[rts] Economic Evaluation

[neranjana at ips.lk]

Dear John Howe,

Yes, we would be very interested to see the material you refer to. Could
you please send it to Neranjana at ips.lk  Thank you. 

>There are other more complex considerations in relation to these types
>of projects which I discussed in a Working Paper prepared for the Bank
>discussions. Its in the form of an annotated Powerpoint presentation. I
>am happy to send a copy to anyone who is interested.
>

With regard to the economic evaluation we are attempting, I give below some
very brief details and would really appreciate your input. 

The LFRTD (the Sri Lanka forum) sponsored the Community Bus Project as a
pilot project to test an alternative transport delivery system appropriate
to under served rural conditions, i.e. the community self managed approach
to transport provision. The community was mobilised and the road was
repaired, funds raised for the purchase of the bus and the bus has been
operational since 1998. 

Hence, what we intend to carry out is not an appraisal or a pre-investment
justification  but an evaluation i.e post-investment. Your point regarding
it being rather unfair to attempt a retrospective justification based on
economic variables when the initial objective of the project was not
economic is very well taken. In our case too the initial project objectives
/ justification revolves around benefits such as reduced travel ( including
reduced walking) time, greater access to services (education, health,
markets) etc. 

Despite this we wish to carry out an economic evaluation.  This will not be
in the spirit of a judgmental evaluation but more in terms of a learning
exercise. At least that is how it seems at the moment.   The main issues we
are trying to look at are 1. Economic evaluation of the project which
includes the opportunity cost of community funds and labour, entrepenural
effort, material,  etc. 2. Economic impact to the community. In short - in
economic terms is the project worth the resources it has costed? 

Maybe we are asking all the wrong questions. But we do need to do an
economic evaluation especially as it is a pilot project.  So any ideas will
be gratefully received. If you know of any helpful web sites please do let
us know. 

Thank you for your interest. Looking forward to the feedback.
Neranjana

PS
Priyanthi, if you prefer me to mail John direct rather than through the
e-group please let me know. I just thought it might tempt others to join
in! but I don't want to disrupt the larger discussion.
thanks.





At 04:35 PM 11/29/00 -0800, you wrote:
>Dear All,
>
>This message was stimulated by the messages from Neranjana and Joaquin.
>First some clarity on terminology might help. If you are going to assess
>a bus project that has already been undertaken then that is an
>evaluation i.e. post investment. The correct criteria to use are those
>which were used to justify the project in the first place, or the
>objectives. These may have been economic, financial, purely social, or a
>mixture of all of them. Commonly they were not very specific in which
>case its rather unfair to attempt a retrospective justifcation that was
>not part of the original decision. 
>
>Unfortunately the literature is full of references to evaluation when
>what is meant is an appraisal or pre-investment justification. The
>reality is that there are still not any well recognised methods for
>appraising investments in which vehicles or vehicle services are to be
>provided with or without infrastructure investment. In September 1999 I
>was asked to address World Bank transport sector staff on just this
>issue. i.e. they are struggling with this one too. The Bank has coined
>the term 'rural transport projects' to describe such proposed
>investments. To the best of my knowledge they have only been undertaken
>in the past as pilot projects in which case no explicit economic
>justification was undertaken: they were simply assimilated as part of
>the non-justified components of large infrastructure loans. Training and
>a few other components are normally treated this way as well as long as
>they do not account for more than 20-25% of the total. Dieter can I am
>sure tell you the correct figure. The only specific example I am aware
>of was in Ghana (1986) where vehicle and infrastructure investment was
>treated as a package and justified on the basis of an increased marketed
>surplus assumed to result from the investment.
>
>There are other more complex considerations in relation to these types
>of projects which I discussed in a Working Paper prepared for the Bank
>discussions. Its in the form of an annotated Powerpoint presentation. I
>am happy to send a copy to anyone who is interested.
>
>regards,
>
>John Howe.
>
>PS Neranjana if you can tell me more about what you are trying to do I
>am happy to send more focused ideas.
>-- 
>jdhowe    http://www.ihe.nl    Phone: +31 (0)15 2151740  
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