Economic and Financial Analysis

Reports related to economic and financial analysis of road investments

TRB's National Cooperative Highway Research Program (NCHRP) Synthesis 521: Investment Prioritization Methods for Low-Volume Roads documents current practices used by transportation agencies to make investment decisions about low-volume roads. Current transportation asset management practices for low-volume roads typically use asset condition, traffic, and safety metrics to prioritize investment decisions for preservation, maintenance, repair, and replacement projects. However, these metrics do not fully measure the significant value for the wider economy and society that low-volume roads can provide. This publication also addresses the challenges that decision makers may face to communicate the value of such investments to stakeholders in an era of limited funds and constantly changing demands on the transportation system.
Delivering quality municipal services and urban transport with limited fiscal resources remains a key challenge for city governments, one that is becoming ever more acute in the developing world. The last two decades have seen a major change in the global landscape of urban transport finance. Governments should enable the market and private sector to provide urban transport infrastructure and services wherever possible, and focus public funds on those areas that are hard for the market alone to get at. The most sustainable source of finance for urban transport capital investment is arguably long-term debt financing, and cities should make it a central task to establish and improve their creditworthiness. They must also anticipate an upward shift of maintenance expenditures relative to capital investments.
New Zealand Transport Agency manual for economic evaluation of road projects.
China’s three-decade infrastructure investment boom shows few signs of abating. Is China’s economic growth a consequence of its purposeful investment? Is China a prodigy in delivering infrastructure from which rich democracies could learn? The prevalent view in economics literature and policies derived from it is that a high level of infrastructure investment is a precursor to economic growth. China is especially held up as a model to emulate. Politicians in rich democracies display awe and envy of the scale of infrastructure Chinese leaders are able to build. Based on the largest dataset of its kind, this paper punctures the twin myths that (i) infrastructure creates economic value, and that (ii) China has a distinct advantage in its delivery. Far from being an engine of economic growth, the typical infrastructure investment fails to deliver a positive risk-adjusted return. Moreover, China’s track record in delivering infrastructure is no better than that of rich democracies. Investing in unproductive projects results initially in a boom, as long as construction is ongoing, followed by a bust, when forecasted benefits fail to materialize and projects therefore become a drag on the economy. Where investments are debt-financed, overinvesting in unproductive projects results in the build-up of debt, monetary expansion, instability in financial markets, and economic fragility, exactly as we see in China today. We conclude that poorly managed infrastructure investments are a main explanation of surfacing economic and financial problems in China. We predict that, unless China shifts to a lower level of higher-quality infrastructure investments, the country is headed for an infrastructure-led national financial and economic crisis, which is likely also to be a crisis for the international economy. China’s infrastructure investment model is not one to follow for other countries but one to avoid.
For economic evaluation of a highway development project, multiple criteria must be considered on a timeframe longer than the project implementation interval and a geographical area larger than the project zone. In this study, a framework is proposed based on the Network-Level Life Cycle Cost Analysis (NL-LCCA) to assess the effect of highway development projects on mobility, safety, economy, environment and other monetizable criteria. In this approach, project impacts are estimated within physical boundaries of highway network over the network life cycle. This framework can be used as a decision-making support for evaluation and ranking of pre-defined development projects, proposing new cost-effective development projects, assessment of cost efficiency of existing highway network and budget allocation optimization.
This report is the final technical document for the Deploy and refine the road wear modelling method (AT1734) project to provide an overview of the process of calculating the marginal cost of road pavement wear and the Freight Axle Mass Limits Investigation Tool (FAMLIT) software. It details the final steps in the completion of the project, current status of the software, its capabilities and outlines some of the difficulties undergone through the development of FAMLIT.
