insights on transport project evaluation techniques sudhir gota clean air initiative for asian...
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Insights on Transport Project Evaluation Techniques
Sudhir GotaClean Air Initiative for Asian Cities Center
Training on the Transport Co-benefits Guidelines27-28 October 2010Metro Manila
How to evaluate projects?
∑ COSTS
∑BENEFITS
Skillful quantification of project implications. Assumes road user as a consumer.A Physician would never think of expressing general state of health by a single indicator – Janos Kornai (1979)
NPV,IRRBCRFYRR etc
Different Approaches/Methodologies
3
“There exists different approaches to evaluate projects, calculate cost and benefits and one needs to use appropriate ‘tools’ depending upon data, accuracy, resources, requirement etc.”
Making a decision on which decision making tool to use is a big problem in itself !!
Source : http://interacc.typepad.com/synthesis/2009/09/hammers-and-nails.html
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Costs of Transportation
1. Transport Infrastructure costs2. Vehicle costs – Fixed and Variable (Fixed Costs – Vehicle
purchase, Registration cost, Taxes, Insurance. Variable Costs - Fuel, Oil, Tires, Parking, Toll, Maintenance, Repair)
3. Travel Time costs4. Accident and safety costs5. Environmental costs – Air and Noise pollution and Climate
impact
Costs – Transportation User Costs
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Vehicle Operating CostsTime Costs
• Fuel• Lubricant oil• Tire wear• Crew time• Maintenance labor• Maintenance parts• Depreciation• Interest• Overheads
• Passenger time• Cargo holding time
Accidents Costs
•property damage•administration costs•lost output•medical costs•human costs
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Benefits in transport projects ( 1990’s)
“Although there is no consensus on the nature of the impact of infrastructure on growth, many studies have indicated that the role is substantial and frequent, and often greater than that of investment in other forms of capital.BUT there is need to explain why the findings vary so much from study to study. Until this problem is resolved, results are neither specific or solid enough to serve as a basis for designing policies for infrastructure investment.”
Box 1.1, page 15
World Development Report, 1994
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Benefits in transport projects ( 2000’s)
SACTRA Report - Little empirical evidence of broader impacts, and what there is is contradictory. Some indicates significant impact on rates of economic growth, most suggests that there is some impact but that it is small. The state of the art is poorly developed, and the results do not offer convincing evidence of the size, nature or even direction of regional and local impacts.
ADB - Based on the available econometric literature reviewed, roads appear to have strong indirect and direct effects on poverty reduction, and these are even clearer when roads are combined with complementary investments, such as schooling.
Multi Criteria Appraisal
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Multi-criteria appraisal overcomes some of the problems of traditional approaches by allowing the decision-maker to assess the weights to be assigned to different indicators, objectives and impact groups.
Preferences differ from decision maker to decision maker, so the outcome depends on who is making the decision and what their goals and preferences are.
1. Importance of Dynamic Baseline (2)
Modeshift to Ahmedabad BRTS
1st
Month2nd
Month3rd
Month4th
Month5th
Month6th
Month7th
Month8th
MonthWalk 7 4.2 3.6 1.3 4.9 3.9 3.6 0.8Cycle 7 3.8 5.8 2.2 3.3 1.2 2.3 1.9
Rickshaw 14 18 25.4 25.2 15.3 10.9 26.3 13.22-Wheeler 12 21 16.7 20 19.2 21.2 14.1 204-Wheeler 3 4 6.5 11.3 9.8 6.7 1.3 0.9
Bus 57 49 42 40 35.5 44.4 46.8 48.7Shared-Rickshaw 0 0 0 0 12 11.7 5.6 14.5
Average passenger/day 17315 23086 31327 35672 35166 37184 48789 51207
Source : Ahmedabad Municipal Corporation
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2. Ex-ante and Ex-post require different approaches
Modified from John Rogers, World Bank
SKETCH ANALYSIS
DETAILED ANALYSIS
3. Estimating Speed is critical
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CO2 PM NOx
