Improving Transport Project Appraisals
In the Islamic Countries
99
compensate investors in case traffic is not in line with estimates, or if there is a need to transfer
a project to the public sector (in PPP BOT models). The ultimate goal of such evaluations,
however, is not to detect deviations, follow up and learn from experience, but rather, more
simply, to respond to practical needs such as the enforcement of contractual duties.
No evidence of ex-post evaluation being performed specifically for urban transport projects has
been found either. In this subsector, however, no well-functioning mechanism to learn from
previous projects appears to be in place: as a matter of fact, the literature underlines that Iranian
cities continue a car-oriented paradigm to transportation planning, despite experience
suggesting that road construction only reduces congestion in the short run, while fuelling travel
demand and congestion in the long run87.
5.9 Conclusions and recommendations
Conclusions
According to the collected evidence, the Iranian transport project appraisal system is well-
developed, and some of its elements in particular can be highlighted as good practices. There is
a wide recognition of the need to systematically perform projects appraisal of transport projects
and there are established practices making use of guidelines, unit costs references and
handbooks. Good practices are also recognised in the following peculiar aspects: the sector-
independent centralisation at PBO’s level of the overall system; the certification of competences
and requirement to rely on certified consultants to carry out appraisals; the quality review
system; some sort of monitoring and follow up activities.
While the Iranian project appraisal system is grounded on a strong legal basis applying at central
level for all public investments (not only in the transport sector), the regulatory and
implementation framework for transport projects is particularly developed for PPP
investments. Appraisal practices for government-based projects, by contrast, appear to rely less
on legal norms and more on established habits.
The fact that at central level several related but different organisations (PBO, Ministry of
Economic Affairs and Finance, Parliament's Research Organization etc.) are involved in
regulating and/or providing guidance on different aspects88 of project appraisal leads to a
general system which is rather fragmented. Clearly, this setting also influences the appraisal
practice in the transport sector.
Also, the fact that different MRUD-organisations are in charge of transport project appraisals ,
does not facilitate the comparability of different approaches. In particular, differences are in
place between organisations affiliated to the MRUD when it comes to quantify and monetise
87 Soltani, A., 2017. Iran. As an example, the author mentions decision taken in Tehran in recent years on the implementation
of large road projects, adding that if the budget for these projects had been used for public transport projects, the city’s
underground network could have been extended by 77 km, or 28,000 buses could have been added to the existing fleet.
88 Project Creation, Engineering, Procurement, Finance and Provision of Budget, Economical Assessment and Investment
Appraisal.