New Norwegian evidence of the accuracy of the principle

As we all know very few large public projects are completed to budget. However Norway is an exception. It is probably the first country ever to gain full control over their large public projects. 

Since 2001, budget quality audits, among others based on the Successive Principle has been obligatory for all large-scale Norwegian public-sector projects to undergo. The ambition was that from now on 80 % of the projects should keep to budget.

By 2013, twelve years later, 40 of these projects of all categories were completed, and an official report (ref. 1) has examined the result. First of all that exactly 80 %, namely 32 of the 40 projects, kept to budget. Besides, this outcome does match corresponding Danish results- See Accuracy of prognoses.

Statistical procedures are used in Norway together with the new estimating principles and budget quality audits. Results are expressed as a mean value with related standard deviation to both sides. The report document that the actual final costs are distributed symmetrically around the mean values, exactly as the theory tells.

The Norwegian appropriation system uses the estimated average value as the working budget. The actual budget supplied this with a reserve pool (up to the 80 % probability) which is administered by a high-level committee and is to be used in the event of unusual adverse events arising.

Ref. 1:  www.concept.ntnu.no/rapport 35 (in Norwegian with an English summary).
Summery in Danish with more details: Fuld Norsk budgetkontrol.

Ref. 2:  T. Aass, O. Jermstad, K. Aanes Johansen, O. Klakegg: “Governance of Norwegian Government Projects”, paper, International Project Management Association, IPMA, World Congress, 2010 (deals with the first 23 projects)

Steen Lichtenberg

Dr. Steen Lichtenberg

Lichtenberg & Partners
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DK-2950 Vedbæk
Denmark
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Projects on budget - new Norwegian evidence
Most of 40 large Norwegian public projects are since 2001 finished on budget. They were analysed using the Successive Principle.