Ex Post Evaluation for Cohesion Fund (including former ISPA) 2000-2006

Work Package B: Cost benefit analysis of selected transport projects

This study contains an ex post evaluation of a selection of ten transport projects in EU countries benefitting from EU Cohesion and ISPA funding during the period 2000-2006. The method used was ex post cost benefit analysis. The study is one of three studies commissioned by DG REGIO to assess the effects of the Cohesion Fund and ISPA on economic and social cohesion and draw lessons for the future. These studies are package A (overall); package B (transport); and package C (environment).

Main findings

Project impacts :
All projects delivered value for money.
The Cohesion Fund contribution was needed to unlock the economic benefits of these projects.
Benefits from these projects come from 8 categories (travel time savings, vehicle operating costs, safety improvements, carbon emission, air and noise reduction ad other).
Generally, the utilisation rates found are compatible with the objective to build in sufficient spare capacity to give room for growth over a project's lifetime.
It was difficult to establish a direct causal link between the transport infrastructure investments and the wider socio-economic impacts (especially relevant for GDP).

Cost-benefit analysis (CBA) as a method:
The CBA framework used for the appraisal of these projects is both consistent with DG REGIO's guidelines and with good practice.
However, the scope of the ex ante analysis has often been narrower than what would be ideal.
Different EU Member States use different appraisal parameters. This in itself is not an issue, but there appears to be little similarity in some instances between the values used and other sources for these values, such as HEATCO
The study identified weaknesses in the demand modelling, the definitions of the counterfactuals and the modelling of network effects.

Effectiveness of CBA in decision-making (supporting the project generation and project decision of the Member States and the Commission). Whilst cost-benefit analysis is regularly used worldwide, it forms only part of a broader decision-making process – even in countries with a long history of using it. For many of the reviewed projects, the study found that CBA had been used mainly to confirm that the project offered value for money and to support the application to access EU funding.

Utility of ex post CBA (from the point of view of the project promoters, Member States and the Commission). Ex post CBA can add value to the planning process. It adds transparency, strengthens the evidence base and provides feedback on the methods and techniques used to design and appraise the infrastructure. For these reasons, active ex post CBA programmes have been in place for some time in the UK and in France, for example.

Ex post CBA as a tool for evaluating project impacts. Ex post CBA's main strengths are its holistic approach, that is, its ability to consider a project as a whole, as well as its ability to deliver an unambiguous indicator of a project's economic worth. A further strength of ex post transport CBA is that it focuses on the direct impacts of the transport project and their associated externalities.






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