Cost benefit analysis and ex-post evaluation for railway upgrade projects

Abstract

Infrastructure investments have an important role in a coun IntroductionAs Cost-Benefit Analysis (CBA) is an applied social science, it is mainly based on assumptions. Therefore a CBA can be only as good as its assumptions are. Infrastructure investment projects regularly experience cost and time overruns. Research led by Flyvberg has suggested that misrepresentation and optimism bias are primary causes for overruns [6]. Current researches are mainly focused on new construction and limited attention was devoted to the infrastructure upgrade projects and their impacts on the cost, schedule and traffic. The upgrade works can cause significant disturbance to the existing infrastructure normal operation, especially in rail projects.The objective of this article is to present the current limitations of CBA methodologies applied in Europe [12, 13] using cases in Hungary. It will also collect and summarize the main research and findings in the field of ex-post evaluation.Two Hungarian railway upgrade projects were evaluated economically. In each selected project, the original ex-ante CBA will be recreated and a new ex-post evaluation will be implemented based on the available information. The ex-ante and ex-post results will be compared and further conclusions will be drawn. In addition to the economic analysis, the financial losses were evaluated, since these projects caused significant disturbances for the operations during the construction period.Travel time variability was examined closely. Calculations were made through a case study in order to determine the importance of this impact.A concise literature review of the CBA methodology and the limitation of CBA can be found in earlier studies [10,11], therefore it is not repeated in this article.

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