Adapted cost-benefit analysis methodology for innovative railway services

Giuseppe Siciliano,Francesco Barontini,Ilaria Grossoni,Thomas H Zunder,Dewan Md Zahurul Islam,Stefan Mahler

doi:10.1007/s12544-016-0209-5

Giuseppe Siciliano, Francesco Barontini + Show 4 more

Open Access

https://doi.org/10.1007/s12544-016-0209-5

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Abstract

This paper reviews and adapts the methodology “Guide on the methodology for carrying out cost-benefit analysis” prepared by the European Commission (EC). It is specifically tailored to the assessment of an innovative rail freight service, and its application in the context of a number of potential service areas (principally pan European) in Europe. The SPECTRUM service is an innovative rail freight concept for the transport of low density high value (LDHV) goods. The methodology is primarily based on the “Guide to cost-benefit analysis of investment projects” of the European Commission. The cost definition takes input from a Life Cycle Cost analysis and applies a series of conversion factors. The benefits have been estimated considering the user’s surplus, i.e. the difference between Generalised Logistic Costs (GLC) borne by transport/logistics operators (and more in general freight transport service users) when using the SPECTRUM service and GLC connected to “pre-shift” mode, i.e. road or traditional rail; and the difference in external costs generated by freight transport activities connected to externalities such as air pollution and climate change, noise, accidents, and other externalities (up- and down-stream processes, nature and landscape, biodiversity losses, soil and water pollution, congestion). The adapted methodology has proven capable of representing the multiple effects resulting from the theoretical introduction of an innovative rail service in the freight transport sector - accounting for the differential impacts compared to the baseline scenario solutions. The logical articulation of the analysis is flexible; two specific estimation schemes (the estimation of ad hoc unit parameters for the external costs and ad hoc approach for using GLC as proxies of users’ surplus in a scenario where the introduction of the innovative service modifies the modal split of freight transport between different solutions) can be applied to other territorial contexts. It may also be used to evaluate other types of freight transport services, provided that some unit data can be retrieved, which pertain to site-specific cost of infrastructures, average speeds and rates of different transport solutions, costs of personnel and other operating costs.

Highlights

Over the last few decades there has been a significant growth in freight transport, most of which is served by road freight transport in Europe
The adapted methodology has proven capable of representing the multiple effects resulting from the theoretical introduction of an innovative rail service in the freight transport sector - accounting for the differential impacts compared to the baseline scenario solutions
The European Commission (EC) at the central level and many member states (e.g. France, Germany, and the UK) at the national level have been trying to encourage the higher usage of rail freight transport to reduce the environmental effects from the transport sector and reduce road congestion, in particular peak hours [11]

Summary

Introduction

Over the last few decades there has been a significant growth in freight transport, most of which is served by road freight transport in Europe. The European Commission (EC) at the central level and many member states (e.g. France, Germany, and the UK) at the national level have been trying to encourage the higher usage of rail freight transport (i.e. modal shift in favour of rail) to reduce the environmental effects from the transport sector and reduce road congestion, in particular peak hours [11]. The research in SPECTRUM project realised at the outset that to achieve modal shift from road it is important to offer a comparable service to road in terms of cost and transhipment time This is crucial in the sense that the European rail freight market is ostensibly a free market where, since 1 January 2007 and competition in a competitive environment is an indisputable need for the building of an efficient freight transport sector [5]. It is important that the fullsocio-environmental costs of competing transport mode options are accounted for [25]

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