A new project governance model for infrastructure projects is described in this paper. This model contains causal mechanisms that relate a number of project governance variables to project performance. Our proposed model includes relevant variables for measuring project governance in construction projects in uncertain environments. The variables incorporated in the model consider project governance aspects of the relationships between the contracting party and contractors. These aspects cover the early involvement of the contractor in the design and estimation of costs, procurement procedures, integration of design and construction, the incentives and disincentives regime, risk allocation, contract flexibility, and actions that allow the contracting party to maintain bargaining power during possible renegotiations. The proposed model has prediction and diagnosis capabilities enabling decisions to be made on a project-by-project basis and is based on existing theoretical constructs. In developing the model, we used a database consisting of mutually independent records from 58 European infrastructure projects. The records originate from a review of the pre- and post-contract transactions made in these projects. We illustrate the use of the proposed model with examples. After a set of exhaustive analyses, we provide a ranking of the most robust governance actions and factors associated with the occurrence of cost and time underruns. In this way, we show that the proposed model can guide prioritizing project governance actions in specific settings.
- Causal modeling
- Construction projects
- Project governance
- Uncertainty in construction projects