Improving Transport Project Appraisals
In the Islamic Countries
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benefits included; applicable based on often existing data). It will be interesting to see to what
extent this approach will further develop and can be mainstreamed into the appraisal process.
Special case: the ERGP focus lab
As part of the ERGP, the concept of focus labs has been introduced. This concept, based on the
Malaysian Economic Transformation Programme, is developed to fast-track and enable private
sector investments in a number of priority sectors, including transportation.
The Focus Labs are an iterative process that focuses on tackling issues through a recursive
“trouble-shooting” process. The Focus Labs are designed to hold for several weeks and attended
by key stakeholders to develop detailed implementation programmes and identify critical areas
of growth through the identification of Entry Point Projects (EPP) that will catalyse the ERGP.
Conversations and discussions in the ERGP Focus Labs are primarily focused around mobilising
private sector investments. Participation of both the private and public sectors is therefore
critical to ensure that deliberations inside the Labs are well represented by both sides. As such,
the objectives of the labs are two-fold: (i) to generate new investments for critical projects; and
(ii) resolution of complex interagency problems that inhibit private sector investment. The
appraisal process is short and relies on five steps defined as part of funnelling the projects:
visioning exercise; round 1 assessments; round 2 assessments; problem solving; and
implementation plan and KPIs. Criteria applied in this process are (i) bankability of the project
and (ii) jobs creation. The Focus Labs approach has resulted in a number of quickwins, including
the aviation company to obtain a LOI within five weeks.
Risk assessment
In the feasibility studies that have been assessed risk management has been applied. In most
cases a sensitivity analysis has been carried out, comparing the base case with a situation where
there would be change (10-20%) in key parameters, as defined below:
 Capital investment costs
 Traffic volumes
 Specific benefits, e.g. in time savings or vehicle operating cost (in case of road projects).
8.6 Demand analysis
The projected traffic volume plays a critical role in the appraisal of transport projects, as it
determines to a large extent the technical and economic and financial viability of proposed
investments. This is recognised by the Nigerian policy makers, resulting in demand analysis
being firmly mainstreamed into the project appraisal process.
For recent road project appraisal, an assessment of the traffic volume along the relevant routes
was conducted in order to establish the traffic flow characteristics and travel pattern, as well as
users' willingness to pay toll,
For example, as part of the improvement of the existing 4-lane highway (Abuja – Kaduna - Kano
route), the following demand analysis was carried out: