Proposed methodology for Proposed methodology for prioritization of investment prioritization of investment

projects along selected projects along selected Euro-Asian routesEuro-Asian routes

By the External Consultant By the External Consultant Dimitrios A. TsamboulasDimitrios A. Tsamboulas

AssociateAssociate Professor ProfessorDepartment of Transportation Planning and Department of Transportation Planning and

EngineeringEngineeringSchoolSchool of Civil Engineering of Civil Engineering

National Technical University of Athens National Technical University of Athens (NTUA)(NTUA)

3rd Expert Group Meeting on Developing Euro-Asian Transport Linkages27 – 29 June 2005, Istanbul, Turkey

ObjectiveObjective

identify project’s prioritization/ identify project’s prioritization/ categorization, categorization, support elaboration of a medium and long-support elaboration of a medium and long-

term investment strategyterm investment strategy encourage the realization of projects that have encourage the realization of projects that have

good chances of implementationgood chances of implementation all projects that are on the EATL routes or all projects that are on the EATL routes or

being extensions of those routes will be being extensions of those routes will be considered considered

Phases of MethodologyPhases of Methodology

Three consequent phasesThree consequent phases

PHASE A – IdentificationPHASE A – Identification

PHASE B – EvaluationPHASE B – Evaluation

PHASE C – PrioritisationPHASE C – Prioritisation

Identification:Identification: the initial screening process will group the initial screening process will group projects in two groups : projects in two groups : one group with those with secure funding or they one group with those with secure funding or they

are already funded and thus they are priority are already funded and thus they are priority projects by their nature projects by their nature (category I), and (category I), and

the other group with the rest that need the other group with the rest that need prioritizationprioritization

Evaluation Evaluation projects without committed funding with respect projects without committed funding with respect to more specific evaluation criteriato more specific evaluation criteria

PrioritizationPrioritization of the projects -based on the evaluation of the projects -based on the evaluation results- in order to classify them into four priority levels results- in order to classify them into four priority levels (Category I, II, III and IV-reserve). (Category I, II, III and IV-reserve).

After the completion of project’s prioritization, the After the completion of project’s prioritization, the identification of the projects that are or are not on the EATL identification of the projects that are or are not on the EATL routes will take place.routes will take place.

Identification PhaseIdentification Phase IdentificationIdentification of the projects that worth further of the projects that worth further

analysis and evaluationanalysis and evaluation according to:according to: Check whether they have committed funding or notCheck whether they have committed funding or not

if a project has secured funding if a project has secured funding will be automatically will be automatically placed in priority Category I and will be included in a placed in priority Category I and will be included in a special list of projects entitled “Projects with secured special list of projects entitled “Projects with secured funding”funding”

if not it will be evaluated in order to be prioritizedif not it will be evaluated in order to be prioritized Proceed in the following steps for only the non-Proceed in the following steps for only the non-

secured funded projectssecured funded projects Template 1 – identified projects will be Template 1 – identified projects will be

completed by the consultants, based on completed by the consultants, based on country reportscountry reports

TEMPLATE 1 – Identified TEMPLATE 1 – Identified ProjectsProjects

Data to be collectedData to be collected Countries will be requested to further elaborate the Countries will be requested to further elaborate the

list of projects proposed in the country reports in list of projects proposed in the country reports in the following manner:the following manner: For projects with funding committed (Category I), only For projects with funding committed (Category I), only

additional technical information is needed. additional technical information is needed. For projects without funding committed, complete For projects without funding committed, complete

additional technical information and evaluation additional technical information and evaluation criteria questionnaire.criteria questionnaire.

For newly proposed projects, complete all necessary For newly proposed projects, complete all necessary information, to be reported by filling the respective information, to be reported by filling the respective fichefiche

Fiches (TEMPLATES 2) to be completed by Fiches (TEMPLATES 2) to be completed by countries. Then all necessary data will be countries. Then all necessary data will be collected, with the assistance of external collected, with the assistance of external consultantsconsultants

Evaluation PhaseEvaluation Phase Selection of CriteriaSelection of Criteria – – two dimensions of criteriatwo dimensions of criteria

horizontal dimension horizontal dimension oror CLUSTER A CLUSTER A““Functionality/ CoherenceFunctionality/ Coherence” expresses the role of ” expresses the role of the project in the functionality and coherence of the the project in the functionality and coherence of the Euro-Asian Transport Linkages Euro-Asian Transport Linkages ((CCAA))

vertical dimension vertical dimension oror CLUSTER B CLUSTER B““Socio-economic Efficiency/ SustainabilitySocio-economic Efficiency/ Sustainability” ” expresses the socio-economic return on investment expresses the socio-economic return on investment ((CCBB))

Quantification of Criteria per projectQuantification of Criteria per project- - ScoresScores Weighting/ Hierarchy of Criteria Weighting/ Hierarchy of Criteria – – Delphi/Paired Delphi/Paired

ComparisonComparison Total Performance of Project Total Performance of Project

Selection of Criteria: Horizontal Selection of Criteria: Horizontal dimension dimension oror CLUSTER A CLUSTER A

1. Serve international connectivity (reaching a border 1. Serve international connectivity (reaching a border crossing point or provide connection with a link that crossing point or provide connection with a link that is border crossing); (CA1)is border crossing); (CA1)A: Greatly improves connectivity, B: Significantly A: Greatly improves connectivity, B: Significantly improves connectivity, C: Somewhat improves improves connectivity, C: Somewhat improves connectivity, D: Slightly improves connectivity, E: connectivity, D: Slightly improves connectivity, E: Does not improve connectivity.Does not improve connectivity.

2. Promote solutions to the particular transit transport 2. Promote solutions to the particular transit transport needs of the landlocked developing countries; (CA2)needs of the landlocked developing countries; (CA2)The projects provides solution..The projects provides solution.. A: Greatly, B: Significantly, C: Somewhat, D: Slightly, A: Greatly, B: Significantly, C: Somewhat, D: Slightly, E: Does not E: Does not

3. Connect low income and/or least developed 3. Connect low income and/or least developed countries to major European and Asian markets; countries to major European and Asian markets; (CA3)(CA3)The projects connects..The projects connects..A: Greatly, B: Significantly, C: Somewhat, D: A: Greatly, B: Significantly, C: Somewhat, D: Slightly, E: Does notSlightly, E: Does not

4. The project crosses natural barriers, removes 4. The project crosses natural barriers, removes bottlenecks, raises substandard sections to meet bottlenecks, raises substandard sections to meet international standards, or fills missing links in the international standards, or fills missing links in the EATL; (CA4)EATL; (CA4)The project crosses natural barriers or removes The project crosses natural barriers or removes bottlenecks and/ or missing links in EATL..bottlenecks and/ or missing links in EATL..A: Greatly, B: Significantly, C: Somewhat, D: A: Greatly, B: Significantly, C: Somewhat, D: Slightly, E: Does not Slightly, E: Does not

Selection of Criteria: Vertical Selection of Criteria: Vertical dimension dimension oror CLUSTER B CLUSTER B

5. Have high degree of urgency due to importance 5. Have high degree of urgency due to importance attributed by the national authorities and/or social attributed by the national authorities and/or social interest; (CB1)interest; (CB1)The project is.. The project is.. A: In the national plan and immediately required A: In the national plan and immediately required (for implementation up to 2008), B: In the national (for implementation up to 2008), B: In the national plan and very urgent (for implementation up to plan and very urgent (for implementation up to 2010), C: In the national plan and urgent (for 2010), C: In the national plan and urgent (for implementation up to 2015), D: In the national implementation up to 2015), D: In the national plan but may be postponed until after 2015, E: Not plan but may be postponed until after 2015, E: Not in the national plan.in the national plan.

