TII Roadshow 2017 Project Appraisal Guidelines for National

TII Roadshow 2017 Project Appraisal Guidelines for National Roads Eoin Gillard Head of Strategic & Transport Planning Transport Infrastructure Ireland Transport Planning Society 22 nd November 2017

Introduction

What we do Strategic & Transport Planning Section ‒ Project Appraisal Guidance ‒ Audit of National Roads Projects ‒ Appraisal of Light Rail projects ‒ National Transport Model

TII Project Appraisal Guidelines for National Roads Objective: To ensure consistent appraisal of all TII projects and compliance with DTTAS and DPER requirements What is PAG? • ‘How to’ guidelines • Detailed guidance on: • Transport modelling • Economic appraisal • MCA • Standard parameters for model inputs

TII Project Appraisal Guidelines for National Roads

Structure of PAG Unit Topics discussed 1. 0 2. 0 3. 0 4. 0 5. 0 Introduction Appraisal Deliverables Project Brief Consideration of Alternatives Transport Modelling 6. 0 CBA 7. 0 8. 0 9. 0 12. 0 Multi-Criteria Analysis Business Case Post Project Review Minor Projects (€ 5 m-€ 20 m) 13. 0 Walking & Cycling Facilities 14. 0 Minor Projects(€ 0. 5 m-€ 5 m) 16. 0 Data Analysis Techniques Detailed Info Project Appraisal Plan PB Template • Construction of Models • Data Collection • Scheme Costs • TUBA & COBALT • Sample CBA • Service Areas MCA Guidance BC Template & Sample • Forecasting • Sample TM Report • Wider Impacts • Reliability & Quality • National Parameter Values PABS Template Simple Appraisal Tool Minor Project PABS Template Estimating AADT Expansion Factors for Short Period Counts

Minor Projects (€ 5 m - € 20 m)

Structure of PAG Unit Topics discussed 1. 0 2. 0 3. 0 4. 0 5. 0 Introduction Appraisal Deliverables Project Brief Consideration of Alternatives Transport Modelling 6. 0 CBA 7. 0 8. 0 9. 0 12. 0 Multi-Criteria Analysis Business Case Post Project Review Minor Projects (€ 5 m-€ 20 m) 13. 0 Walking & Cycling Facilities 14. 0 Minor Projects(€ 0. 5 m-€ 5 m) 16. 0 Data Analysis Techniques Detailed Info Project Appraisal Plan PB Template • Construction of Models • Data Collection • Scheme Costs • TUBA & COBALT • Sample CBA • Service Areas MCA Guidance BC Template & Sample • Forecasting • Sample TM Report • Wider Impacts • Reliability & Quality • National Parameter Values PABS Template Simple Appraisal Tool Minor Project PABS Template Estimating AADT Expansion Factors for Short Period Counts

Minor Projects (€ 0. 5 m - € 5 m) – Unit 14. 0

Common Issues

Common Issues in Appraisals / Business Cases ‒ Problem Definition ‒ Objective Setting ‒ Options and Alternatives ‒ Multi-criteria analysis ‒ Lack of consideration outside of Economic Evaluation

Challenges

Value of Time Dominates Average Breakdown of Road Scheme Benefits ‒ Time Savings are key ‒ High volume routes => More Benefits ‒ Potential Issues for scheme selection AADT Time Saving Total Time saving per user (hrs) (hrs/day) Vo. T Total Benefit Annual Benefit (€) (€/day) M 50 160, 000 0. 0167 2667 € 11. 86 € 31, 626. 67 € 11, 543, 733. 33 M 4 27000 0. 0167 450 € 11. 86 € 5, 337. 00 € 1, 948, 005. 00 N 5 5, 600 0. 0167 93 € 11. 86 € 1, 106. 93 € 404, 030. 67

Discount Rates – International Comparison What is the value of € 1 M in 30 years? Country Discount Rate Value World Bank 12. 0% € 37, 383 New Zealand 8. 0% € 107, 328 Australia 7. 0% € 140, 563 USA 7. 0% € 140, 563 Ireland 5. 0% € 242, 946 Sweden 3. 5% € 368, 748 UK 3. 5% € 368, 748 Germany 3. 0% € 424, 346 Netherlands 2. 5% € 488, 661

Discount Rates – Alternative for Road Schemes? TII research on the use of hyperbolic discounting as transport projects have a longer lifecycle M 4/M 6 Worked Example PV Benefits PV of Capital Costs NPV BCR Exponential 30 years Exponential 60 years Hyperbolic 60 Combined 60 years 1, 357 2, 846 2, 959 3, 576 1, 490 -133 1, 356 1, 469 2, 086 0. 91 1. 99 2. 40

Future Considerations ‒ How to justify low volume road schemes in complex environments ‒ Appraisal of technology in transport – is Vo. T the answer? ‒ Cross cutting effects – transport influenced by or enabling other policies ‒ Is transport appraisal a victim of its own success?

Thank You