Transcript TEMPLATE 5

Project methodology &
application– for TER
By the External Consultant
D. Tsamboulas
Objective
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identify
projects
prioritization/
categorization,
support elaboration of a medium and longterm investment strategy in the region
concerned
encourage the realization of projects that
have good chances of implementation and
fall within the TER Master Plans objectives.
Phases of Methodology
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PHASE A – Identification
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PHASE B – Forecasting
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PHASE C – Evaluation
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PHASE D – Prioritisation
Identification Phase
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Identification of the projects that worth
further analysis and evaluation according
to their..
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Relevance
Readiness
Viability
…countries complete TEMPLATES 1 and 2
TEMPLATE 1 – Identified Projects
TEMPLATE 2B – Rail and related infrastructure Project Fiche
TEMPLATE 2C – Maritime/ Port Fiche
Forecasting Phase
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Any official forecasts or official estimations could
serve in verifying and finalize consultants’ forecasts.
Alternative demand scenarios are to be produced in
the framework of WP3, in a qualitative macro-scale
based on the expected economic development of the
countries concerned as well as other characteristics.
If forecasted data are not collected, then WP3 results
will be used. For any forecasted data provided,
consistency
with
the
macro-level
forecasts
(elaborated in WP3) will be investigated.
Evaluation Phase
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Selection of Criteria – 3 hyper-criteria
 CLUSTER A: Socio-economic return on investment (C )
A
 CLUSTER
B: Functionality and coherency of the
network (CB)
 CLUSTER C: Strategic/ Political concerns regarding the
network (CC):
Quantification of Criteria - Scores
Weighting/ Hierarchy of Criteria –
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Total Performance of Project
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Delphi/Paired Comparison
(=> to assist Prioritization on the next Phase)
Selection and Quantification of
Criteria -1
1. Degree of urgency
A: Immediate requirement (in the next 2
2005), B: Very urgent (between 2005 and
Urgent (between 2010 and 2015), D: May be
for some years (between 2015 and 2020),
reconsidered later (after 2020)
years-until
2010), C:
postponed
E: To be
2. Cost effectiveness
A: Excellent (IRR more than 15%), B: Very good (1315%), C: Good (10-13%), D: Acceptable (4,5-10%), E:
Low (less than 4,5%)
Selection and Quantification of
Criteria -2
3. Relative investment costs (costs/GDP)
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Rehabilitation/upgrading of railways: A: less than (min cost
of this project type/GDP)%; …(intermediate values to be
calculated assuming linearity, see next figure)… E: more
than (max cost of this project type/GDP)%
New Railway Line: A: less than (min cost of this project
type/GDP)%; …(intermediate values to be calculated
assuming linearity , see next figure)…E: more than (max
cost of this project type/GDP)%
X1: the min cost of the project
type observed in the country
(in million € or $).
X2: the max cost of the project
type observed in the country
(in million € or $)
X3: the considered project cost
(in million € or $)
Country’s GDP given in million
€ or $
ED= DC= CB= BA=1 and
A=5, B=4, C=3, D=2, E=1
Figure 1
Selection and Quantification of
Criteria -3
4. Level of transport demand
Railways: A: present traffic more than 140 trains a day; B:
present traffic from 100 to 140 trains a day; C: from 60 to
100 trains a day; D: from 25 to 60 trains a day; E: less
than 25 trains a day
5. Financing feasibility
A: Excellent, B: Very Good, C: Good, D: Medium, E: Low
Selection and Quantification of
Criteria -4
6. Relative importance of international demand of
traffic (passengers)
A: more than 30 % of total traffic; B: from 25 to 30 % of
total traffic; C: from 15 to 25 % of total traffic; D: from 7
to 15 % of total traffic; E: less than 7 % of total traffic
7. Relative importance of international demand of
traffic (goods)
The same as 6.