6. Pass socio-economic viability test; (CB2)6. Pass socio-economic viability test; (CB2)The project is expected to increase traffic (both The project is expected to increase traffic (both existing and generated) …existing and generated) …A: More than 15%, B: 10-15%, C: 5- 10%, D: less A: More than 15%, B: 10-15%, C: 5- 10%, D: less than 5%, E: Will not affect trafficthan 5%, E: Will not affect traffic

7. Have a high degree of maturity, in order to be carried 7. Have a high degree of maturity, in order to be carried out quickly (i.e. project stage); (CB3)out quickly (i.e. project stage); (CB3)Project’s is at stage of…Project’s is at stage of…A: Tendering, B: Feasibility study, C: Pre-feasibility A: Tendering, B: Feasibility study, C: Pre-feasibility study, D: Planning, E: Identificationstudy, D: Planning, E: Identification

8. Financing feasibility; (CB4)8. Financing feasibility; (CB4)Projects’ financing feasibility is..Projects’ financing feasibility is..A: Excellent, B: Very Good, C: Good, D: Medium, E: LowA: Excellent, B: Very Good, C: Good, D: Medium, E: Low

9. Environmental and social impacts; (CB5)9. Environmental and social impacts; (CB5)The project has potentially has negative environmental The project has potentially has negative environmental or social impacts (pollution, safety, etc). or social impacts (pollution, safety, etc). A: No impact, B: Slight impact, C: Moderate impact, D: A: No impact, B: Slight impact, C: Moderate impact, D: Significant impact, E; Great impact.Significant impact, E; Great impact.

Templates to be completed Templates to be completed by the countriesby the countries

TEMPLATES 2 will be completed by the countries. However TEMPLATES 2 will be completed by the countries. However a part of them will be completed by the consultants based on a part of them will be completed by the consultants based on readily available information from the country reports and readily available information from the country reports and guidelines below and TEMPLATE will be available.guidelines below and TEMPLATE will be available. TEMPLATE 2A – Road and related infrastructure Project FicheTEMPLATE 2A – Road and related infrastructure Project Fiche TEMPLATE 2B – Rail and related infrastructure Project FicheTEMPLATE 2B – Rail and related infrastructure Project Fiche TEMPLATE 2C – Inland waterways and related infrastructure TEMPLATE 2C – Inland waterways and related infrastructure

Project FicheProject Fiche TEMPLATE 2D – Ports (sea and inland waterway), Inland TEMPLATE 2D – Ports (sea and inland waterway), Inland

container depot/Intermodal freight terminal/Freight container depot/Intermodal freight terminal/Freight village/Logistic centre and related infrastructure Project Fichevillage/Logistic centre and related infrastructure Project Fiche

An example followsAn example follows

TEMPLATE 2A – Road and related infrastructure TEMPLATE 2A – Road and related infrastructure Project FicheProject Fiche

TEMPLATE 2A – Road and related infrastructure TEMPLATE 2A – Road and related infrastructure Project FicheProject Fiche (cont.)(cont.)

TEMPLATE 2A – Road and related infrastructure TEMPLATE 2A – Road and related infrastructure Project FicheProject Fiche (cont.)(cont.)

TEMPLATE 2A – Road and related infrastructure TEMPLATE 2A – Road and related infrastructure Project FicheProject Fiche (cont.)(cont.)

The slightly shadowed cells will be completed by consultants (these are the first and last)

TEMPLATE 2B – Rail and related infrastructure TEMPLATE 2B – Rail and related infrastructure Project FicheProject Fiche

TEMPLATE 2B – Rail and related infrastructure TEMPLATE 2B – Rail and related infrastructure Project FicheProject Fiche (cont.)(cont.)

TEMPLATE 2B – Rail and related infrastructure TEMPLATE 2B – Rail and related infrastructure Project FicheProject Fiche (cont.)(cont.)

The slightly shadowed cells will be completed by consultants (these are the first and last)

TEMPLATE 2B – Rail and related infrastructure TEMPLATE 2B – Rail and related infrastructure Project FicheProject Fiche (cont.)(cont.)

TEMPLATE 2D – TEMPLATE 2D – Ports (sea and inland waterway), Inland container Ports (sea and inland waterway), Inland container depot/Intermodal freight terminal/Freight village/Logistic centre depot/Intermodal freight terminal/Freight village/Logistic centre and related infrastructure Project Ficheand related infrastructure Project Fiche

TEMPLATE 2D – TEMPLATE 2D – Ports (sea and inland waterway), Ports (sea and inland waterway), Inland container depot/Intermodal freight Inland container depot/Intermodal freight

terminal/Freight village/Logistic centre and related terminal/Freight village/Logistic centre and related infrastructure Project Fiche infrastructure Project Fiche (cont.)(cont.)