The review of the National Guidelines for Transport System Management (NGTSM) is currently underway. The first part of the review has involved the updating of unit parameter values for road user cost (RUC) components for use in economic evaluation of road transport projects in Australia, namely: fuel, engine oil, tyres, new vehicles (depreciation), travel time and crash costs. This paper presents an overview of the methodologies used to update the parameter values for RUC components supplied to the NGTSM review. The paper provides parameter values for each of the components for an extended 20 vehicle classification (including passenger cars, light & heavy commercial vehicles and buses) for input prices in terms of both market and resource prices. Values of travel time are provided for vehicle occupants across all vehicle types, as well as values of travel time for freight in urban and rural environs. Finally, the paper reviews the methodology used to estimate the costs of casualty crashes and provides estimates of average cost of crashes for both human capital and willingness to pay (WTP) approaches, taking into account crash rates and injury severities across jurisdictions.
This report presents key findings of an impact evaluation of the Rural Road Rehabilitation Project (RRRP) in Armenia. The RRRP was originally conceived as part of a fiveyear, $236 million Compact between the Millennium Challenge Corporation (MCC) and Armenia designed to increase household income and reduce poverty in rural Armenia. The Compact, managed by the Millennium Challenge Account with Armenia (MCA-Armenia), included two projects: (1) the Irrigated Agriculture Project, which comprised irrigation infrastructure rehabilitation, farmer training, technical assistance to water user associations and postharvest enterprises, and access to credit for farms and agribusiness; and (2) the RRRP, which is the subject of the present report. A good example of impact assessments.
Reliable journey time is a key parameter in travellers' route choice and has important applications in transport planning and modelling. For transport users, it affects their choice of mode, journey route and also their activity patterns. For transport planners and policy makers, journey time estimates are used to provide key indicators for performance monitoring, congestion management, travel demand modelling and forecasting, traffic simulation, air quality analysis, evaluation of travel demand and traffic operations strategies. This research aimed to clarify how historical baseline data combined with near real-time data including environmental conditions, incidents and traffic flow could contribute to the calculation of reliable and timely delivered travel time predictions. A comprehensive literature review was undertaken to establish existing methods for predicting travel time. Based on the findings of the literature review, and using sample data from Auckland's strategic road network, a model was developed to determine if these methods could be applied to strategic roads throughout New Zealand.
This report provides updated unit costs and price indices used to estimate environmental costs in the economic evaluation of Australian road infrastructure and transport projects. A series of calibrated environmental costs and user guidance is provided across a range of externality types such as air pollution, greenhouse gas emissions, noise, soil and water pollution,biodiversity, nature and landscape, urban effects and upstream and downstream categories. These are further disaggregated according to passenger and freight transport (road and rail) in urban and rural locations. Maximum and minimum ranges are also calculated for these externalities. Detailed user information on the application of the externality values derived is also provided. The project used revised methodologies and data sources to derive the updated estimates. The research that informed the methodology is detailed in the report.
SSATP launched a study in 2013 to review good practices, learn lessons from case studies, and provide guidance on private sector involvement in road financing, provision and management relevant to African countries. The study was informed by three case studies based on field visits in Senegal, Ghana and Nigeria, in consultations with stakeholders. Key issues covered include risks associated with private financing and allocation between the private and public sectors, enabling legal frameworks, contractual issues, institutional and governance issues, capacity development, funding, lenders requirements and the need for political will and support. 
This overview paper considers transport services and their impact on poverty and growth in rural subSaharan Africa.  It covers:  1. Observed  transport services impacts on poverty and growth to date in rural subSaharan Africa 2. Constraints on poverty alleviation and growth associated with deficiencies in rural transport services 3. The potential for improved transport services to impact on poverty and growth in rural areas (including possible extended connectivity from integration with mobile phone networks) 4. Identification of key research gaps, assessing (i) where and how current commissioned AFCAP projects will contribute to filling these gaps and (ii) areas where new transport services research needs commissioning. 
