IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v18y2011i5p765-771.html
   My bibliography  Save this article

Demand and operating cost forecasting accuracy for toll road projects

Author

Listed:
  • Welde, Morten

Abstract

Inaccurate forecasts represent a major source of risk in road and toll projects because they could result in financial difficulties or even bankruptcy. This paper focuses on demand and operating cost forecasting accuracy for Norwegian toll projects by comparing the forecasted and actual levels of traffic and operating costs. The differences among the types of projects and the effects of project size, time and demand ramp-up are also examined. Our study finds that traffic forecasts for Norwegian toll projects are fairly accurate, on average. However, a majority of the investigated projects experienced overestimation, and a huge general error in the forecasts suggests that this is also a source of risk that merits greater scrutiny. Inaccuracies are common among all project types and sizes. Operating costs are frequently underestimated; on average, these costs are about 30% higher than estimated.

Suggested Citation

  • Welde, Morten, 2011. "Demand and operating cost forecasting accuracy for toll road projects," Transport Policy, Elsevier, vol. 18(5), pages 765-771, September.
    • Handle: RePEc:eee:trapol:v:18:y:2011:i:5:p:765-771
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X11000485
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Eliasson, Jonas, 2009. "A cost-benefit analysis of the Stockholm congestion charging system," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 468-480, May.
    2. Odeck, James & Bråthen, Svein, 2002. "Toll financing in Norway: The success, the failures and perspectives for the future," Transport Policy, Elsevier, vol. 9(3), pages 253-260, July.
    3. Odeck, James, 2008. "How efficient and productive are road toll companies?: Evidence from Norway," Transport Policy, Elsevier, vol. 15(4), pages 232-241, July.
    4. Salling, Kim Bang & Banister, David, 2009. "Assessment of large transport infrastructure projects: The CBA-DK model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(9-10), pages 800-813, November.
    5. Odeck, James, 2004. "Cost overruns in road construction--what are their sizes and determinants?," Transport Policy, Elsevier, vol. 11(1), pages 43-53, January.
    6. Erik Amdal & Gunnar Bårdsen & Kåre Johansen & Morten Welde, 2007. "Operating costs in Norwegian toll companies: a panel data analysis," Transportation, Springer, vol. 34(6), pages 681-695, November.
    7. Robert Bain, 2009. "Error and optimism bias in toll road traffic forecasts," Transportation, Springer, vol. 36(5), pages 469-482, September.
    8. Mackie, Peter, 2005. "The London congestion charge: A tentative economic appraisal. A comment on the paper by Prud'homme and Bocajero," Transport Policy, Elsevier, vol. 12(3), pages 288-290, May.
    9. Anguera, Ricard, 2006. "The Channel Tunnel--an ex post economic evaluation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(4), pages 291-315, May.
    10. Raux, Charles, 2005. "Comments on 'The London congestion charge: a tentative economic appraisal' ()," Transport Policy, Elsevier, vol. 12(4), pages 368-371, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. West, Jens & Börjesson, Maria & Engelson, Leonid, 2016. "Accuracy of the Gothenburg congestion charges forecast," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 266-277.
    2. Li, Zheng & Hensher, David A., 2012. "Estimating values of travel time savings for toll roads: Avoiding a common error," Transport Policy, Elsevier, vol. 24(C), pages 60-66.
    3. West , Jens & Börjesson , Maria & Engelson , Leonid, 2016. "Forecasting effects of congestion charges," Working papers in Transport Economics 2016:9, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    4. Jianwang Wang & Lan Luo & Rina Sa & Wei Zhou & Zihan Yu, 2023. "A Quantitative Analysis of Decision-Making Risk Factors for Mega Infrastructure Projects in China," Sustainability, MDPI, vol. 15(21), pages 1-25, October.
    5. Rahman, Syed & Balijepalli, Chandra, 2016. "Understanding the determinants of demand for public transport: Evidence from suburban rail operations in five divisions of Indian Railways," Transport Policy, Elsevier, vol. 48(C), pages 13-22.
    6. Bucsky, Péter & Juhász, Mattias, 2022. "Long-term evidence on induced traffic: A case study on the relationship between road traffic and capacity of Budapest bridges," Transportation Research Part A: Policy and Practice, Elsevier, vol. 157(C), pages 244-257.
    7. Morten Skou Nicolaisen & Patrick A. Driscoll, 2016. "An International Review of Ex-Post Project Evaluation Schemes in the Transport Sector," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 18(01), pages 1-33, March.
