Infrastructure Appraisal and the Changing Role of Government



Infrastructure Appraisal and the Changing Role of Government

Authors

P M Wortelboer-van Donselaar, M G Lijesen, KiM Netherlands Institute Transport Policy Analysis, NL

Description

The expanding role of the private sector road infrastructure management, calls for a new focus on infrastructure appraisal. Apart from the project impact on overall welfare, the optimal public role(s) also needs to be assessed.

Abstract

The expanding role of the private sector in constructing and financing road infrastructure, calls for a new focus on infrastructure appraisal. Apart from having to assess the impact of the project on overall welfare, we will also have to assess the divide between public and private roles in the project.
After all, if we abandon the idea that new road infrastructure is provided by the government, it should be made clear what the government should do /should continue to do and how public interests can be taken into consideration.

This paper describes the appropriate appraisal methods and the criteria by which to choose between them. These criteria are based on an analysis of studies about public interests and government tasks and the analysis of six appraisal methods, used by the Dutch Ministry of Transport, Public Works and Water Management.

The main conclusions of the study are that a quantitative project evaluation tool can be necessary in order to clarify public interests even when not dealing with a situation involving collective goods receiving government financing. The tools can be helpful in revealing the public interest in major ? fully or partly ? privately financed projects likely to be susceptible to substantial external effects or market distortions.

The preferred form for assessing social efficiency is a social cost-benefit analysis (SCBA). When combining the information on the balance of costs an benefits from a financial cost benefit analysis (the so-called business case, from the point of view of the private investor) with the balance of a social cost benefit analysis (SCBA), conclusions from welfare economic theorie point of view can be drawn about the optimal public role.

Publisher

Association for European Transport