As planned large investments in road infrastructure continue to be high on the agenda of many African countries, only few of these countries have actually amended their investments strategy. In many cases, there seems to be a preference for a status quo that can easily be explained by political economy factors driving the policies in the sector. This paper first presents data on the state of roads in Sub-Saharan Africa (length, density, condition) as well as on investments in the sector over the last decades. It then demonstrates how most countries’ strategies are based on some misperceptions and recommends some changes to improve the developmental impact of roads investments. Better prioritization of investments, better procurement and contract management, better projects implementation and better monitoring are still needed, in spite of the efforts observed in the last 10 years.
Excellent report on the critical role that rural roads play in social and economic development. Highly recommended.
This research addresses the need for a more comprehensive approach to identifying roads at risk from climate change. Although subjective assessments can be useful, their inability to be conclusively tested makes it difficult to compare and rank their results across projects. In recognition of this, this paper develops techniques to provide simple, objective and transparent methodologies for identifying the point at which climate change is relevant for a road project’s design. Factors identified as being the most likely to impact roads are sea-level rise, deterioration from changes in average temperate and rainfall and changes in peak and average rainfall which result in inundation. Where potential risk factors are identified, a more detailed assessment of the risks is recommended.
This engineering bulletin presents the concepts of life‐cycle cost analysis (LCCA) for the purpose of comparing equivalent competing pavement design alternatives on an economic basis. All of the factors that should be considered in an economic analysis are explained, and guidance is given on the selection of values for LCCA‐sensitive factors. Single‐project LCCA examples are provided for a local road, a highway and an airfield. Advanced LCCA topics also are discussed, including, probabilistic analysis, the impact of pavement service life on a roadway network, the role of LCCA in pavement type selection and consideration of material price volatility.
TRB’s National Cooperative Highway Research Program (NCHRP) Report 713: Estimating Life Expectancies of Highway Assets. Volume 1 addresses how to apply a methodology for estimating the life expectancies of major types of highway system assets. The methodology is designed for use in lifecycle cost analyses that support management decision making. Volume 2 describes the technical issues and data needs associated with estimating asset life expectancies and the practices used in a number of fields—such as the energy and financial industries—to make such estimates.
TRB’s National Cooperative Highway Research Program (NCHRP) Report 713: Estimating Life Expectancies of Highway Assets. Volume 1 addresses how to apply a methodology for estimating the life expectancies of major types of highway system assets. The methodology is designed for use in lifecycle cost analyses that support management decision making. Volume 2 describes the technical issues and data needs associated with estimating asset life expectancies and the practices used in a number of fields—such as the energy and financial industries—to make such estimates.
In the context of transport policy, travel time is widely treated in purely economic terms, with the key aim of 'saving' or reducing what is seen as unproductive travel time. The current emphasis on travel time savings uses mean values for different modes, and assumes that people want to minimise (save) their travel time irrespective of what mode they use. Our work explored the possibility that some people value their travel time, particularly for commuting, and may not want to reduce it, irrespective of what mode they usually use. We examined a range of issues through data gathered from an online survey of approximately 500 Auckland- and Wellington-based commuters, including the following: • Does the bulk of commuters' existing commute trip travel time lie above or below their 'ideal' commute travel time - what are the implications for the value used for travel time savings? • How do people use the time they spend commuting and do they value this time? Even if they 'do nothing' on their commute trip, do commuters value it for its 'anti-activity' nature? • Is how they value their commuting travel time related to the purpose for travel, their enjoyment of their current job or course of study, and/or to other attitudes about travel mode and the environment?
This study focuses on the phenomenon of overbidding for toll road concessions. Overbidding refers to bidding beyond an asset’s worth, typically in the transport sector through the submission of over-optimistic projections of traffic and revenue. Overbidding for toll road concessions is jnternationally observed as bidders compete in many countries to win attractive (and potentially lucrative) long-term concession contracts. However, it can lead to project distress and commercial failure, dampening the enthusiasm for subsequent private sector investment. These are outcomes that concession grantors generally wish to avoid.   The emphasis in this report is on international experience and practice, within the toll roads sector and beyond. The aim is to build on lessons learned from elsewhere and to make recommendations to state and federal agencies in Australia on how overbidding for future concessions might be disincentivised.
