Mega Transport Projects: The challenge of embedding sustainability in financing Mega Urban Transport Projects

All authors:
Pretorius, F., Ng Mee Kam
Host organisation: CoE London, UK
Publication year: 2008
Published in:
Working Paper 2.5 from Working Paper Series 2: Sustainable Development Challenges for Mega Urban Transport Projects.
Research theme: Policy and Planning
Keywords:
maga transport projects, finance, cost-benefit analysis, CBA, discount rates
Type:
Paper
Summary:
This paper is concerned with one of the mix of resource inputs into MUTPs, namely finance. We are concerned with embedding sustainability considerations into the appraisal of Mega Urban Transport Projects (MUTPs), but more so with particular aspects of MUTP appraisal that draw on finance theory for their underlying logic, namely the choice of project discount rates. More generally, appraisal errors in cost benefit analyses (CBA) are frequently blamed for sunk capital in underperforming projects, but often cost-benefit analysis methodology is also blamed for poor decisions. It is well-known that CBA is incapable of incorporating effectively positive or negative environmental and social externalities that are not fully commodified, or is incapable of allowing assessment of secondary or tertiary positive or negative impacts, or is considered incapable of allowing effective consideration of unintended impacts and systems dynamics. However, beyond criticisms of CBA methodology, we are concerned with the intuition surrounding the incorporation of finance considerations through choice of project discount rates in CBAs, and how this may influence project appraisals. In particular, we are concerned with problems that arise in project appraisals created by the cost of finance, rather than the raising of finance.
October 2018
Upcoming Events
Mo Tu We Th Fr Sa Su
v40  1 2 3 4 5 6 7
v41  8 9 10 11 12 13 14
v42  15 16 17 18 19 20 21
v43  22 23 24 25 26 27 28
v44  29 30 31        

The VREF invites PhD students and early stage researchers to apply for a Study Visit Grant to be supported with up to SEK 30 000.

The invitation is open until 181031.

Blog! Blog! Blog!

Global Mobility Research

This Meeting of the Minds' blog monthly releases interviews of global transportation researchers from the VREF's Future Urban Transport Program Network.

TheCityFix

This CityFix series, produced by the WRI (World Ressources Institute) Ross Center for Sustainable Cities and supported by the VREF, discusses walking and cycling in cities with a special focus on low- and middle-income countries.

Each year the Håkan Frisinger Foundation for Transportation Research awards a scholarship to a prominent researcher.

Read more...

About VREF

The Volvo Research and Educational Foundations (VREF) inspires, initiates and supports research and educational activities through the Future Urban Transport Programme - How to deal with the complexity of urban transport (FUT). 

Our Vision: Sustainable transport for equitable access in urban areas

Read more

© Copyright VREF
2018