Transformational transport infrastructure: cost-benefit analysis challenges

Abstract

Institute for Transport Studies 38-40 University Rd University of Leeds Leeds LS2 9JT Research interests:James Laird (J.J. Laird@its.leeds.ac.uk): cost benefit analysis; value of travel time savings; rural transport appraisal; wider economic benefits; and demand forecasting.Chris Nash (C.A.Nash@its.leeds.ac.uk): rail transport; transport appraisal; transport pricing and externalities.Peter Mackie (P.J.Mackie@its.leeds.ac.uk): cost benefit analysis; transport appraisal, value of travel time savings; wider economic benefits; and bus regulation ii TRANSFORMATIONAL TRANSPORT INFRASTRUCTURE:COST BENEFIT ANALYSIS CHALLENGES ABSTRACT Current economic conditions are dominated by the imperative for growth, so the planning context to transport infrastructure is increasingly one of supporting economic growth. This change creates challenges for the appraisal of transport projects particularly transformational ones. In this paper, the technique of transport cost-benefit analysis (CBA)is reviewed with particular emphasis on incorporating the wider economy impacts. CBA is a robust framework, but when dealing with truly transformational projects where land uses change, CBA methods need to develop. Further empirical evidence on the scale of economic change induced by the change in accessibility is also needed.

Can transport infrastructure change regions’ economic fortunes? Some evidence from Europe and China

“…However, this attempt to extend the cost-benefit analysis framework to encompass wider impacts may not be the most appropriate way forward to understanding the overall impact on regional development from a major HSR project. Laird et al (2014) have attempted to map out the requirements of an extended CBA approach and contrast this with an alternative view that tries to go straight to the impact on output or gross value added (GVA). Models that try to do this have been around for many years in the form of land-use transport interaction (LUTI) models (Wegener, 2011).…”

Can high-speed rail have a transformative effect on the economy?

“…Similar issues have been raised in the context of improving communications between the cities of Northern England (SERC, 2009). Laird et al (2014) have shown the limitations of conventional cost-benefit analysis in dealing with investments of this type. But attempts to go beyond conventional cost-benefit analysis approaches to try and capture this effect in terms of a direct impact on output (KPMG, 2013) have led to serious criticism, in terms of both the assumptions and the net result (Overman, 2013).…”

High-speed rail to prosperity? Assessing the role of transportation improvement in the urban economy

“…The coverage of the CBAs of conventional HSR projects naturally varies from country to country, but as a rule, these analyses tend to cover the construction costs of transport projects, the operation and maintenance costs of associated transport services, direct user benefits, and a restricted list of externalities, such as transport safety impacts, congestion, overcrowding and emissions (Ollivier et al, 2014). However, there seems little doubt that there are wider impacts from HSR investment that are not captured by conventional CBA (Laird et al, 2014;Venables, 2007). In particular, the regional economic effect of a large-scale HSR network is considered nontrivial, which should be carefully estimated and added to the extended CBA.…”