SPEED 2W 3W Cars LCV Bus HCV Car LGV Bus HGV Car LGV Bus HGV15 -70 -70 -61 -69 -61 -61 -43 -30 -21 -60 -43 -35 -56 -4420 -43 -43 -34 -38 -51 -51 -26 -18 -16 -55 -32 -23 -46 -3625 -26 -26 -20 -22 -39 -39 -18 -10 -12 -45 -23 -14 -37 -2830 -21 -21 -12 -18 -23 -23 -11 -4 -9 -35 -16 -8 -29 -2235 -7 -7 -5 -6 -15 -15 -6 -1 -7 -25 -10 -3 -21 -1540 -4 -4 -3 -3 -9 -9 -3 1 -4 -16 -5 -1 -14 -1045 -1 -1 0 0 -3 -3 -1 1 -2 -7 -2 0 -7 -450 0 0 0 0 0 0 0 0 0 0 0 0 0 055 0 0 -1 -1 2 2 0 -2 2 6 1 -2 6 660 -2 -2 -3 -4 5 5 -1 -4 3 10 1 -4 13 965 -4 -4 -6 -7 5 5 -3 -8 3 12 1 -7 13 970 -8 -8 -9 -12 6 6 -6 -11 3 12 -1 -11 13 975 -12 -12 -13 -16 0 0 -9 -15 1 12 -3 -15 10 780 -18 -18 -18 -23 -4 -4 -13 -19 -1 10 -5 -19 7 485 -23 -23 -24 -29 -7 -7 -17 -23 -5 7 -9 -24 4 190 -30 -30 -30 -37 -12 -12 -22 -28 -8 4 -12 -28 1 -295 -37 -37 -36 -45 -16 -16 -27 -32 -8 -14 -16 -33
100 -37 -37 -36 -45 -16 -16 -32 -36 -8 -16 -20 -38
4. Be careful with Speed flow equations
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Not accurate after V/C ratio exceeds 1
Source : Green Transport- ADB, HCM-2000 and IRC
5. Vehicle Operating Costs – Roughness(1)
16Source : modified from Green Transport- ADB
KMPLRougness (m/km) Truck-Small
Truck-Medium Truck-Large Car Mini-Bus
Large Bus Trailer
2 7.11 3.25 2.90 13.59 4.07 3.31 1.943 7.06 3.22 2.86 13.55 4.05 3.28 1.914 7.00 3.19 2.83 13.51 4.04 3.25 1.895 6.94 3.16 2.80 13.48 4.03 3.22 1.866 6.89 3.13 2.76 13.44 4.01 3.19 1.847 6.84 3.10 2.73 13.40 4.00 3.16 1.828 6.78 3.08 2.70 13.37 3.99 3.14 1.799 6.73 3.05 2.67 13.33 3.98 3.11 1.77
10 6.68 3.02 2.64 13.30 3.97 3.08 1.7511 6.63 2.99 2.61 13.26 3.95 3.05 1.7312 6.57 2.97 2.58 13.23 3.94 3.03 1.7113 6.53 2.94 2.56 13.19 3.93 3.00 1.6914 6.48 2.92 2.53 13.16 3.92 2.98 1.6715 6.43 2.89 2.50 13.12 3.91 2.95 1.65
Assuming roughness is decreased from 13 to 2 for 1 km, assuming 1000 large buses/day
= savings of 400,000 Pesos/Year/km on fuel ONLY
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6. Transportation User Costs (2)
Based on a World bank review of 44 projects
1. Fuel Costs are 38% (say 40%) of total VOC for ASEAN
2. Travel Time costs are 12% of VOC for ASEAN
3. Maintenance Part and Labor are 12% of total VOC for ASEAN
Thus, in case you have CO2, back calculate fuel use and then derive VOC !!
7. Include Induced Traffic
20Source : ADB 2010
Impact of Induced traffic
0.0
0.5
1.0
1.5
2.0
2.5
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Kilo
tons
of C
O2
/Km
BAU e=0 e=0.25
e=0.5 e=0.8 e=1
10. Impact of Construction
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1. construction causes delay, increased and slow vehicle operation, accident, and environmental costs
2. A typical 4 lane high speed road generates 2000 tons/km of CO2 emissions.
3. In a metro - construction emissions are of high intensity and it can range from 3 to 12 years of operation emissions
Source : Mikhail Chester el al.
11. Select appropriate Project lifecycle
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-4000-2000
02000400060008000
100001200014000
CO2 saved (20 years) with construction
CO2 saved (10 years) with construction
Tons
/Yea
r/km
Impact of Project Life on Emissions
Source : ADB (2010) – Reducing Emissions from Transport Projects
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12. Consider Technological Improvements
1. By assuming an annual increase in fuel efficiency of 1% and 3% in a typical Indian expressway project , it has been estimated that the decrease amounts to 4700 tons/km, 12600 tons/km cumulatively over twenty years’ lifecycle or in other words reductions of 11% and 29% from without change in technology scenario.
2. The fuel can become less carbon intensive, more cleaner and thus may change the emission profile. Analyst needs to consider such improvements in future.
3. Though the impact would be similar in with and without project case but it would prevent inflating the numbers !!
13. Co-benefits in Economic Analysis
EIRR
10.73% 10.37%
18.09%20.96%
13.66% 13.11%
31.17% 32.22%
0%
5%
10%
15%
20%
25%
30%
35%
EIRR WithVOC + VOT
+ CO2
EIRR WithVOC + VOT
EIRR WithVOC + VOT
+ CO2
EIRR WithVOC + VOT
EIRR WithVOC + VOT
+ CO2
EIRR WithVOC + VOT
EIRR WithVOC + CO2
EIRR WithVOC
Laos- Rural AccessRoads Project (c1)
Laos- Rural AccessRoads Project (c2)
(Ho Chi Minh City–LongThanh–Dau Giay
Expressway
Surat ManorExpressway
EIRR
Quantifications with CO2 with 85 $/ton, PM10 with 15000 $/ton and NOx as 3500 $/ton.
CO2 would make significant impact on economic analysis ONLY when it exceeds 400$/ton
Source : ADB 2010
Find out more:
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www.cleanairinitiative.orgwww.cleanairinitiative.org/portal/GreenTrucksPilot
CAI-Asia Center
“Air Quality in a Changing Climate”
www.BAQ2010.orgFor information email: baq2010@cai-asia.org
Bert Fabian, Transport Program Managerbert.fabian@cai-asia.org
Sudhir Gota, Transport Specialistsudhir@cai-asia.org
Alvin Mejia, Environment Specialistalvin.mejia@cai-asia.org
Unit 3505, 35th floorRobinsons-Equitable Tower
ADB Avenue, Pasig CityMetro Manila 1605
Philippines
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