Zbornik radova Koridor 10 - Kirilo Savić

3rd International Scientific and Professional Conference
CORRIDOR 10 - a sustainable way of integrations
- Condition “0”represents all the renewals on the main lines of public railway infrastructure that
enables to achieve category D4;
- Condition »Z1« represents all measures that according to estimation of future traffic flows
enable sufficient railway capacity until the year 2020;
- Condition »Z2« represents all measures that according to estimation of future traffic flows
enable sufficient railway capacity until the year 2030.
In the first step we made calculation of profitability indicators for investments on each single main line
and in the next step we performed common calculation of profitability indicators for all investments in
lines on corridors V. and X. We considered next railway lines: s.b.-Dobova-Zidani Most, Zidani Most-
Ljubljana, Ljubljana-Jesenice-s.b., Zidani Most-Pragersko, Pragersko-Šentilj-s.b., Pragersko-Hodošs.b.,
Ljubljana-Sežana-s.b., Divača-Koper.
The main effects that were considered in calculations of profitability indicators for conditions
“Z1”and“Z2”are: increase of line capacity, increase of traffic safety, optimisation of traffic management
of public railway infrastructure, savings in exploitation costs of traction vehicle/unit, savings in travel
time, prevention of outflow of freight and passengers from railway transport to road transport, savings
in energy consumption.
Investments also bring effects/benefits that were not monetised due to short time for elaboration and
strategic level of the study. Those effects should be considered in further more detailed cost benefit
analyses of proposed investments, because those benefits will contribute to a higher economic
efficiency of investment measures. It refers mainly to improved level of technical equipment of the
public railway infrastructure, reduction of specific energy consumption for traction with additive effects
due to electric energy recuperation, reduced road congestion, prevented costs for construction of
additional highway lines, road user’s benefits, value of used material, etc.
As a profitability criteria the following indicators were used: internal rate of return 3 (IRR), net present
value 4 (NPV) of the investment, benefit cost ratio 5 (B/C) and relative net present value 6 (RNPV) of the
investment, taking into account the 7 % discount rate.
We calculated profitability indicators for an observation period of 41 years, namely from the year 2010
to 2050. All calculations were carried out at constant prices of 2010.
Financial analysis was carried out from the point of view of the infrastructure owner. Among costs we
considered investment costs, public railway maintenance costs (routine and major), traffic
management costs and among benefits we considered inflows from the charging of user fee for the
use of public railway infrastructure and residual value (only for the new-construction of the public
railway infrastructure in condition“Z2”).
In economic analysis we considered also costs and benefits in terms of the overall national benefits
and are not necessary expressed in cash flows and were therefore not included in financial analysis.
Costs that were converted form financial values in economic values (using conversion factors) were:
investment costs, maintenance costs of public railway infrastructure and traffic management costs. On
the benefit side we considered residual value of the investments (for new-construction), savings in
exploitation costs of trains, travel time savings, prevented costs of exceptional events, prevented
external costs, energy savings and road user’s benefits.
A conservative approach has been used in the calculations, so that the input elements were
considered more realistic and also examined in the context of sensitivity analysis.
Calculated financial profitability indicators of investments were negative or less than 1, which for major
infrastructure investment is not unusual. Investments in infrastructure generally have negative effect
for the investor himself and they do not turn a profit, but they are very important in social terms, as
shown by the economic profitability indicators.
3 Internal rate of return is the discount rate at which a stream of costs and benefits has a net present value of zero. Internal rate
of return is compared with discount rate, in order to evaluate the performance of the proposed project.
4 Net present value is the sum that results when the discounted value of the expected costs of an investment are deducted from
the discounted value of the expected revenues.
5 Benefit cost ratio is the net present value of project benefits divided by the net present value of project costs.
6 Relative net present value is the ratio between net present value of the project and discounted investment costs.
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