Public road construction projects represent one of the most financially significant and institutionally complex categories of public procurement worldwide. Persistent challenges such as cost escalation, time overruns, inflation exposure, opportunistic renegotiations, and suboptimal contractor performance continue to undermine value for money, fiscal sustainability, and public trust. Drawing strictly on foundational and contemporary literature in procurement theory, contract economics, and construction management, this study develops an integrated analytical framework to explain why cost overruns and inefficiencies persist despite decades of reform. By synthesizing incentive theory, transaction cost economics, political economy, and empirical findings from infrastructure projects across multiple jurisdictions, the article examines how inflation dynamics, contract incompleteness, governance structures, judicial efficiency, and strategic behavior interact within road construction procurement systems. Special attention is given to the tension between rigid rule-based procurement and flexible relational contracting, as well as the unintended consequences of competitive bidding under asymmetric information. Using descriptive analytical methods grounded in prior case-based and empirical studies, the research identifies systematic mechanisms through which contractors and public agencies respond to risk, uncertainty, and institutional constraints. The findings highlight that cost escalation and delays are not merely technical failures but rational responses to misaligned incentives and weak enforcement environments. The article contributes theoretically by bridging construction management research with advanced procurement economics, and practically by outlining policy-relevant insights for designing contracts, managing inflation risk, and improving procurement performance in large-scale road infrastructure. The study concludes that durable reform requires aligning incentives across the project lifecycle, strengthening institutional capacity, and recognizing the endogenous nature of opportunism within public procurement systems.

Public procurement, road construction, cost escalation, incentive theory

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