Benefit Cost Analysis of transport projects: 9 No-Nos

  1. Failing to state assumptions clearly.
  2. Ignoring costs due to disruption during construction
  3. Showing ‘optimism bias’ in demand forecasts; project costs; downside risks
  4. Not accounting for full costs of base-case (or ‘do-minimum’) option.
  5. Double counting benefits, eg increased land values due to better accessibility
  6. Ignoring the costs of items simply because they do not have been paid in cash, eg opportunity costs of existing land
  7. Ignoring non-infrastructure options which do not require capital spending
  8. Producing single value output results which ignore uncertainty in assumptions and in demand forecasts
  9. Ignoring costs which may be generated by the project, eg additional overhead costs of new system/facility.

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