Improving Transport Project Appraisals
In the Islamic Countries
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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