Fifth International Conference on Construction in the 21 st Century (CITC-V) “Collaboration and Integration in Engineering, Management and Technology” May 20-22, 2009, Istanbul, Turkey Structural Equation Model of Estimating Final Construction Cost of Road Tunnel Kleopatra Petroutsatou Department of Construction Engineering and Management, School of Civil Engineering, National Technical University of Athens kpetrou@tee.gr Sergios Lambropoulos Department of Construction Engineering and Management, School of Civil Engineering, National Technical University of Athens Abstract In the preliminary design phase of technical projects, the selection of the best alternative solution requires reliable early estimates of construction cost. This is particularly true in the case of tunnels, where underground risks are involved and cost overruns are frequent. To estimate final construction cost of road tunnels in a more realistic and systematic manner a structural equation model (SEM) was developed. SEM is a systematic combination of confirmatory factor analysis, multiple regression analysis and path analysis. More importantly, SEM has an error variable that capitalizes on both measurement errors and structural errors by accurately reflecting the actual phenomena. SEM allows the user to visually depict the paths of how several variables affect the final construction cost of an underground project. A set of geotechnical parameters influencing the final construction cost was selected, based upon an extensive literature review and consultations with a number of experts. Detailed information regarding 49 km of constructed tunnels was gathered in an extensive database and exploited by SEM. “Goodness of Fit” of the model was tested for accuracy and robustness. Keywords Cost estimation, Tunnels, Structural equation model 1. Introduction Social and financial needs for safe and rapid transportation of people and goods impose the construction of secure high speed motorways. In order to overcome problems associated with urban regions, environmentally sensitive areas or archeological sites the construction of tunnels becomes imperative. It is very important to establish the early cost estimate of technical projects because affordability determines to a large extent the best alternative solution. This is particularly the case for tunnels where underground risks are involved. This study aims to provide an organized and accurate model that estimates the final construction cost of road tunnels by utilizing Structural Equation Model (SEM). The data was gathered from an extensive database that was developed in previous work (Petroutsatou and Lambropoulos, 2007). The tunnels are constructed across the new motorway Egnatia Odos that crosses a large variation of geological conditions. 115