Report looking at ways of enhancing rural road accessibility in the planning process.
Thesis which looks at the sustainability of highway infrastructure in terms of financial concerns and obligations.
Presentation by Cesar Queiroz on financing alternatives for roads including Road Funds and PPPs.
This paper develops a methodology and evidence to enable the assessment of wider economic impacts of transport. Quantifying these wider economic impacts is important as they are likely to be non-trivial in magnitude and they are currently excluded from the current appraisal methods. The paper derives New Zealand-based values of key parameters on imperfect competition benefits, increased competition benefits, labour supply benefits and job relocation benefits. The methodology and the key parameters are then applied to a transport project to demonstrate how the wider economic impacts can be quantified.
Climate change may damage road infrastructure to the potential detriment of economic growth, particularly in developing countries. To quantitatively assess climate change’sconsequences, we construct a climate-infrastructure model based on stressor-response relationships and link this to a recursive dynamic economy-wide modelto estimate andcompare road damages to other climate change impact channels. We apply this framework to Mozambiqueand simulate four future climate scenarios. Our results indicate that climate change through 2050 is likely to place a drag on economic growth.  
Report analysing results from six countries which compares the results of the economic analyses of the two cases: one is that of original cost benefit analyses that were conducted without the knowledge of economic downturn, and another of a hypothetical case where all relevant effects of economic downturn on the inputs of the analyses were assumed to be known at the time the analyses. The effect of economic downturn on the viability of projects can be identified as the difference in the outputs of these analyses in terms of economic summary indices such as net present values (NPV), NPV per unit length of road (NPV/km), economic internal rate of return (ERR), etc.
Report from the World Bank looking at the economic implications of climate change adaptations.
Report focussing on preventing death and destruction from natural disasters through governments increasing preventions. This report examines what it takes to do this cost effectively.
Report describing job creation from construction activities.
An excellent annual survey into fuel prices around the world.
Traffic forecasts are employed in the toll road sector, inter alia, by private sector investors to gauge the bankability of candidate investment projects. Although much is written in the literature about the theory and practice of traffic forecasting, surprisingly little attention has been paid to the predictive accuracy of traffic forecasting models. This paper addresses that shortcoming by reporting the results from the largest study of toll road forecasting performance ever conducted. The author had access to commercial-in-confidence documentation released to project financiers and, over a four year period, compiled a database of predicted and actual traffic usage for over 100 international, privately-financed toll road projects. The findings suggest that toll road traffic forecasts are characterised by large errors and considerable optimism bias. As a result, financial engineers need to ensure that transaction structuring remains flexible and retains liquidity such that material departures from traffic expectations can be accommodated.
Road infrastructure has been a key input in the economic growth and poverty reduction strategies of China and India. The two countries have used very different instruments for road financing with China mobilizing substantial resources through directed credit by state-owned banks and India heavily relying on international institutions and fuel taxes. However, current modalities of road financing will be insufficient to meet future investment needs requiring both countries to explore new mechanisms to attract private capital and expand the fiscal space of central and sub-national governments. Different instruments of resource mobilization and intermediation are assessed and compared extracting lessons that could be valuable to many developing countries. Facilitating the participation of the private sector in road development would require inter alia strengthening regulatory frameworks and deepening and broadening domestic financial markets. But given the strong public good characteristics of large segments of the road networks in China and India most of the funding for road construction and maintenance would need to come from the establishment of efficient and sustainable systems of earmarked road-related charges, including a fuel tax in China.
Road use charging is used by agencies for activities ranging from revenue collection, through demand and environmental management. It is applied on individual road segments, such as an expressway, or over geographic areas, such as zones in a city or even an entire country. When a government is considering implementing a road use charging system, it needs to consider four broad issues: (i) the technology to adopt; (ii) how it will be operated; (iii) how compliance will be enforced; and, (iv) the social impact of the system. This transport note addresses each of these four issues, and presents guidelines towards implementing a successful road use charging scheme.
