Does (airport) price regulation offer lessons for protecting the public from overcharging for public investment projects?

Here is a somewhat longer version of an Op Ed I wrote for a recent edition of the Irish Independent.

The article is based on the accompanying Table, of which the current version is drawn from last year’s Issues Paper (p.52) published by the aviation regulator’s office. The Table aims to set out, comprehensively and (crucially) ex ante, all of the different ways in which a projects costs might differ from the projected costs – some good, some not so good, some catastrophic – and the appropriate regulatory policy for each.

How are we to protect taxpayers from outrageous cost escalation on public investment projects that draw from a finite pool of taxpayer funds and thereby squeeze out other plans? There may be lessons from the approach of regulatory offices that organise their assessment of capital expenditures with a view to protecting, for example, airport passengers from costs overruns on major projects such as the second terminal (T2) at Dublin airport.