Project

1
Projects methodology application for TEM

• D. Tsamboulas
• External Consultant

2
Objective

• identify projects prioritization/
  categorization,
• support elaboration of a medium and long-term
  investment strategy in the region concerned
• encourage the realization of projects that have
  good chances of implementation and fall within
  the TEM Master Plans objectives.

3
Phases of Methodology

• PHASE A Identification
• PHASE B Forecasting
• PHASE C Evaluation
• PHASE D Prioritisation

4
Identification Phase

• Identification of the projects that worth further
  analysis and evaluation according to their..
• Relevance
• Readiness
• Viability
• countries complete TEMPLATES 1 and 2

5
TEMPLATE 1 Identified Projects
6
TEMPLATE 2A Road and related infrastructure
Project Fiche
7
(No Transcript)
8
(No Transcript)
9
(No Transcript)
10
TEMPLATE 2C Maritime/port Fiche
11
(No Transcript)
12
(No Transcript)
13
Forecasting Phase

• 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.

14
Evaluation Phase

• Selection of Criteria 3 hyper-criteria
• CLUSTER A Socio-economic return on investment
  (CA)
• 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 Delphi/Paired
  Comparison
• Total Performance of Project
• (gt to assist Prioritization on the next Phase)

15
Selection and Quantification of Criteria -1

• 1. Degree of urgency
• A Immediate requirement (in the next 2
  years-until 2005), B Very urgent (between 2005
  and 2010), C Urgent (between 2010 and 2015), D
  May be postponed for some years (between 2015 and
  2020), E To be reconsidered later (after 2020)
• 2. Cost effectiveness
• A Excellent (IRR more than 15), B Very
  good (13-15), C Good (10-13), D Acceptable
  (4,5-10), E Low (less than 4,5)

16
Selection and Quantification of Criteria -2

• 3. Relative investment costs (costs/GDP)
• Rehabilitation/upgrading of highways 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 two-lane highway or single carriageway 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)
• Complete four-lane motorway 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)

17
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 ) Countrys GDP given in
million or
ED DC CB BA1 and A5, B4, C3, D2, E1
Figure 1
18
Selection and Quantification of Criteria -3

• 4. Level of transport demand
• Highways A present traffic more than 14000
  vpd B present traffic from 10000 to 14000 vpd
  C from 6000 to 10000 vpd D from 3000 to 6000
  vpd E less than 3000vpd
• Border crossings A present traffic more
  than 3500 vpd B present traffic from 2500 to
  3500 vpd C from 1500 to 2500 D from 800 to
  1500 E less than 800 vpd
• 5. Financing feasibility
• A Excellent, B Very Good, C Good, D
  Medium, E Low

19
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

20
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
•  

21
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
•  

22
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
•  

23
Criteria Scores

• A value is 5 (the highest) in terms of score.
  Respectively for value E, is 1 (the lowest).
• Therefore
• where
• J A, B or C and
• i 1,.,5
• The template for criterions scores is TEMPLATE 3.

24
TEMPLATE 3 Project Criteria Scores
25
Criterion Scores from Country Experts

• 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.

26
Weighting/ Hierarchy of Criteria

• 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 and
• where
• J A, B or C and
• i 1,.,5

27
Paired Comparison

• 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.

28
Table I An example of Paired Comparison matrix
Standardised score wi (I)
29
TEMPLATE 4 Project Criteria Weights
30
Criteria Weights from the Country Experts

• 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.

31
Projects Total Score/ Performance -1

• To derive the projects total score in each
  country we use the following relationship
• T.S.Project/Country
• where
• CJi ? 1,5
• WJi ? 0,1
• J A, B or C and
• i 1,.,5
• TSProject/Country ? 1,5

32
Projects Total Score/ Performance -2

• For Total Score per Project, we use Country/
  Spatial Weights (SW).
• SWCountry of projects length in the
  country/ total projects length.
• So the Total Score per project will be
• T.S.Project T.S.Project/Country SWCountry

33
Prioritization Phase

• The combination of the criterions scores and
  priorities puts each project in one of the four
  priority categories.
• If the project scores between 4-5 then it belongs
  to priority category I.
• If the project scores 3 then it belongs to
  priority category II.
• If the project scores 2 then it belongs to
  priority category III.
• If the project scores 1 then it belongs to
  priority category IV.

34
Priority Categories

• 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.