Report from World Bank discussing the economic and developmental challenges faced by Pacific Island states.
Detailed report on road user charging options prepared for New Zealand government. It reviews overseas practices and identifies strengths/weakensses and makes proposals for NZ.
The purpose of this report was threefold:• To review the major approaches to assessing the national economic benefits of transport investment and, in particular, the role of Social Cost Benefit Analysis (SCBA);• To review the role of transport investment in national and regional economic development and, in particular, whether it has a special role to play in such development;• To review approaches for assessing regional economic and other distributional effects.
Paper on the contribution of the Peru Rural Roads Program to participation and civic engagement in rural Peru.
Paper which argues that travel time is not saved but instead conserved, raising questions as to the appropriateness on how it is used in economic analyses.
Road infrastructure has been a key input in the economic growth and poverty reduction strategies of China and India. The two countries have used very different instruments for road financing with China mobilizing substantial resources through directed credit by state-owned banks and India heavily relying on international institutions and fuel taxes. However, current modalities of road financing will be insufficient to meet future investment needs requiring both countries to explore new mechanisms to attract private capital and expand the fiscal space of central and sub-national governments. Different instruments of resource mobilization and intermediation are assessed and compared, extracting lessons that could be valuable to many developing countries. Facilitating the participation of the private sector in road development would require inter alia strengthening regulatory frameworks and deepening and broadening domestic financial markets. But given the strong public good characteristics of large segments of the road networks in China and India most of the funding for road construction and maintenance would need to come from the establishment of efficient and sustainable systems of earmarked road-related charges, including a fuel tax in China.
Presentation on congestion pricing policy in London including information on schemes implemented in 2003 and 2007.
Presentation by Siemens on electronic charging: the current situation and future trends.
The paper describes recent DFID and World Bank funded research on alternatives to gravel roads in Vietnam and Cambodia. A substantial range of proven, low-cost, rural road paving options is available and many of these have been tested in over 150 road sections constructed in South East Asia.
This paper examines the impacts of rural road projects using household-level panel data from Bangladesh. Rural road investments are found to reduce poverty significantly through higher agricultural production, higher wages, lower input and transportation costs, and higher output prices. Rural roads also lead to higher girls’ and boys’ schooling. Road investments are pro-poor, meaning the gains are proportionately higher for the poor than for the non-poor.
This paper describes the Rural Access Index (RAI), a headline transport indicator which highlights the critical role of access and mobility in reducing poverty in poor countries. The Index is part of the Results Measurement System for IDA 14. It is defined together with the official method of measurement which is on the basis of locally representative household surveys.
This paper presents evidence on the trade-expansion potential of improvements in Sub-Saharan Africa’s road network. This paper extends the previously-cited work by quantifying the economics of continental road network upgrading.
Report from Workshop. The main objective of the SSATP/World Bank consultants participation in the workshop was to provide feedback on whether or not the model can accommodate recent developments in pavement and surfacing technology as highlighted in the SADC Guideline on Low-volume Sealed Roads (LVSRs).
Paper examines the relationship between the terms of loan contracts and project risk factors for those project finance transactions in which the public sector retains a vested interest: public-private partnerships (PPPs).
The objective of this research project, carried out in 2003 and 2004, was to interview decision makers in cities where some form of road user charging has been introduced (and where it is being mooted or failed to come to fruition) to ascertain if there is any commonality in the factors which drove the successes and failures.
Report on study undertaken to examinethe implications of road tolling policies applying to selected major roading projects in larger urban areas, and in particular the traffic, environmental, economic and financial implications.
The release of the manual is designed to cover the basic concepts of economic evaluation for transport projects and specific procedures for the evaluation of road infrastructure projects.
