The Effect of Link Reliability on Benefit/Cost Ratios
This report develops project evaluation procedures to incorporate risk assessment of road link reliabilities. The current Transfund evaluation procedures and recent work in this area are reviewed and suggested directions discussed. Simple link reliability theory is then developed, as well as typical examples of how this theory could be applied. The application of this theory within a project evaluation context is also considered.
The study found that Transfund’s Project Evaluation Manual (PEM) does not currently provide many analysis tools relating to risk and reliability. Although qualitative assessment of the hazards facing the existing road network is often done at a strategic level, quantitative evaluation of projects designed to improve the reliability of the existing road network could be provided in the PEM. Link reliability should be considered when the project is located on or affects the reliability of a strategic link, if there are two or fewer alternative routes and the project costs or benefits exceed a specified minimal level.
Draft procedures for incorporating the effects of link reliability into project evaluation are provided and it is suggested that they be trialled on relevant current or future projects. Areas requiring further research are identified and some methods for establishing failure rates of various hazards are also provided for guidance.
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