Improving Transport Project Appraisals
In the Islamic Countries
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The use of support tools, such as HDM-4, facilitates the standardisation of input parameters. For
road projects, a 12% discount rate and 20 year evaluation period is used. CBA is the
methodology most applied to establish economic and financial feasibility of a project. The
indicators of viability used are the EIRR and NPV. Traffic demand analysis is carried out as part
of the appraisal process, as (future) transport flows are a key driver of the benefits.
More and more attention is paid to capacity building activities, to ensure that the transport
sector succeeds in playing its developmental mandate. The results of the appraisal process is
both used for justification of the investment of a transport project and a prioritisation of
projects. Monitoring and evaluation is done by the Executing Agency, which in case of road
projects is the ANE.
Policy recommendations
Execute transport project appraisals along the entire project design cycle
Project appraisals can be conducted at a very early phase of the project preparation when
project alternatives are still to be selected or carried out at later stages, when the appraisal
becomes a justification for choices which have already been taken rather than instrumental for
policy learning and future planning. It is recommended to have project appraisal going along the
entire project design and preparation cycle, such that it can better inform and assist the entire
decision-making process. This is explicitly recognised by the UK Green Book that states:
“Appraisals are often iterated a number of times before their proposals are implemented in full.”
Reviewing certain impacts along the entire cycle helps to avoid spurious accuracy and provides
an understanding of whether, in the light of changing circumstances, the proposal is likely to
remain good value for money.
Legal requirement for transport project appraisals
It is recommended to establish a well-defined legal requirement and methodology for transport
project appraisals. A legal requirement stating the principles, procedures andmethodologies for
all the agencies in charge of project planning and financing, will contribute to more effective
project appraisal and selection practices.
Create guidelines for transport project appraisals
In many Mozambican transport projects, a reference is made to UK’s WebTag guidelines and the
JICA guidelines. This indicates that there is a lack of national guidelines on transport project
appraisals. Therefore, it is recommended to create a project appraisal manual, with standardised
input parameters, including amongst others discount rate, value of time, project duration etc.
This guarantees that projects are assessed in a similar manner, enabling a candid prioritisation
of projects.