No need to complete Section No need to complete Section regarding Cluster Aregarding Cluster A

TEMPLATE 2D – TEMPLATE 2D – Ports (sea and inland waterway), Inland container Ports (sea and inland waterway), Inland container depot/Intermodal freight terminal/Freight village/Logistic centre depot/Intermodal freight terminal/Freight village/Logistic centre and related infrastructure Project Fiche and related infrastructure Project Fiche (cont.)(cont.)

The slightly shadowed cells will be completed by consultants (these are the first and last)

Quantification of CriteriaQuantification of Criteria A value is 5 (the highest) in terms of score. A value is 5 (the highest) in terms of score.

Respectively for value E, is 1 (the lowest).Respectively for value E, is 1 (the lowest).

Therefore:Therefore:

where:where: J = A or B andJ = A or B and i = 1,….,5i = 1,….,5

The template for criterions scores is TEMPLATE The template for criterions scores is TEMPLATE 3.3.

5,1JiC

TEMPLATE 3 – Project Criteria Scores (TEMPLATE 3 – Project Criteria Scores (each country each country complete the relevant column, if so wishes**complete the relevant column, if so wishes**))

Project no:………Project no:………

* Or provided by the Delphi team when necessary.* Or provided by the Delphi team when necessary.** In case country experts disagree with proposed scores, they may ** In case country experts disagree with proposed scores, they may fill up the respective column of their country with their proposed fill up the respective column of their country with their proposed scores, providing an adequate justification of the wanted change.scores, providing an adequate justification of the wanted change.

Revised TemplatesRevised Templates

In the following revised Templates In the following revised Templates 2A, 2B, 2C and 2D are presented.2A, 2B, 2C and 2D are presented.

Section 1 changes for each caseSection 1 changes for each case Section 2 remains the same in Section 2 remains the same in

contentcontent

Criterion Scores per projectCriterion Scores per project

Good communication between the externals Good communication between the externals and the country experts is necessary. and the country experts is necessary.

External consultants could complete External consultants could complete TEMPLATE 3 with scores based on provided TEMPLATE 3 with scores based on provided information by the countries. They will provide information by the countries. They will provide explanations –if necessary- on the reasons for explanations –if necessary- on the reasons for changing the scores and return it. changing the scores and return it.

Country representatives will have the Country representatives will have the opportunity to change the scores, if they are opportunity to change the scores, if they are dully justified. dully justified.

Weighting/ Hierarchy of Weighting/ Hierarchy of CriteriaCriteria

Country experts have received TEMPLATE 4 with Country experts have received TEMPLATE 4 with proposed default set of weights, derived by the proposed default set of weights, derived by the consultants, using Delphi method and Paired consultants, using Delphi method and Paired Comparison Matrix. Comparison Matrix.

The sum of criteria weights should be 1.The sum of criteria weights should be 1.

   Therefore: Therefore: and and

where:where:

J= A or B andJ= A or B and

i = 1,….,5i = 1,….,5

1,0JiW 15

1

B

AJ iJiW

Paired Comparison Paired Comparison MethodMethod

Paired comparison approach is a scaling approach. Paired comparison approach is a scaling approach. OnlyOnly one one question to be answered is “is this criterion question to be answered is “is this criterion

more important than the other?”. more important than the other?”. This means that the paired comparison matrix (see This means that the paired comparison matrix (see

Table I next) can be filled with zeros and ones, where Table I next) can be filled with zeros and ones, where one represents “is more important”. one represents “is more important”.

Alternatively, a Delphi method could be applied, with Alternatively, a Delphi method could be applied, with experts the external consultant, the UNECE and experts the external consultant, the UNECE and UNESCAPUNESCAP

By adding these values over the column, a measure is By adding these values over the column, a measure is obtained for the degree to which a criterion is obtained for the degree to which a criterion is important compared to all other criteria, if finally important compared to all other criteria, if finally these measures are standardisedthese measures are standardised (see Formula I next) (see Formula I next), , a set of criteria weights is created.a set of criteria weights is created.