    8. Carlos Oliveira Cruz & Joaquim Miranda Sarmento, 2020. "Traffic forecast inaccuracy in transportation: a literature review of roads and railways projects," Transportation, Springer, vol. 47(4), pages 1571-1606, August.
    9. Odeck, James, 2019. "Estimating and predicting the operational costs of road tolls: An econometric assessment using panel data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 130(C), pages 466-478.
    10. Odeck, James & Welde, Morten, 2017. "The accuracy of toll road traffic forecasts: An econometric evaluation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 101(C), pages 73-85.
    11. Zapico, Emma & Baños-Pino, José F. & Mayor, Matías, 2024. "Optimal toll rates accounting for traffic accidents: A productive efficiency approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Odeck, James, 2019. "Estimating and predicting the operational costs of road tolls: An econometric assessment using panel data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 130(C), pages 466-478.
    2. Welde, Morten & Odeck, James, 2011. "The efficiency of Norwegian road toll companies," Utilities Policy, Elsevier, vol. 19(3), pages 162-171.
    3. Julia Numrich & Sascha Ruja & Stefan Voß, 2012. "Global Navigation Satellite System based tolling: state-of-the-art," Netnomics, Springer, vol. 13(2), pages 93-123, July.
    4. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2021. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Efficiency Series Papers 2021/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    5. Odeck, James, 2017. "Government versus toll funding of road projects – A theoretical consideration with an ex-post evaluation of implemented toll projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 98(C), pages 97-107.
    6. Raux, Charles & Souche, Stéphanie & Pons, Damien, 2012. "The efficiency of congestion charging: Some lessons from cost–benefit analyses," Research in Transportation Economics, Elsevier, vol. 36(1), pages 85-92.
    7. Eliasson, Jonas, 2009. "A cost-benefit analysis of the Stockholm congestion charging system," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 468-480, May.
    8. Marco Percoco, 2015. "Heterogeneity in the reaction of traffic flows to road pricing: a synthetic control approach applied to Milan," Transportation, Springer, vol. 42(6), pages 1063-1079, November.
    9. Odeck, James & Welde, Morten, 2017. "The accuracy of toll road traffic forecasts: An econometric evaluation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 101(C), pages 73-85.
    10. Morten Skou Nicolaisen & Patrick A. Driscoll, 2016. "An International Review of Ex-Post Project Evaluation Schemes in the Transport Sector," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 18(01), pages 1-33, March.
    11. Zapico, Emma & Baños-Pino, José F. & Mayor, Matías, 2024. "Optimal toll rates accounting for traffic accidents: A productive efficiency approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).
    12. Robin Lindsey, 2007. "Congestion Relief: Assessing the Case for Road Tolls in Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 248, May.
    13. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2022. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Economics of Transportation, Elsevier, vol. 31(C).
    14. Hamilton, Carl J., 2011. "Revisiting the cost of the Stockholm congestion charging system," Transport Policy, Elsevier, vol. 18(6), pages 836-847, November.
    15. Vonk Noordegraaf, Diana & Annema, Jan Anne & van Wee, Bert, 2014. "Policy implementation lessons from six road pricing cases," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 172-191.
    16. Oliveira Cruz, Carlos & Miranda Sarmento, Joaquim, 2017. "Horizontal bundling of infrastructure managers: The case of Portugal Infrastructure Company (roads and railways)," Transport Policy, Elsevier, vol. 55(C), pages 99-103.
    17. Eliasson, Jonas, 2017. "Congestion pricing," MPRA Paper 88224, University Library of Munich, Germany.
    18. Jens West & Maria Börjesson, 2020. "The Gothenburg congestion charges: cost–benefit analysis and distribution effects," Transportation, Springer, vol. 47(1), pages 145-174, February.
    19. Carlos Alberto Medina & carlos Eduardo Vélez, 2011. "Aglomeración Económica y Congestión Vial: los Perjuicios por Racionamiento del Tráfico Vehicular," Borradores de Economia 678, Banco de la Republica de Colombia.
    20. Hensher, David A. & Li, Zheng, 2013. "Referendum voting in road pricing reform: A review of the evidence," Transport Policy, Elsevier, vol. 25(C), pages 186-197.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:18:y:2011:i:5:p:765-771. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.