DEVELOPING COST-BENEFIT ANALYSIS TO MEET THE ITS REQUIREMENTS: NEW METHODS FOR EVALUATION PRACTICES

This paper discusses two emerging issues in transport project appraisal, with respect to the increasing use of ITS solutions. First, the role of discount rate in the appraisal should be noted, many of the current projects have maintenance times shorter than the standards practice in conventional transport projects. Therefore, these projects are less vulnerable to changes in the investment climate, interest rates, etc. This will have implications on the risk associated with the project. Another area where changes have taken place is the implementation of new innovations, such as the weather-controlled variables speed signs, two cases of which are used as examples in this paper. Using data from two Finnish experiences, it will be shown that accumulating benefits from pilot projects can considerably improve the benefit/cost ratio of these investment decisions. The main reason for this is that the experiences gained in the design of the pilot project will positively reduce similar expenses in following projects utilizing the same technology solutions. Overall, the proposed developments to CBA framework would improve the adequacy of the framework to better capture the specific features of the ITS investments in transport sector.