Improving Transport Project Appraisals
In the Islamic Countries
109
CBA applied in investment decision-making
Cost and benefits
In project appraisal in Jordan, a broad range of costs and benefits are considered, determined
by the scope of the project. An overview of typical costs and benefits is presented i
Table 6.3: Cost and benefits applied in project appraisal
Costs Benefits
Construction costs Travel time savings
Maintenance costs Benefits from reduced externalities, including
environmental, safety and congestion.
Operational l costs Reliability improvement
Investments costs, for example on rolling
stock, etc.
Development opportunities and impact on real
estate
Appraisal of transport projects in Jordan still benefits from the recent work carried out for the
LTNTS and the input values used therein, which are used as a basis for ongoing and upcoming
appraisals. Selected input parameters are illustrated below.
Discount rate
No standardised discount rates are prescribed. When appointing a consultant for a feasibility
study, it is expected that the consultant includes a discount rate, which then needs to be
approved by the technical committee, overseeing the work of the consultant. In the Amman-
Zarqa BRT case, an 8% discount rate has been applied. In other projects, discount rates in the
same range have been applied. This is confirmed by the PPP Unit, stating that there is some
variation, however, in an acceptable range.
Value of time (VoT)
The LTNTS applies a set of VoT, which is based on the report Greater Amman Multi-Modal
Transport Model - Base Year Report and uses hourly salary as a basis for determining the VoT.
The VoT is differentiated per category of user and per trip purpose, as presented i
Table 6.4: Value of time for categories of users and trip purposes91
Car ownership Work related VoT Non work related VoT
Non car owner 2.34 0.49
Car owner 4.99 1.04
Source: Jordan Long Term National Transport Strategy and Action Plan
In the LTNTS the values, as presente are used to determine the VoT in future years,
by applying GDP per capita rates of growth. The Amman-Zarqa BRT case indicated a VoT of 2.16
JOT.
91 In 2018 values (JOD per hour).