Cost–benefit Analysis, Planning and Innovation
- Transport Economics, Management and Policy series
Edited by Hugo Priemus, Bent Flyvbjerg and Bert van Wee
Chapter 3: Ex-ante Evaluation of Mega-Projects: Methodological Issues and Cost–Benefit Analysis
3. Ex-ante evaluation of mega-projects: methodological issues and cost–beneﬁt analysis1 Bert van Wee and Lóránt A. Tavasszy 3.1 INTRODUCTION Mega-projects play a major role in most Western and non-Western countries, in several respects. First, they are heavily under debate at the political level, the assumed economic impacts and important budget implications being the major issues. Such projects often cost several billions of euros or dollars. Second, there is an important scientiﬁc debate about these projects, mainly because of the huge cost escalations (Flyvbjerg et al., 2003; Odeck, 2004) but also because of the uncertainty of the wider economic eﬀects (in addition to direct user beneﬁts). Because of the important role of megaprojects a sound ex-ante evaluation of a possible new project is crucial for the quality of decision-making. In most Western countries cost–beneﬁt Analysis (CBA) is the method used for ex-ante evaluations of transport infrastructure projects (Hayashi and Morisugi, 2000). In literature the discussion on the CBA of infrastructure projects focuses on methodological issues, as well as on more principal items. In recent years the attention paid to non-methodological issues has gained more attention, including issues related to the position of CBA in decision-making, the complex multi-actor context of mega-projects and governance issues. The purpose of this chapter is to discuss the current state of the art with respect to CBA as well as to discuss possible improvements with respect to costs, beneﬁts and modelling. However, we do not discuss...
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