Improving Transport Project Appraisals
In the Islamic Countries
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sometimes the result of extrapolation from past trends.
Result of project appraisal
Project appraisal is in the vast majority of cases used for justification of a transport infrastructure
project. Results are expressed in Net Present Value (NPV) or Internal Rate of Return (IRR), when
a CBA is the methodology such as for example in Iran. In other cases, for example in KSA, MCA is
used to prioritise projects and to develop an action plan. In this case, the results are expressed
in terms of scores over a number of different criteria.
Follow-up and learning
Monitoring of project implementation is taking place in most cases. However, ex-post evaluation
is often not carried out. Half of the respondents to the survey indicated that ex-post evaluation
of projects is not carried out. In most cases, there is no clear project cycle approach , which links
subsequent steps (identification, selection, appraisal, design, tendering and contracting,
implementation, monitoring and evaluation).
10.2 Policy recommendations related to transport project appraisals
10.2.1 General recommendations
While alternative solutions and approaches do exist to address each of the aspects identified in
the conceptual framework, as presented i the international practice suggests that
a consistent framework for identifying, coordinating, evaluating and implementing public
investments project should include at least the following items:
 A legal requirement to evaluate all investment initiatives: the decision to perform project
appraisal should not be left to own initiatives of project promoters or funding agencies but
should be promoted and enforced, possibly by law. Such requirements can be general for all
public investments or specific depending on sectors or types of projects. It is important,
however, that it defines, with a certain degree of detail, the objective of the appraisal, the
appropriate scope and timing, the methodology to be used and its specifications.
 The legal requirement may remain unapplied if it is not translated into a system of norms,
procedures and methodological support, including the centralized definition of accounting
prices. The promotion of capacity development and the certification of competences can
strengthen the adherence to certain quality standards.
 A governance system defining clear and separate roles for, on one side, the institution that
reviews and approves the appraisal of projects, and on the other side the institutions
promoting projects. In fact, an appropriate “checks and balances” system can ensure that
appropriate incentives are in place to systematically require that good quality analysis are
carried out and used to inform the decision-making process.
 Multistage evaluations with various filters and supervisory and quality control mechanisms
should follow the, sometimes long and complex, process of project idea generation, design
and specification.
 Finally, a system of monitoring, periodic follow up and updates, as well as ex-post evaluation
can help to identify forecasting errors or managerial problems and taking appropriate and
timely measures to reduce risks.