8. Alleviation of bottlenecks
A: Satisfactory, B: Adequate, C: Medium, D: Inadequate,
E: Unsatisfactory
Selection and Quantification of
Criteria -5
9. Interconnection of existing networks
A: Missing Link, B: Natural Barrier, C: Improve the
connection, D: No influence, E: Averse effects on rest of
network
10.Technical interoperability of network
A:
No
interoperability
problems,
B:
Minimal
interoperability problems, C: Tolerable Interoperability
problems, D: Serious interoperability problems, E:
Unsolvable interoperability problems
Selection and Quantification of
Criteria -6
11.Border effects
A: No border problems, B: Minimal border problems, C:
Tolerable border problems, D: Serious border problems, E:
Unsolvable border problems
12.Political commitment
A: Strong, B: High, C: Medium, D: Adequate, E: Low
13. Regional and international cooperation
A: Satisfactory, B: Adequate, C: Medium, D: Inadequate, E:
Unsatisfactory
Selection and Quantification of
Criteria -7
14. Historical/ heritage issues
A: No effects, B: Minimal effects, C: Tolerable/ Reversible
effects, D: Serious effects, E: Irreversible effects
15. Economic impact
A: Strong impact, B: High impact, C: Medium impact, D:
Low impact, E: No impact
Criteria Scores
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A value is 5 (the highest) in terms of score.
Respectively for value E, is 1 (the lowest).
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Therefore: C Ji  1,5
where:
J = A, B or C and
i = 1,….,5
The template for criterions scores is TEMPLATE 3.
TEMPLATE 3 Project Criteria Scores
Criterion Scores from Country
Experts
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Good communication between the externals and
the country experts is necessary.
For instance, war effects or weather that
destroyed sections of transport infrastructure. If
the external consultants for some reason will not
identify them as “missing links” in criterion CB4,
then country experts must do it, when reviewing
the criterion scores.
Weighting/ Hierarchy of
Criteria
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Country experts have received TEMPLATE 4 with
proposed default set of weights, derived by the
consultants, using Paired Comparison Matrix.
The sum of criteria weights should be 1.
Therefore: WJi  0,1 and
where:
J= A, B or C and
i = 1,….,5
C
5
W
J  A i 1
Ji
1
Paired Comparison
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Paired comparison approach is a scaling approach.
Only one question to be answered is “is this criterion more
important than the other?”.
This means that the paired comparison matrix (see Table I
next) can be filled with zeros and ones, where one
represents “is more important”.
By adding these values over the column, a measure is
obtained for the degree to which a criterion is important
compared to all other criteria, if finally these measures are
standardised (see Formula I next), a set of criteria weights
is created.
Table I An example of Paired Comparison matrix
W1
W2
…
WN
W1
W2
…
' raw' score..wi
Standardised score wi =
 ' raw' scores
WN
(I)
TEMPLATE 4 Project Criteria Weights
Criteria Weights from the
Country Experts
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As an example, if country A wishes to put high priority for
sections of the network destroyed by war or weather.
Then, the experts have to classify them as missing links,
and in the weighting they have to put high values in the
criterion CB4, as well as criterion CC2 .
Another example is when a country wishes to promote a
link that it considers important as a domestic link: in such
a case it has to put a very low weight to criteria (CB1),
(CB2), (CC1).
Furthermore, if country experts provide their own weights,
with the proper justification then they will be used instead
of default weight introduced by the external consultants.
Projects Total Score/
Performance -1
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To derive the project’s total score in each
country we use the following relationship:
T.S.Project/Country =
C
5
C
J  A i 1
where:
CJi  [1,5]
WJi  [0,1]
J = A, B or C and
i = 1,….,5
TSProject/Country  [1,5]
Ji
*WJi
Projects Total Score/
Performance -2
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For Total Score per Project, we use Country/
Spatial Weights (SW).
SWCountry = % of projects length in the country/
total project’s length.
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So the Total Score per project will be:
T.S.Project = T.S.Project/Country * SWCountry
Prioritization Phase
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The combination of the criterions scores and
priorities puts each project in one of the four
priority categories.
