Measuring and benchmarking the benefits of Athens metro extension using an ex-post cost benefit analysis

Abstract

The development of metro projects is an essential step for the establishment of a high level of mobility, especially in urban areas, where traffic congestion is a major issue to tackle. Nevertheless, underground projects of this scale require major investments and often become the objects of skepticism regarding the associated expenditures. Cost-benefit analysis (CBA) is the tool to assess such projects and provide support in the decision process. Such tools are examined in the present paper, where a relatively small extension of the Athens metro is evaluated. The analysis is being made as an ex-post CBA, utilizing the retrospective experience and the available data from the project’s construction period and its operation until now. The findings of the current analysis are then compared to a respective ex-ante CBA that was made during the initial phase of the construction phase revealing a considerable positive change in valuation having twice as much more ENPV (€153 million vs. €340 million). By comparing the results of both the ex-ante and the ex-post approach the main differentiating factors, similarities and shortcomings are identified, especially in the cost aspects of the development and the accurate assessment and valuation of benefits that render the whole extension even more socially desirable than it was initially perceived.