Appraisals of significant infrastructure should typically be conducted using a thirty (30) year timeframe. This timeframe is measured from the first year in which the benefits of the initiative accrue.
In cases where a different appraisal period is used (such as a telecommunications initiative with a shorter asset life), the Summary of Appraisal Key Results and Assumptions should specify the basis for doing so, and stakeholders should contact Infrastructure Australia for specific advice in each case.
For infrastructure assets with a life of more than 30 years, a residual value should be included, where appropriate. There are two potential methodological approaches: first, for the residual value to be calculated using an approach which estimates the Net Present Value of the future benefit stream provided by the asset (to the end of the asset life); second, more traditional approaches based around straight line depreciation of asset values. Infrastructure Australia is receptive to both approaches.
Appraisal Summary Table 1 should list the residual value and the assumptions which underpin it.