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

Abstract

Infrastructure investments have an important role in a country's development, but the scarcity of resources in the current economic situation (world crisis) emphasizes the need for decision support tools. Several research projects have previously been carried out in order to improve the currently-used Cost-Benefit Analysis (CBA) methodology. CBA is a widely accepted and used decision support tool, even if it has its own shortcomings and drawbacks. The objective of this work is to assess the current limitations of CBA methodologies applied in Europe using cases in Hungary. It also collects and summarizes the main research and findings in the field of ex-post evaluation. Two Hungarian railway upgrade projects were evaluated economically. The change of CBA methodology had a more significant impact for the economic indicators, than the changes of the input parameters. In addition to the economic analysis, the financial losses were evaluated, since these projects caused significant disturbances for the operations during the construction period. There is a need for more ex-post evaluations carried out in railway upgrade projects in order to better understand their impacts.