Features of the Economic Efficiency Appraisal of Transportation Projects by the Cost-Benefit Analysis Method

Ruslan Gulidov, Pavel Pokrashenko, Nikolay Strelov and Elena Zadirej ()
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Elena Zadirej: Federal Autonomous Scientific Institution «Eastern State Planning Centre»

Working Papers from The Eastern State Planning Center

Abstract: In this review, based on the analysis of the theory of the Cost-Benefit Analysis method (CBA) and its application, the authors determine the presence of features specific to the application of the method in the transport sector. The main stages of the CBA fell into the area of our attention cover assessment of the effects of the project implementation; conversion of market prices to “shadow” ones; identification of the social discount rate; assessment of the terminal value of the project and risk and sustainability analysis. The paper shows that the main features of the application of the CBA to transport projects are concentrated on assessing the effects of the project and assessing the residual value of the project. Such stages as the conversion of market prices into “shadow” ones, the calculation of the social discount rate and risk analysis do not have industry specifics. In addition to the existing practice, the authors found that for transport projects, it is necessary to separately appraise the effects at the stages of construction and operation of the transport projects since they can be multidirectional. It is also substantiated that the list of effects from the implementation of the transport project should include the effect of income from increased employment during the construction phase, but only if the economy is not in a state of full employment output in the “without project” situation.

Keywords: PROJECT VIABILITY; ECONOMIC EFFICIENCY; INVESTMENT PROJECT; CBA; SOCIAL DISCOUNT RATE; TRANSPORTATION PROJECT (search for similar items in EconPapers)
JEL-codes: E22 H21 H43 H54 R41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2022-12, Revised 2023-01
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