Guide to COST-BENEFIT ANALYSIS of investment projects - Ramiri

- finally, there is the traffic that will remain on the existing network which will take advantage of thereduced congestion thanks to the traffic diverted to the new motorway. Traffic reduction willcontribute to a reduction in environmental emissions and noise.As for some users, the value of time savings would not outweigh tolls, the free-of-charge option wouldimply a higher volume of traffic on the motorway.Transport demand has been estimated for the entire corridor and for each of the two options it assessedagainst the BAU scenario. The most important inputs for the modelling process is the existing traffic dataand the macro-economic, socio-economic and demographic data for the base year, for the forecasthorizon (year 25) and for an intermediate year. After year 25, travel demand is assumed to remainconstant. The transport model is a classical one consisting of trips generation, distribution and assignment.The following Table 4.1 summarises the total freight and passengers flows along the corridor connectingthe two cities in the opening year of the new motorway:- the traffic on the existing network in the BAU scenario;- the traffic with the new free-of-charge motorway (diverted, generated and remaining on the existingnetwork);- the traffic with the new tolled motorway (diverted, generated and remaining on the existing network).Table 4.1Traffic forecastDAILY TRAFFIC AT THE OPENING YEAR*New motorwayDiverted from theexisting networkGeneratedTotal on themotorwayExisting networkBAU scenarioHeavy vehicles 7,086Passengers vehicles 114,542With the new free of charge motorwayHeavy vehicles 5,867 1,200 7,067 1,219Passengers vehicles 18,667 2,800 21,467 95,875With the new tolled motorwayHeavy vehicles 4,889 240 5,129 2,197Passengers vehicles 15,556 910 16,466 98,986*n. of standardised units4.1.3 Investment costsThe second step in the appraisal, in parallel with the forecast of the expected demand, has been tocalculate the financial costs of the new motorway. Financial investment costs have been provided by theproject engineers. Two separate estimates have been made, one for the free motorway and one for thetolled option. The costs for the second option are higher due to the need for segregated access ramps,equipment and buildings for collecting tolls. Costs have been disaggregated into the main type of worksand on the basis of cost components (labour force, materials, carriage and freight). This enables thesubsequent application of the conversion factors from financial costs into economic costs, see Table 4.3.For the investment costs, two sets of estimates have been produced: one for the free motorway and thesecond for the tolled option. In the latter case, the costs related to toll collections have been included. Thepersonnel, materials, freight and carriage costs have also been specified in this case.The technical life of the infrastructure is 70 years and its residual value, considering the differentcomponents of the investment, has been set at 40% of the initial value.The motorway construction will be completed in four years.131