TEMPLATE 4 – Criteria Weights (TEMPLATE 4 – Criteria Weights (each country complete the each country complete the relevant column, if so wishes**relevant column, if so wishes**))

* Or provided by the Delphi team * Or provided by the Delphi team ** In case country experts disagree with proposed weights. They may fill up ** In case country experts disagree with proposed weights. They may fill up the respective column of their country with their proposed weights the respective column of their country with their proposed weights providing an adequate justification of the wanted change.providing an adequate justification of the wanted change.

Criteria Weights from the Criteria Weights from the Country ExpertsCountry Experts

Good communication between the externals Good communication between the externals and the country experts is necessary. and the country experts is necessary.

Upon completion of TEMPLATE 4 with default Upon completion of TEMPLATE 4 with default set of criterion weights to be used in the set of criterion weights to be used in the evaluation of project proposals, filled by the evaluation of project proposals, filled by the consultants, will be communicated to the consultants, will be communicated to the country experts. country experts.

If there is disagreement for the default weights If there is disagreement for the default weights proposed by the consultants, country experts proposed by the consultants, country experts may fill up the respective column of their may fill up the respective column of their country with their proposed weights, providing country with their proposed weights, providing explanations on the reasons for changing the explanations on the reasons for changing the weights and return it. weights and return it.

Table I An example of Paired Comparison matrix

W1 W2 … WN W1 W2 … WN

Standardised score wi = (I) scoresraw

wscoreraw i

''

..''

Total Performance of Total Performance of ProjectProject

To derive the project’s To derive the project’s total scoretotal score we use the we use the following relationship:following relationship:

T.S.T.S.ProjectProject = =

where:where:

CCJiJi [1,5] [1,5]

WWJiJi [0,1] [0,1]J = A or B andJ = A or B andi = 1,….,5i = 1,….,5

TSTSProjectProject [1,5] [1,5]

B

AJ iJiJi WC

5

1

*

Prioritization PhasePrioritization Phase The combination of the criteria weights and The combination of the criteria weights and

scores puts each project in one of the four scores puts each project in one of the four priority categories or reserve category. priority categories or reserve category. If the project already has committed funding or If the project already has committed funding or

is funded, it belongs to priority category is funded, it belongs to priority category II.. If the project scores between 4-5 then it belongs If the project scores between 4-5 then it belongs

to priority category to priority category IIII.. If the project scores 3 -4 then it belongs to If the project scores 3 -4 then it belongs to

priority category priority category IIIIII.. If the project scores 1 -3 then it belongs to If the project scores 1 -3 then it belongs to

priority category priority category IVIV.. If the project has not pass the pre-selection If the project has not pass the pre-selection

phase then it belongs to reserve categoryphase then it belongs to reserve category..

Priority CategoriesPriority Categories II: projects, which have funding secured and are : projects, which have funding secured and are

ongoing or planned and are expected to be ongoing or planned and are expected to be completed in the near future (up to2010). completed in the near future (up to2010).

IIII: projects which may be funded and : projects which may be funded and implemented rapidly (up to 2015).implemented rapidly (up to 2015).

IIIIII: projects requiring some additional : projects requiring some additional investigations for final definition before likely investigations for final definition before likely financing (up to 2020).financing (up to 2020).

IV/ ReserveIV/ Reserve: projects requiring further : projects requiring further investigations for final definition and scheduling investigations for final definition and scheduling before possible financing or projects to be before possible financing or projects to be implemented in the long run, including the implemented in the long run, including the projects where insufficient data existed.projects where insufficient data existed.

After the completion of project’s After the completion of project’s prioritization, the identification of the prioritization, the identification of the

projects that are or are not on the EATL projects that are or are not on the EATL routes will take place. routes will take place.

This will help to “map” the current and This will help to “map” the current and expected status of the infrastructure expected status of the infrastructure

along the routes.along the routes.