Friday, 4 September 2020
Austroads has published a report that proposes a framework to better support transport investment decisions.
Ross Guppy, Austroads Transport Infrastructure Program Manager said governments are under increasing budgetary pressure and need ways to confidently decide which projects should be prioritised.
“Transport agencies currently rely on different decision-making frameworks to help identify road network investment opportunities.”
“The chosen framework depends on the nature of the expenditure. For example, cost benefit analysis is commonly used to assess large capital upgrades and risk assessments are commonly used to identify bridges that need treatment.”
“While the different frameworks are useful, their outputs are difficult to compare which makes it hard to prioritise projects across different types of expenditure.” Ross said.
The proposed prioritisation framework supports investment decision-making across and within service groups, asset classes and expenditure categories.
The two step framework is designed to provide non-technical decision-makers with easy-to-understand outputs that help evaluate the benefits, costs and risks of different funding scenarios.
In step 1 transport agencies identify metrics that best align with their decision making process and corporate objectives. Those metrics are then used to evaluate individual investments. Commonly used metrics include net present value from an investment, risk score with and without investment, and expected key outcomes from the investment, such as expected crashes or fatalities avoided.
In step 2 transport agencies identify high level investment criteria, such as: the available funding; policy considerations or constraints such as risk tolerance; road safety targets; and the primary objective of the portfolio, such as maximising economic return or reducing fatalities.
The criteria are then used to identify an optimal portfolio of investments.
“The constraints help identify which projects must occur and outcomes that must be delivered. The framework then selects investment opportunities based on their contribution to the portfolio’s objective,” Ross said.
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