Improving Transport Project Appraisals
In the Islamic Countries
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Tools to support project appraisal are sometimes used, for example HDM-4, as mentioned above.
There is a need to be able to deal with appraisal tools that can deal with
low volume roads
.
Guidelines
, if any, mostly focus on rather general process steps to apply in project appraisal.
Specific guidelines or
manuals
on how to carry out project appraisal is mostly lacking. This is
confirmed by results from the survey, where 14% said that there are no guidelines and another
43% did not know whether any exist.
Standards
, for example on input parameters, such as
discount rate or value of time, are not systematically applied.
Content
Cost-benefit analysis
(CBA) is mentioned in most of the cases as the reference methodology for
project appraisal, although other types of analyses, such as multi-criteria analysis (MCA) and
cost effectiveness analysis (CEA) are also applied. In KSA the traditional methodological
reference is rather MCA while CBA is gaining momentum only in more recent times. In general,
a clear
methodological framework
, describing for which projects what analysis is to be applied;
and when and how it is to be used, is often not present. Therefore,
variation
is shown on the
methodology and approach per project, agencies and types of procedures.
The
costs and benefits
included in project appraisal are mostly clearly structured. For a road
project, this would include investment costs, including aspects such as resettlement, and
maintenance costs, while a range of benefits are included, such as time savings, vehicle operating
costs, reduction of externalities (safety, environment, congestion), increased reliability and
(regional) development opportunities. Variations have been noticed in how benefits are
monetised
, for example in applying
value of time
or
value of statistical life
.
Environmental Impact Assessment is also rather common as a complement to socio-economic
assessment. In KSA, it constitutes the most developed item in transport appraisals. In Iran,
regulations on environmental impact assessments (EIAs) are set by the Environmental
Protection Organisation, which additionally reviews the submitted reports. In both countries,
rules and guidelines to appraise environmental impacts of projects are quite well developed and
codified but not necessarily always implemented in a consistent and accurate way.
Risk
assessment
is in some countries, such as Nigeria, included in project appraisal. In such cases, the
critical elements of the project are identified and sometimes mitigating measures are included.
Sensitivity analysis
on the critical parameters is not carried out on a structural basis.
Demand analysis
The assessment of
(future) traffic flows
is part of the project appraisals reviewed. This
assessment is in many cases outsourced to a private sector consultant, often as part of a broader
support package, including the feasibility study.
Transport models
are sometimes applied to
support demand analysis, for example in Jordan, Iran and KSA. Transport models are more often
run in the frame of masterplan or strategy development to select among different options rather
than for individual projects. Their validity and usefulness is often hampered by the lack of
accurate statistics to populate the model, as it is explicitly recognised for example for KSA.
Dynamic models making use of econometric simulations are the exception, demand forecasts is