Civil Engineering Reference
In-Depth Information
HOW TO JUDGE A BRIDGE PROPOSAL
Capital investment in big public things like infrastructure projects is bound
to have many effects. Those who want to understand the project's value
have no choice but to make their way through this conceptual thicket.
We have suggestions on how to make it through to the other side (to the
decision), but the help we can offer is only partial. Research into project
analysis and especially into external effects is ongoing, and the debates are
not going to disappear soon.
For decision making about our bridge, the essential starting point is
the internal cost-benefit analysis, calculated repeatedly to assess sensitivi-
ties to alternative assumptions. Whatever the additional studies that may
eventually be done, this is the first and foremost step and it has to be solid.
Much care must go into cost studies and projections of avoided travel time.
If there is not much trust in data on vehicle costs, driver costs, and accident
rates, then cost per avoided travel hour is a good basic indicator, though a
full internal NPV study is better.
External factors should indeed be taken into consideration; some will
make the project look better while others will make it look worse. So the
finding that a project's internal costs and benefits had a positive NPV makes
the project a contender for investment, but does not clinch the matter.
Studies of external effects may yet show it to be a bad idea. Conversely,
projects with negative internal NPV under multiple sensitivity studies should
be assessed skeptically on whether further study is even called for. A road
bridge that does not pass the internal cost-benefit test for its basic func-
tion as a traffic carrier will in all likelihood not be rescued by studies of
external effects.
Neighborhood effects, economic development effects, environmental
effects, and intangible effects are legitimate additional factors in decision.
But they are typically hard to measure; different analysts arrive at different
answers. If the bridge causes nuisances at neighborhoods near the landings,
that's a cause for concern, but is not decisive. For those who reside in a
city, fluctuations in traffic, air quality, crime, etc. are common—they may
occur just because a new office building went up and shifted traffic pat-
terns. For neighborhood effects to be decisive, the external effect the project
imposes should be substantial, beyond some threshold we can't estimate
here. Project supporters (and opponents) who claim neighborhood effect as
their rationale should be able to show that the added benefit (or harm) is
indeed substantial.
Neither is it decisive for the project decision to say that is has nega-
tive environmental effects. That the bridge will cause added air pollution
is no fatal blow, because pollution might increase even more if the project