This report presents how citizens, companies, regions and states all benefit from the continuous growth in road transport demand and how investing in road infrastructure benefits the economy as a whole. The report further highlights how technological trends, combined with forward-looking policies, can contribute to achieving safe, efficient and affordable mobility for European citizens.
This report summarises a review of toll road development in a number of Provinces in China. The objective of the report is to examine the enabling environment for toll road development and operation, the various approaches used in a selection of provinces related to organisation of their toll roads, and the linkage and structure of private sector investment in toll roads and some of the best practice lessons that can be used to guide further development of the National Trunk Highway System and other linked toll roads throughout China.
The objective of the study was to be an input for the improvement of the design of rural road components to achieve sustainable benefits for the poor. The study focused narrowly and deeply on selected case study villages within a project area, enabling an understanding of the factors that influence impacts on poverty.
Economic evaluation notes on the meaning, and calculation of NPV, IRR and Modified IRR.
Economic evaluation notes on the framework for economic evaluation of transport projects, social considerations etc.
Brief note on undertaking economic analyses on low-volume roads.
This paper reports work carried out by the World Bank to analyze the linkages between urban poverty and transport in Mumbai, India. The analysis draws on a household survey and focus group discussions. The goal of this study is to better understand the demand for transport services by the poor, the factors affecting this demand, and the inter-linkages between transport decisions and other vital decisions such as where to live and work.
This study examines the global experience with private toll roads and reviews eight projects, six in developing countries and two in industrial countries. The study examines common elements in toll road financings and highlights key public-private risk-sharing issues relating to the large amounts of private financing required for these investments.
Economic evaluation notes on the extent to which project level distributional analysis of benefits can be undertaken and how poverty impact indicators can be developed.
This is a report on the second study undertaken by IT Transport with financial support from the Department for International Development (DFID). It was designed to test the applicability of conventional Stated Preference and Revealed Preference models for valuing the time savings of rural travellers in least developed countries (LDCs) and to develop and demonstrate a robust methodology for estimating values of travel time savings which could be used in developing countries.
This paper compares the methods of using the Road User Charge model and allocating according to asset value with Tanzania as an example.
The guidance document describes a generic procedure for calculating the asset value of highway infrastructure assets. Specific guidance is provided for roads, segregated footpaths and cycle routes, structures, highway lighting, street furniture, traffic management systems, off-highway drainage and land (associated with the highway).
Transport Note TRN-28. This note presents a number of policy options to improve basic access and promote the mobility of Pakistan's rural population in support of the Government's Poverty Reduction Strategy.
Report on four guiding principles on using infrastructure to reduce poverty. This report elaborates these guiding principles and their application to various infrastructure sectors, including transport, energy, information and communication technology, and water, sanitation and irrigation. This framework and its findings should help broaden consensus among donors on how best to enhance infrastructure’s contribution to economic growth and poverty reduction.
Paper on the need for good transport systems, issues facing developing countries in relation to roads maintenance, and possible solutions.
This note highlights key issues relating to Government guarantees and other forms of public support in the process of trying to attract private investment into toll roads in Indonesia. It first discusses some relevant international experience on toll roads followed by issues specific to Indonesia.
This document summarises a generic approach for the evaluation of Euro-Regional projects.
Evaluation guidelines concerning a common approach to the evaluation and reporting of project results and provides guidance on project evaluation. The report also provides a base for further development of common PI's and measurement techniques.
This Paper describes and documents the methods and outcomes of ARRB Transport Research response to the Challenge Case Study using the Pavement Life Cycle Analysis and Treatment Optimisation (PLATO) system.
Powerpoint presentation of vehicle overloading photos
This technical note presents a methodology for an analytical study done to access economically justified levels of road works expenditures on unpaved roads with different traffic levels.
The objectives of this report are to enhance current understanding of how transport and energy infrastructure and services contribute to poverty reduction, to fill knowledge gaps, and to identify lessons learned and good practices.
The Brookings Institution Policy Brief discussing Government options for reducting traffic congestion.
