5.4 - Stages in analysis

5.4 - Stages in analysis

Stages

At every stage of the economic efficiency evaluation, the analysis is carried out for the transport service proposal, the do minimum and any other options.

Stage Description See
1 Complete the proposal description including a description of the do minimum, alternatives and options. volume 1, section 5.2
2 Forecast the demand. Note: The demand estimate is used for calculating fare charges, revenue, user benefits for new and existing transport service users, and road user benefits. Care should be taken to ensure assumptions are compatible with economic evaluation requirements. chapter 4
3 Determine service provider cost, service provider revenue and the funding gap. chapter 6
4 Calculate the annual net costs to government, incorporating:
  • the funding gap
  • the local and central government road capital cost savings
  • for freight services only, calculate the road maintenance cost savings and road user charges foregone.
 section 7.7
5 Calculate the annual transport service user benefits for existing (where there is a pre-existing service) and new transport services. section 7.2
6 Calculate the road user benefits on an annual basis, including disbenefits during implementation/ construction. sections 7.3 to 7.5
7 Calculate other national economic benefits and disbenefits that have monetary values. section 7.6
8 Describe, and quantify where possible, any significant non-monetised effects. section 7.6
9 List any national strategic factors relevant to the preferred option. If possible determine the monetary value(s) of any national strategic factors. section 7.6
10 Describe equity impacts (particularly those relating to transport disadvantaged) and any other significant effects not covered in stages 5 to 9. section 3.3
11 Discount the annual service provider cost, service provider revenue, funding gap, government road capital cost savings, and (for freight services only) the road maintenance cost savings and road user charges foregone over the period of analysis to obtain the present value (PV) of these costs. section 7.8
12 Discount the annual monetised benefits (stages 5 to 7) over the period of analysis and sum them to obtain the present value of net national economic benefits. section 7.8
13 Where options being evaluated are mutually exclusive, use incremental analysis to select the preferred option. volume 1, section 3
14 Determine the national benefit cost ratio (BCRN) and the government benefit cost ratio (BCRG). section 7.8
15 Perform sensitivity tests on the preferred option. chapters 4, 5 and 6