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If the project scores between
priority category I.
If the project scores 3 then
category II.
If the project scores 2 then
category III.
If the project scores 1 then
category IV.
4-5 then it belongs to
it belongs to priority
it belongs to priority
it belongs to priority
Priority Categories
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I: projects, which may be funded and implemented
rapidly, including on-going projects up to 2010.
II: projects requiring some additional investigations
for final definition before likely financing, or planned
for implementation up to 2015
III: projects requiring further investigations for final
definition and scheduling before possible financing,
or planned for implementation up to 2020.
IV: projects to be implemented in the long run,
including the projects where insufficient data exists.
Prioritization Results
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If a project results i.e. to be in priority category II
according to TER Methodology but according to
Van Miert prioritization belongs in another Priority
Class (i.e. A, B or C) then Van Miert’s
prioritization will be followed, at least for the EU
member states (current and the ones to be
members in 1/5/2004).
On the other hand, in the unlikely case that the
priority of a project differs with the national
priority, a more thorough analysis on the
underlying assumptions will take place.
Assumptions for Criteria
Quantification
Criterion CA1
Degree of urgency
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Where the countries indicated the time plan of the projects elaboration,
the time plan was used for the quantification of this criterion
Where time plan was not mentioned but in the goals -or the expected
benefits of the project-, the project was described as necessary for
compliance with EU directives/ policies, or for decreasing
unemployment or for other very important reason and at the same
time the total implementation period of the project was between 1-5
years, the score given was 5=A
Where time plan was not mentioned but in the goals -or the expected
benefits of the project-, the project was described as necessary for
compliance with EU directives/ policies, or for decreasing
unemployment or for other very important reason and at the same
time the total implementation period of the project was between 5-10
years, the score given was 4=B
For any other case (of implementation years), the score given was 3=C
If there weren’t any available data to support the quantification of this
criterion, then the score given was the lowest 1=E unless there was a
good justification and then the score given was 2=D, assuming that the
project merits some consideration.
Criterion CA2
Cost effectiveness
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If the IRR was available then the quantification was done
as described earlier.
If no IRR was available –without any justification- the
score given was the lowest 1=E
If the IRR was not available with a strong justification like
i.e. the feasibility study is not completed yet but it is ongoing the score given was the 3= C, assuming that the
project merits consideration.
For any other case of missing IRR, the score given was
2=D.
Criterion CA3
Relative investment cost
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Where the min and max values of a country for each
project type were not available (and they weren’t available
in all countries that so far have sent data) the following
assumption was made: the min and the max values
from the group of projects presented were used.
Criterion CA4
Level of transport demand
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If traffic data were available then the quantification was
done as described earlier.
If no traffic data were available –without any justificationthe score given was the lowest 1=E
If traffic data were not available with a strong justification
like i.e. the traffic study is not completed yet the score
given was the 3= C, assuming that traffic is such to justify
the project consideration.
For any other case of no traffic data the score given was
2=D.
Criterion CA5
Financing feasibility
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Where the expected IRR was very high, the private sector
financial participation was also very high and if the financial
study was completed and accepted, the score would be 5=A.
Where the expected IRR was medium towards high, the private
sector financial participation was also medium towards high and
if the financial study was completed and accepted, the score
would be 4=B.
Where the expected IRR was medium, the private sector
financial participation was also medium and if the financial study
was completed and accepted, the score would be 3=C.
In any other case the score was 2=D, except where no IRR or
no feasibility study was available or IRR was really low and
there were no private funds as well, then the score given was
1=E.
Criteria CB1 & CB2
Relative importance of international
demand of traffic (passengers & freight)
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If traffic data were available then the quantification was
done as described earlier.
If no traffic data were available –without any justificationthe score given was the lowest 1=E
If traffic data were not available with a strong justification
like i.e. the traffic study is not completed yet the score
given was the 3= C, assuming that international traffic is
such to justify the project consideration.
For any other case of no traffic data the score given was
2=D.
