Measuring Impacts and Risks to the Public of a Privately Operated Toll Road Project by Considering Perspectives in Cost-Benefit Analysis

Sae Chi, Jonathan Bunker, Melissa Teo

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

© 2017 American Society of Civil Engineers. Decision making about transport infrastructure investment is based on the net impacts and risks to the community. The private sector is often involved in toll road projects, including various schemes to design, build, operate and/or finance the project, either in a partnership with a host government, independently, or in some combination. The cost-benefit analysis of a privately operated toll road requires careful allocation of the project impacts, in order to accurately reflect the net impacts and risks to the community from the host government's perspective. This study investigated whether alternative assumptions from differing perspectives are valid when toll roads are delivered and operated privately rather than by a host government. The treatments of tolls and other toll road project-related payments were considered from different perspectives. Cost-benefit analysis was conducted for a synthesized toll tunnel project case, by considering alternative treatments of some impacts. That led to the exploration of the analysis outcomes of the treatment of tolls from two perspectives: the toll as a transfer payment and the toll as an end-user cost . Various scenarios were explored, including public versus private operations. The Monte Carlo simulation approach was used to account for the risks of variables in the analysis. The synthesized case study revealed that, for privately operated toll roads, treating toll charges as a transfer payment, and alternatively as an end-user cost, can both be valid approaches but from two perspectives. The analysis outcomes under different perspectives are particularly helpful for making decisions on the basis of the impacts and risks solely from the perspective of the host government. The proposed methodology can be used to examine scenarios other than the ones examined in this study, and it can be very useful in the project evaluations of privately operated toll road projects.
Original languageEnglish
Pages (from-to)04017060
JournalJournal of Transportation Engineering, Part A: Systems
Volume143
Issue number12
DOIs
Publication statusPublished - Dec 2017
Externally publishedYes

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