Dave Arquati
www.alwaystouchout.com - Transport projects in London