Criterion CB3
Alleviation of bottlenecks
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If traffic data “before” and “after” (through forecasting), were
available then their comparison indicated whether alleviation of
bottlenecks took place. Based on these results the scores are
produced.
If no traffic data were available –without any justification- the
score given was the lowest 1=E
If no traffic data were available “before” and “after”, with a
strong justification like i.e. the traffic study is not completed yet
the score given was the medium one 3=C, assuming that the
difference in traffic “before” and “after” the project
implementation is such to justify the project consideration.
For any other case of missing traffic data the score given was
2=D.
Criterion CB4
Interconnection of existing
networks
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If in the projects description was mentioned that this
project (road or rail) will alleviate a missing link the score
given obviously is 5=A.
If in the projects description was mentioned that this
project (road or rail) will improve the condition of the
current situation the score given obviously is 3=C.
If nothing of the above was mentioned the quantification
was done based on unique characteristics of each project.
However for all considered projects the score given
was 3=C and in some cases 5=A.
Criterion CB5
Technical interoperability of
network
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If a project was cross-border and based on the
descriptions of the participating countries interoperability
problems exist, then 3=C or lower.
4=B is used only in not so severe interoperability cases,
where data exists and it can be verified.
However all projects considered were inside
country’s borders so the score given to all was
5=A.
Criterion CC1
Border effects
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If a project was cross-border and based on the
descriptions of the participating countries border problems
exist was 3=C or lower.
4=B is used only in cases when border problems exist, but
are not so critical.
However, all the projects considered were inside
country’s borders so the score given to all was
5=A.
Criteria CC2, CC3, CC4,
strategically sensitive criteria
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For the three strategically sensitive criteria
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Political commitment (CC2)
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Regional and international cooperation (CC3)
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Historical/ heritage/ environmental issues (CC4)
the score given to all projects was 5=A, since the
consultant believes it is rather impossible for any country
-and concerning any type of project- not to be politically
committed to it and also not to try for the best regional
cooperation as well as to ignore environmental/ heritage
issues.
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In cases that a country expert assigns a different value
then the default value will be changed.
Criterion CC5
Economic impact
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Where a) the expected IRR was high, b) the travel time was
reduced, c) safety was increased, d) access to ports or other
terminals was easier and e) socio-economic parameters
(economic development, unemployment) of the region were
expected to benefit from the project, the score given was 5=A.
Where a) the expected IRR was medium towards high, b) the
travel time was reduced, c) safety was increased and d) socioeconomic parameters (economic development, unemployment)
of the region were expected to benefit from the project, the
score given was 4=B.
Where a) the expected IRR was medium and b) the travel time
was reduced score given was 3=C.
For any other case the score given was 2=D, except where no
data were available and then the score given was 1=E.
Example of Evaluation
Methodology for TER – using
assumptions
Lithuanian Project:
Modernization of Telecommunications
on the Rail Corridor IXB
Example steps
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Complete Project Fiche – see next
Derive Criteria Scores
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Use default set of Criteria Weights
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Derive Project Total Score
Prioritize Project
TEMPLATE 2B – Rail and related infrastructure Project Fiche
Criteria Scores-1
1. Degree of urgency
Based on the data of TEMPLATE 2B the project is already under
construction and the total construction time 2 years, therefore
project’s implementation is characterized as A: immediate
requirement.
CA1=5
2. Cost effectiveness
Based on TEMPLATE 2B, there is no IRR mentioned so the
project’s cost effectiveness is characterized as E: Low (IRR
higher than 4,5%).
CA2=1
Criteria Scores-2
3. Relative investment costs (costs/GDP)
Based on the data of TEMPLATE 2B, country’s GDP and Figure 1
the project’s relative investment cost is characterized as A.
CA3=5 (or taken directly from Figure 1 -see example
next)
4. Level of Transport Demand
Based on the data of TEMPLATE 2B, in two out of three section
the level of transport demand is more that 60 and less than 100
trains a day (64 and 93 trains), therefore the project’s level of
transport demand is characterized as C: from 60 to 100
trains a day.
