KEY ASSUMPTIONS UNDERPINNING THE DEMAND FORECASTING AND ECONOMIC MODELLING | |
Criteria | Assumptions / inputs |
1. Demand Modelling, assumptions and results | Outline the key drivers of demand, and describe the situation 'without' the initiative, i.e. the base case, including future works and associated capital, maintenance and operating costs |
2. Land use, population and employment forecasts | Describe and / or list the policy statements and plans which support the land use forecasts and existing commitments regarding any necessary re-zoning; and who undertook the land use forecasts? What is the ABS historical 5 year and 20 year employment and residential growth rate for the area in question? List the low, medium and high population and employment projections over the period for which forecasts are generated and which was used in the economic appraisal? What are the annual employment and residential growth rates implied by these land use forecasts? If relevant, have specific land use forecasts been undertaken for this initiative? If so, what is the difference in terms of number of jobs and residents compared to the base case land use in the last year the forecasts are produced for? Has there been any redistribution of jobs and residents and if so, what are the assumptions underpinning this redistribution? |
3. Demand modelling outputs | What demand model was used to generate the forecasts and who undertook the demand modelling? What time period was modelled (for example a one hour AM peak on an average weekday, 24 hour period on an average weekday, etc.) What expansion factor was used to translate the period of the day modelled into a daily observation? (Note - this is not applicable if a 24 hour period was modelled). What sources informed this expansion factor? What expansion factor was used to translate the daily observation into an annual observation? What sources informed this expansion factor and / or what logic underpins it? Does the model calculate new or "generated" trips (as opposed to using a fixed trip matrix)? How does the demand model deal with the issues of induced demand? |
4. Economic model parameters - costs | First year of construction / Last year of construction. State real discount rates used (if not 4, 7 and 10%), and the basis for any variation from these standard DRs. State appraisal period in years, and basis for its selection. Remaining life of the initiative at the end of the appraisal period Describe the basis for estimating all capital costs (for both base and project cases). Confidence level: are the construction costs P50, P90, P95? What is the basis for this estimate? What is the magnitude of contingency included in capital cost estimates (as a % of total costs)? What rate of escalation has been assumed over the construction period? What is the profile of the capital cost spend, for example: year 1 - 10%, yearn - X%. Who were the capital cost estimates prepared by? Have they been independently verified? Describe the initiative's outturned costs ($M, nominal, undiscounted) |
Economic costs: Describe and justify any adjustments made to the initiative's outturned costs to generate an economic project cost. Economic cost - $M, real, undiscounted; and $M, real, discounted (using a real 7.0% discount rate) Residual value - State the size of the residual value, economic lives of the assets included in the residual value and the methodology used to generate it (see note above for methodology). Maintenance costs - Describe the basis for estimating all maintenance costs, including growth rates over time (for both base and project cases). Are the maintenance costs P50, P90, P95? What is the basis for this estimate and who were the maintenance cost estimates prepared by? Replacement - Is there a need to replace or refurbish major components of the infrastructure / rolling stock during the appraisal period? If so, how are these replacement or refurbishment costs captured? Operating costs - Describe the basis for estimating all operating costs, including growth rates over time (for both base and project cases). Who were the operating cost estimates prepared by? Have they been independently verified? | |
5. Economic model parameters - benefits | Benefits ramp up - Describe how benefits ramp up over the construction period, ie year 1 - 35%,yearn - X%. What source and/or assumptions inform this ramp up? Benefit components - Describe the basis for estimating each benefit component, including growth rates over time. Cost and benefit time streams - Attach an appendix showing the time stream for each benefit and cost component ($M, real, undiscounted). Generalised trip cost - has generalised trip cost (GTC) been calculated on an origin - destination (OD) basis within the demand model, or using aggregate outputs from the demand model? |
Value of travel time: Commuter travel - What is the value of travel time used for this initiative? Does this value differ between modes? Is this value based on resource cost or willingness to pay? Business travel - Has a specific value been applied to business travel? If so, what was this value? Growth - Has any rate of escalation been applied to these values? Source - What are the sources for the values used and any assumptions incorporated into the value of travel time? | |
Weightings - Describe the weightings which have been used to calculate the generalised trip cost Wait / Access / Egress - What weighting has been applied to egress time? What is the source for this? Transfer - What transfer penalty has been applied? What is the source of this? Boarding penalty - Has a boarding penalty been applied during the demand modelling and / or economic appraisal? If so, what is the magnitude of this boarding penalty (minutes) and how does it differ between modes? | |
Benefit parameters - List the value and source of all benefit parameters relevant to the appraisal. For example decongestion; Vehicle Operating Costs (for all classes of vehicles); Crash costs etc Related initiatives - Are the benefits and costs closely related to, dependent upon or potentially influenced by another initiative(s)? If so, explain how that has been accounted for in the BCR. | |