35
Prioritization Results

• If a project results i.e. to be in priority
  category II according to TEM Methodology but
  according to Van Miert prioritization belongs in
  another Priority Class (i.e. A, B or C) then Van
  Mierts 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.

36
Assumptions for Criteria Quantification
37
Criterion CA1 Degree of urgency

• 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 5A 
• 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 4B
• For any other case (of implementation years), the
  score given was 3C
• If there werent any available data to support
  the quantification of this criterion, then the
  score given was the lowest 1E unless there was a
  good justification and then the score given was
  2D, assuming that the project merits some
  consideration.

38
Criterion CA2 Cost effectiveness

• 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 1E
• If the IRR was not available with a strong
  justification like i.e. the feasibility study is
  not completed yet but it is on-going the score
  given was the 3 C, assuming that the project
  merits consideration.
• For any other case of missing IRR, the score
  given was 2D.

39
Criterion CA3 Relative investment cost

• Where the min and max values of a country for
  each project type were not available (and they
  werent 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.

40
Criterion CA4 Level of transport demand

• If traffic data were available then the
  quantification was done as described earlier.
• If no traffic data were available without any
  justification- the score given was the lowest 1E
  
• 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 2D.

41
Criterion CA5 Financing feasibility

• 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 5A.
• 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 4B.
• 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 3C. 
• In any other case the score was 2D, 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 1E.

42
Criteria CB1 CB2Relative importance of
international demand of traffic (passengers
freight)

• If traffic data were available then the
  quantification was done as described earlier.
• If no traffic data were available without any
  justification- the score given was the lowest 1E
  
• 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 2D.

43
Criterion CB3 Alleviation of bottlenecks

• 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 1E
  
• 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 3C, 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 2D.

44
Criterion CB4 Interconnection of existing
networks

• If in the projects description was mentioned that
  this project (road or rail) will alleviate a
  missing link the score given obviously is 5A.
• 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 3C.
• 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 3C and
  in some cases 5A.

45
Criterion CB5 Technical interoperability of
network

• If a project was cross-border and based on the
  descriptions of the participating countries
  interoperability problems exist, then 3C or
  lower.
• 4B is used only in not so severe
  interoperability cases, where data exists and it
  can be verified.
• However all projects considered were inside
  countrys borders so the score given to all was
  5A.

46
Criterion CC1 Border effects

• If a project was cross-border and based on the
  descriptions of the participating countries
  border problems exist was 3C or lower.
• 4B is used only in cases when border problems
  exist, but are not so critical.
• However, all the projects considered were inside
  countrys borders so the score given to all was
  5A.

47
Criteria CC2, CC3, CC4, strategically sensitive
criteria

• For the three strategically sensitive criteria
• Political commitment (CC2)
• Regional and international cooperation (CC3)
• Historical/ heritage/ environmental issues (CC4)
• the score given to all projects was 5A,
  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.
• In cases that a country expert assigns a
  different value then the default value will be
  changed.

48
Criterion CC5 Economic impact

• Where a) the expected IRR was high, b) the
  revenues from tolls -in case of roads-were
  expected to be sufficient, c) the travel time was
  reduced, d) safety was increased, e) access to
  ports or other terminals was easier and f)
  socio-economic parameters (economic development,
  unemployment) of the region were expected to
  benefit from the project, the score given was
  5A.
• Where a) the expected IRR was medium towards
  high, b) the travel time was reduced, c) safety
  was increased and d) socio-economic parameters
  (economic development, unemployment) of the
  region were expected to benefit from the project,
  the score given was 4B. 
• Where a) the expected IRR was medium and b) the
  travel time was reduced score given was 3C.
• For any other case the score given was 2D,
  except where no data were available and then the
  score given was 1E.

49
Example of Evaluation Methodology for TEM using
assumptions

• Greek Project
• Egnatia Motorway
• Section Komotini - Vanianos.

