Technical Note 22
Strategic Appraisal Model Assumptions and Approach
The STMP appraisal model evaluates the different demand management options for the
preferred scenario selected for the Abu Dhabi STMP.
1
Assumptions
1.1
General
I All monetary inputs and values are in UAE Dirhams (AED) at 2008 prices.
I The appraisal period is 45 years (2010-2054), the construction period is
assumed to be 15 years (2010-2024) followed by 30 years of full operation.
During construction benefits grow in line with the investment (eg 50% of
benefits when 50% of investment). This will be reviewed when consistent
2015 Reference Case and Preferred Scenario model runs are available as these
will allow a more realistic interpolation.
I A discount rate used is 3.5 % for the full appraisal period.
I At this stage, model outputs are only used for the forecast year 2030. No
growth in revenue or benefits is assumed after full implementation.
I The following 2008 values of time have been assumed (these are consistent
with those used in the STMP Enhanced Model):
I
Work: 35 Dirhams
I Other: 35 Dirhams
I 3 % real growth per year is assumed for the values of time.
I Fuel vehicle operating costs assumed: 0.25 AED/km.
I Non-fuel vehicle operating costs assumed: 0.10 AED/km.
I No real growth in the value of VOCs is assumed.
I A residual value of 25% of initial capital works costs is included in the last
year of the appraisal period (2054) in respect of the expected remaining value
of long lived civil works (tunnels, bridges, road and rail civil works).
1.2
Annualisation
I The annualisation factors can be changed for each of the different modes or
types of benefits:
I Car, private transport, bus, metro, tram, rail, ferry, coach, taxi.
I Cordon charge, parking charge, time saving benefits.
I The assumed annualisation factors are presented in Table 1.
TABLE 1
1.3
ACTUAL ANNUALISATION FACTORS
AM hour to AM period
3
PM hour to PM period
3
Evening hour to evening period
5
Daily to annual multiplier
250
AM annualisation
750
PM annualisation
750
EV annualisation
1250
User charges and public transport fares
I User charge and public transport revenues are not included in the appraisal
model as presently configured (they are transfer payments between providers
and users of the transport system).
I User charge revenues by type (cordon and parking) and public transport fare
revenues by mode are estimated for a full year of operation for comparison
with highway and public transport annual operating and maintenance costs.
I User charges and PT fares vary between the various scenarios.
2
Appraisal Model Inputs
2.1
Costs
I Costs are in AED millions.
I The user can input different capital and operating and maintenance costs for
each of the 4 demand management options (none, low, medium and high).
The model calculates the cost for the selected options compared against the
cost of the reference case.
2.2
Benefits
I The model produces the following outputs for each of the 4 demand
management options and the Reference Case:
I Time savings
I Reduction in veh-km
I Public transport revenue by mode
I Cordon charge revenue
I Parking management revenue
I The model will calculate the benefits for the selected option compared against
the Reference Case.
3
Calculations
I The model uses the annualisation factors to calculate full year values for all
the costs and benefits.
I The profiling of costs and benefits is currently based on a cumulative factor
(1/15, 2/15, …, 14/15, 15/15,) for each year of the construction period. An
estimated cost profile will be incorporated once the capital costs by year have
been determined; although this will not, at this stage, be able to take into
account the effect on cash flow of potential PPP schemes. Subsequently the
full annual operating costs and benefits for each year are included (20242054).
I The undiscounted profile for 2010-2054 of all the costs and benefits of the
scheme is converted to a discounted profile using the selected discounting
rate (3.5 %)
4
Results
I The model calculates the present values of all the costs and benefits of the
selected option.
I The Net Present Value (NPV) and Benefit Cost Ratio (BCR) are calculated for
the selected option. These are presented alongside the VOC savings in the
results table
.