PSI - Issue 64

Rubina Canesi et al. / Procedia Structural Integrity 64 (2024) 1712–1719 Author name / Structural Integrity Procedia 00 (2019) 000 – 000

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Fig. 1. a) EU, Construction producer prices and costs 2005 – 2023 (2015 = 100); b) Annual growth rates, on a percentage base compared to the same period in the previous year, of the construction producer prices index (CPPI) for new residential buildings, 2011 – 2022. Source Data: Eurostat, Elaboration: Authors. Given the significant growth in construction costs observed in Europe over the past four years, it is important to examine how to adapt cost assessment models to the exponential trend of these costs and verify their reliability and their compliance (French & Gabrielli, 2007; Gabrielli et al., 2022). This study endeavors to contribute to the body of knowledge in this area by examining the economic sustainability of large-scale projects and the efficacy of cost management tools in ensuring their success. With this aim, this study intends to adapt a predictive cost overrun model, already applied to transport infrastructure projects, considering the latest trends in cost increases. The tool to be adapted for cost overruns is a user-friendly risk assessment tool designed for smaller local administrations. It originates from a risk matrix proposed by the National Anti-Corruption Authority (ANAC), which takes into account the probability of occurrence and the impact scale of various cost categories in public works. This application facilitates the ex-ante estimation of potential project cost increases, i.e. cost overruns. Once risk elimination or mitigation strategies are identified, a risk matrix is constructed to categorize and assess each risk based on its probability of occurrence and expected impact on the project. Due to the stochastic nature of unexpected events, risk evaluation is conducted on a probabilistic basis, estimating the likelihood of adverse situations challenging predictive success. The preliminary project risk assessment is bolstered by creating an impact/probability matrix, which identifies risks with a higher potential impact and a greater probability of occurrence. Following this identification, these risks are quantified by converting them into a percentage impact on the initial cost, relative to their probability of happening. This tool enables the ex-ante estimation of possible cost overruns during the first phase of the life cycle of a construction project. This study aims to verify its reliability and accuracy in light of the exponential increase in construction costs and the necessary modifications to be applied to the model to address market changes. There are five sections in this manuscript. Following the introduction, Section 2 details a literature review on cost overruns and the ANAC’s risk assessment tool . Section 3 describes the materials and methodology to be applied to the selected model. Section 4 discusses the obtained results and presents the discussion, focusing on the estimated risk value of construction costs resulting from their increase. Section 5 discusses the conclusion, and the study’s limitations and future research direction. 2. Literature Review A cost overrun refers to a situation in which the actual incurred expenses exceed the initially estimated or budgeted amount. It occurs when the costs of completing a project surpass what was originally planned or allocated for that project. These overruns can have significant impacts on project budgets, timelines, and on the overall success of the