CBA workshop and discussion:
Bus Priority and Active Travel Proposal
Transport Investment Appraisal
Short Course
The Excel spreadsheet ‘Project 2020.xlsx’ contains most of the essential data for an appraisal of an investment project, with construction starting in 2020 and the project opening at the start of 2022. Assume that the project is located in a UK city outside London.
The project includes: extensive priority measures for inbound buses, cyclists and pedestrians; and provision of high quality pavements and inbound cycle lanes in a congested urban corridor
The base year for discounting is 2010, the base year for prices in the appraisal is to be 2010, and the unit of account is market prices, consistent with TAG advice (TAG Unit A1.1).
- Based on the information provided in the TAG Data Book, determine suitable appraisal values for travel time savings in each year of the appraisal period, and calculate the user benefits for 2022 in terms of travel time savings, for bus users, cyclists, pedestrians and car users. Assume that all travel in this case is for commuting purposes. Complete the yellow shaded sections of the Excel spreadsheet accordingly (in Sheets 1 & 2).
- In Sheet 3 of the spreadsheet, derive the project’s NPV and BCR (and if you have time IRR). Discount according to the TAG guidance (TAG Unit A1.1) which is based on HM Treasury Green Book guidance (see Annex 6, HM Treasury, 2018). Make sure you are clear what definition of the BCR you have used.
- Does the project represent Poor, Low, Medium, High or Very High value for money according to the DfT’s value for money criteria, and what are the implications for its chances of being accepted and funded?
- What sensitivity tests could / should be conducted?
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