CA4=3
X1: 3,1 million €
X2: 500 million €
X3 :
7 million €
GDP =12.039 millions €
Therefore:
(X1/GDP)% = 0,026 %
(X2/GDP)% = 4,153%
(X3/GDP)% = 0,058 %
Criteria Scores-3
5. Financing Feasibility
Since in TEMPLATE 2B no IRR is available and there are no
private funds as well, then project’s financing feasibility is
characterized as E: Low.
CA5=4
6. Relative importance of international demand of traffic
(passengers)
Based on TEMPLATE 2B, there are no international traffic data–
without any justification-, therefore the project’s relative
importance of international demand of traffic is characterized as
E: less than 7 % of total traffic
CB1=1
Criteria Scores-4
7. Relative importance of international demand of traffic
(goods)
Based on TEMPLATE 2B, there are no international traffic data–
without any justification-, therefore the project’s relative
importance of international demand of traffic is characterized as
E: less than 7 % of total traffic
CB2= 1
8. Alleviation of Bottlenecks
Comparing total traffic data “before” and “after” and based on
expert’s opinion the project’s alleviation of bottlenecks is
characterized as A: Satisfactory.
CB3=5
Criteria Scores-5
9. Interconnection of existing networks
Since it is a modernization of a line, the project will just
improves connection so based on expert’s opinion the project’s
interconnection of existing networks (in this case existing lines)
is characterized as C: Improve the connection.
CB4= 3
10. Technical interoperability of network
Since it is an inside-border project, based on expert’s opinion
the project’s technical interoperability in the network is
characterized as A: No interoperability problems.
CB5=5
Criteria Scores-6
11. Border effects
The project is inside borders, therefore regarding the border
effects is characterized as A: No border problems.
CC1= 5
12. Political Commitment
The political commitment is characterized as A: Strong.
CC2=5 (Consultant Default Value)
13. Regional and International Cooperation
The regional cooperation (since there is no international
cooperation) is characterized as A: Satisfactory.
CC3=5 (Consultant Default Value)
Criteria Scores-7
14. Historical/ heritage Issues
There are no effects on historical heritage, therefore the project
scores A: No effects.
CC4= 5 (Consultant Default Value)
15. Economic Impact
No data were available (no IRR, no travel time data, no cost
data after the project etc.), so score it is expected to be E: No
impact.
CC2=1
See TEMPLATE 3 completed next..
TEMPLATE 3 Criteria Scores
TEMPLATE 4 Criteria Weights
Project’s Total Score
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In our case is only one country so spatial weighting
was unnecessary
Based on methodology described earlier the
calculation of Total Score is presented in TEMPLATE
5. (It is the weighted sum of criteria scores or else
TEMPLATE 5 is the result of multiplying TEMPLATES 3
and 4)
TEMPLATE 5 Project Total Score
Prioritization of Project
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The Project Total Score is:
T.S. =3,36
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Therefore the project belongs in Priority
category:
II:projects requiring some additional
investigations for final definition
before likely financing, or planned for
implementation up to 2015.
First evaluation for submitted
TER projects
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See Matrix next results
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for the countries that sent data, namely: Bosnia &
Herzegovina, Bulgaria, Georgia, Hungary,Lithuania,
Moldova, Romania, Slovakia,Slovenia and Turkey
Countries from which data are pending
 Austria, Greece, Italy, Czech Rep., Poland, Belarus,
Croatia, Serbia & Montenegro, F.Y.R.O.M, Russia
Federation, Ukraine
HUNGARY
HUNGARY
LITHUANIA
LITHUANIA
Notes on the Matrix
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In total the TER projects are: 79 with
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13% (else 11 projects) belong in Priority Category I
1% (else 1 project) belong in Priority Category I - II
63% (else 49 projects) belong in Priority Category II
23% (else 18 projects) belong in Priority Category III
None belong in Priority Category IV