This study provides a framework for understanding overall vehicle economics and key economic variables in relation to individual ownership costs, operating decisions and replacement intervals.
The paper reports on an empirical study to develop a methodology for valuing rural travel time savings in the LDCs. Apart from identifying the theoretical and empirical issues in valuing travel time savings in the LDCs, the paper presents and discusses the results of an analysis of data from Bangladesh.
Study investigating the optimal axle load for roads in India.
Papers presented at first conference on road funds.
Paper on rural road economic evaluations and the necessity to include social benefits to make them economically justifiable.
This report is part of the strategy to promote trade competitiveness within the East Asia and Pacific Region. The paper presents an overview of the logistics issues facing East Asia countries and proposes a development agenda for them. This is based on a recognition that the countries have basic differences in their level of development, extent of openness, and composition of trade.
TWU-47. The purpose of this paper is to assist rural transport planners, rural road agencies, donor agencies, local governments, and communities in the design and appraisal of rural transport infrastructure (RTI) interventions. It especially focuses on how RTI can contribute to poverty reduction.
TWU-32. This study is an international edition of a report on managing and financing roads first published as a World Bank technical paper in the Africa Technical Series. The paper has been expanded to include examples of sound management and financing practices from all parts of the world—drawing on examples from industrial, developing, and transition economies—and to include more details on institutional management structures and road funds.
Economist Guide provides guidance on the appraisal of investments intended to improve access in rural situations where existing traffic levels are low. It deals with both sectoral and project based approaches to appraisal.
This chapter of the Economist Guide provides guidance on the appraisal of investments intended to improve access in rural situations where existing traffic levels are low. It deals with both sectoral and project based approaches to appraisal.
This guide points economists in the direction of relevant guidance that already exists for projects and programmes in this sector. It also reflects the recommendations from the ODA Synthesis of Road Evaluations and Experience (Evaluation Report EV587, 1996) and provides additional guidance on two specific roads projects issues: (i) the valuation of small time savings; and (ii) the optimal timing of roads investments.
The main objective of this study by P. Christensen is to address the issue of rural roads in Saskatchewan which are suffering under increased volumes of heavy truck traffic. The Dept of Highways & Transportation is consideirng a range of haul policy and road structure investment options.
This report presents the findings of a regional technical assistance (TA) 5871: Road Funds Strategy, which was carried out between April 2000 and March 2001 to examine the problem of road funding and propose solutions.
TWU-47. The paper is based on detailed reviews of experience in seven African countries in which the World Bank has had some involvement in the establishment of second generation road funds (Kumar, 2000) and one (Uganda) where government sought to improve the performance of the sector but rejected the arguments for a road fund (Kumar, 2001). Experience in other countries for which there is less complete data is referred to where appropriate. The commentary is organized by element rather than by country. The article concludes with a judgment on what now needs to be done.
TWU-48 Poor access to transport in the rural areas of developing countries constrains economic and social development and contributes to poverty. Improving rural people’s access to essential services requires improving mobility, through better transport infrastructure and services and attention to the location, quality, and price of facilities. Better mobility gives people better access to services (education, health, finance), markets, income-earning opportunities, and social, political, and community activities.
The Working Group investigated current evaluation studies of major transport infrastructure projects in OECD Member countries with an aim to identify impacts of transport infrastructure investment on regional development and to improve current appraisal methodologies.
This article presents results from the first statistically significant study of cost escalation in transportation infrastructure projects. Based on a sample of 258 transportation infrastructure projects worth US$90 billion and representing different project types, geographical regions, and historical periods, it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.
Paper looking at the effect of geography on costs and trade.
This document looks at alternative ways of providing a secure and stable source of finance for roads (excluding toll roads and concessions – see main node on Toll Roads and Concessions) without introducing undue fiscal inflexibility. It focuses on the key issues you need to know about financing roads through the government’s general budget, or through a second-generation off-budget financing mechanism.