A significant part of the public spending is designated to investment projects within the public sector. Hence, it is crucial to properly prioritize among the different projects. Cost calculations is an essential tool in the process of evaluating and prioritizing projects. This report describes and discusses systematic errors in cost estimations of public investment projects. First, the report starts with a description of the statistical method used to identify systematic errors in cost calculations. Second, a literature review shows that systematic cost underestimations that are both statistically and economically significant are common in a broad spectrum of investment projects. The last part of the report presents a method for adjusting cost calculation with data from previous projects in order to minimize the discrepancies. Finally, the report suggests that government authorities develop a database with previous projects in order to support their methods for cost calculations.