Improving Transport Project Appraisals
In the Islamic Countries
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1.2.1 Legal basis of project appraisal
Project appraisal effectiveness in improving resource allocation is linked to the enforcement and
promotion of its proper and timely use. The degree and level of prescription that rule the
assessment of transport project appraisal practices is the first element to be examined within a
public investment management system. This aspect includes three elements: a) the existence
and specification of legal requirements; b) the precise definition of its scope of application; c)
the definition of its timing.
Table 1.1: Elements of the legal basis aspect
Aspect Elements included
Legal basis of
project
appraisal
1. Legal requirement: which type of requirement is in place, if any? Is there
a legal requirement to carry out transport project appraisal or it is it simply a
recommended practice? Does the obligation define appraisal objectives,
features and methodology to be used?
2. Scope of application: is the requirement for project appraisals common to
all public investments (above a specific cost threshold) or is it specific for the
transport sector? Is the project appraisal system diversified depending on the
scale and typology of the project? is the appraisal performed on individual
projects or on strategies?
3. Timing: during the project preparation phase when is project appraisal
usually prepared? is the project appraisal development performed ‘early’
enough in the process when project alternatives are still to be selected?
Ad 1) Requirement
The first point concerns which type of requirement to carry out transport project appraisal is in
place, if any. Project appraisal can be carried out because of a precise legal obligation to do so, or
simply because it is a recommended exercise. In any case, the decision to perform project
appraisal should not be left to the initiative of project promoters or funding agency, it should be
promoted and enforced, possibly by law.
Different practices are in place in the Organization for Economic Co-operation and Development
(OECD) countries related to legal requirement to perform Cost-Benefit Analysis (CBA), from
nationally mandatory requirements to sector/institution specific practices, as presented in
For instance, in Chile, there is a legal requirement for all public sector investment
projects and programmes to be evaluated including (as of early 2010) infrastructure
concessions funded by the private sector. Instead, in both the United Kingdom and the
Netherlands there is no legal requirement, but CBA is recommended by government and used
anyway (see 3.1.1 and 3.2.1).