Modernisation of Regional Roads Evaluated Using Ex-Post CBA

Petr Halámek, Radka Matuszková and Michal Radimský
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Petr Halámek: Faculty of Economics and Administration, Masaryk University, 602 00 Brno, Czech Republic
Radka Matuszková: Faculty of Civil Engineering, Brno University of Technology, 602 00 Brno, Czech Republic
Michal Radimský: Faculty of Civil Engineering, Brno University of Technology, 602 00 Brno, Czech Republic

Sustainability, 2021, vol. 13, issue 4, 1-20

Abstract: The aim of this evaluation is to verify the telling value of the Cost and Benefits Analysis (CBA) of regional roads modernisation based on an ex-post evaluation of the investments and their impacts on the incidence of traffic accidents. A set of 144 projects were the subject of evaluation. The analysis of the actual investment costs confirmed the assumption that the majority of projects were planned with a sufficient provision. When compared with the costs foreseen for the entire set of projects, the total reduction of actual costs spent was over 11%. The investigation of project impacts on traffic accidents was based on an analysis done prior to and after construction by using the Czech Police database. The measurement results show only minimum changes in the incidence of traffic accidents in the scenario prior to and after project completion. This however strongly contradicts the project goals declared, because the projects were anticipating almost zero accidents with a fatality and a 50% reduction of accidents with health consequences. However, a slight increase in road fatalities and in light and serious injuries was measured. These facts have a significant impact on the Net Present Value (NPV) and the weighted profitability index for the entire set of projects dropped from 16.7% to −2.8%. The key recommendation is to eliminate the impact on traffic accidents in the case of project evaluations processed ex-ante for projects focused only on a reconstruction or modernisation of existing roads.

Keywords: ex-post CBA; road modernisation; incidence of traffic accidents; decision-making process (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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