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Incorporating uncertainty and risk in transportation investment decision-making

Author

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  • Sabyasachee Mishra
  • Snehamay Khasnabis
  • Subrat Swain

Abstract

This paper presents a framework for addressing uncertainty and risk for large-scale transportation investments involving public-private participation. Demand, fare/toll and demand responsive costs are considered in the uncertainty analysis. Uncertainty analysis provides information on economic feasibility of the project. A set of relaxation policies is proposed to form various Ownership, Tenure and Governance (OTG) strategies reflecting the nature and level of participation by the public and private entity. A Monte Carlo Simulation-based Value at Risk is used to quantify risk. Finally, a methodology is proposed to integrate uncertainty and risk. The framework is tested on the proposed multibillion dollar Detroit River International Crossing connecting the cities of Detroit in the USA with Windsor in Canada. The analysis provides insights to probable outcomes for this transportation infrastructure investment under different OTG scenarios.

Suggested Citation

  • Sabyasachee Mishra & Snehamay Khasnabis & Subrat Swain, 2015. "Incorporating uncertainty and risk in transportation investment decision-making," Transportation Planning and Technology, Taylor & Francis Journals, vol. 38(7), pages 738-760, October.
    • Handle: RePEc:taf:transp:v:38:y:2015:i:7:p:738-760
    DOI: 10.1080/03081060.2015.1059121
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    Cited by:

    1. Haque, Khademul & Mishra, Sabyasachee & Golias, Mihalis M., 2021. "Multi-period transportation network investment decision making and policy implications using econometric framework," Research in Transportation Economics, Elsevier, vol. 89(C).
    2. Ashish K. Rathore & Arpan K. Kar & P. Vigneswara Ilavarasan, 2017. "Social Media Analytics: Literature Review and Directions for Future Research," Decision Analysis, INFORMS, vol. 14(4), pages 229-249, December.
    3. Locatelli, Giorgio & Invernizzi, Diletta Colette & Brookes, Naomi J., 2017. "Project characteristics and performance in Europe: An empirical analysis for large transport infrastructure projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 98(C), pages 108-122.

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