From Bob Poole at the Reason Foundation:
From the Channel Tunnel to Boston’s Big Dig, large cost over-runs and schedule slips have characterized major transportation infrastructure projects (aka mega-projects). The best research on the extent of this problem is still the 2003 book Megaprojects and Risk, by Danish researcher Bent Flyvbjerg and colleagues. Using a large international database of 258 projects, they found that 90% suffered cost over-runs. They documented systematic “optimism bias” in the forecasts of costs, traffic, and completion date for most projects. As a remedy, they suggested that far more risk should be allocated to parties that have an incentive to reduce such outcomes, and that decisions to proceed with mega-projects should be based on “the willingness of private financiers to participate in the project without a [government] guarantee.”
Poole cites a study by an Australian consulting firm who says public-private partnerships (PPPs) are the way forward (the study tracks the success of these ).