50
Example steps

• Complete Project Fiche see next
• Derive Criteria Scores
• Use default set of Criteria Weights
• Derive Project Total Score
• Prioritize Project

51
TEMPLATE 2A Road and related infrastructure
Project Fiche
52
(No Transcript)
53
(No Transcript)
54
(No Transcript)
55
Criteria Scores-1

• 1. Degree of urgency
• In the socio-economic evaluation of the project,
  as included in the feasibility study, and
  according to governmental priorities, the
  projects implementation is characterized as A
  immediate requirement.
• CA15
• 2. Cost effectiveness
• Based on the data of TEMPLATE 2A, the projects
  cost effectiveness is characterized as A
  Excellent (IRR higher than 15 ).
• CA25

56
Criteria Scores-2

• 3. Relative investment costs (costs/GDP)
• Based on the data of TEMPLATE 2A, countrys
  GDP and Figure 1 the projects relative
  investment cost is characterized as C.
• CA33 (or 2,8 from Figure 1 directly -see
  example next)
• 4. Level of Transport Demand
• Based on the data of TEMPLATE 2A, the level of
  transport demand is 14000vdp, therefore the
  projects level of transport demand is
  characterized as B present traffic from 10000 to
  14000 vpd.
• CA44

57
X1 110 million X2 200 million X3 159
million GDP 136.300 millions
Therefore (X1/GDP) 0,08 (X2/GDP) 0,15
(X3/GDP) 0,116
58
Criteria Scores-3

• 5. Financing Feasibility
• In the viability study of the project, and
  according to experts opinion, the projects
  financing feasibility is characterized as B Very
  Good.
• CA54
• 6. Relative importance of international demand of
  traffic (passengers)
• Based on the data of section 1, the relative
  importance of international demand of passenger
  traffic is 5,2 (500/9500) therefore the
  projects relative importance of international
  demand of passenger traffic is characterized as
  E less than 7 of total traffic.
• CB11

59
Criteria Scores-4

• 7. Relative importance of international demand of
  traffic (goods)
• Based on the data of section 1, the relative
  importance of international demand of freight
  traffic is 33,33 (1500/4500) therefore the
  projects relative importance of international
  demand of freight traffic is characterized as A
  more than 30 of total traffic.
• CB2 5
• 8. Alleviation of Bottlenecks
• Based on experts opinion the projects
  alleviation of bottlenecks is characterized as A
  Satisfactory.
• CB35

60
Criteria Scores-5

• 9. Interconnection of existing networks
• Based on experts opinion the projects
  interconnection of existing networks is
  characterized as A Missing Link.
• CB4 5
• 10. Technical interoperability of network
• Based on experts opinion the projects
  technical interoperability in the network is
  characterized as A No interoperability problems.
• CB55

61
Criteria Scores-6

• 11. Border effects
• The project is a one-country one, 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.
• CC25
• 13. Regional and International Cooperation
• The regional cooperation (since there is no
  international cooperation) is characterized as A
  Satisfactory.
• CC35

62
Criteria Scores-7

• 14. Historical/ heritage Issues
• According to the Environmental Impacts Study
  of the project, there are no effects on
  historical heritage, therefore the project scores
  A No effects.
• CC4 5
• 15. Economic Impact
• According to the socio-economic study of the
  project, it is expected to have a C Medium
  Impact.
• CC23
• See TEMPLATE 3 completed next..

63
TEMPLATE 3 Criteria Scores
64
TEMPLATE 4 Criteria Weights
65
Projects Total Score

• 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)

66
TEMPLATE 5 Project Total Score
67
Prioritization of Project

• The Project Total Score is
• T.S. 4,32
• Therefore the project belongs in Priority
  category
• I projects, which may be funded and
  implemented rapidly, including on-going projects
  up to 2010.

68
First evaluation for submitted TEM projects

• See Matrix next results
• for the countries that sent data, namelyAustria,
  Bulgaria, Czech Rep., Greece, Hungary, Lithuania,
  Poland, Romania, Slovakia, Slovenia, Turkey and
  Ukraine.
• Countries for which data are pending.
• Italy, Belarus, Bosnia Herzegovina, Croatia,
  Georgia, Serbia Montenegro, F.Y.R.O.M, Russia
  Federation, Rep. Of Moldova

69
(No Transcript)
70
(No Transcript)
71
(No Transcript)
72
(No Transcript)
73
POLAND
74
(No Transcript)
75
POLAND
76
(No Transcript)
77
(No Transcript)
78
(No Transcript)
79
(No Transcript)
80
Notes on the Matrix

• In total the TEM projects are 232 with
• 13 (else 30 projects) belong in Priority
  Category I
• 35 (else 81 projects) belong in Priority
  Category II
• 1 (else 3 projects) belong in Priority Category
  III
• 51 (else 118 projects) belong in Priority
  Category IV 
• with the last result a bit overestimated since
  the consultant was force in most cases of no data
  to put the minimum score.