Designing a Stakeholder-Centric Framework for Cost-Benefit Analysis of Transport Infrastructure Projects Thesis

Abstract

Transport infrastructure development is a crucial part of regional and national long-term growth strategies. The planning and implementation of transport infrastructure is key to regional development as it allows governments to promote the competitive advantages of the local market (e.g. labour and logistics costs) and to attract entrepreneurs and investors. However, the cost of these projects is a major issue, thus it is crucial to carefully examine project proposals before selection. Cost-benefit Analysis (CBA) is a conventional technique used for this purpose that allows decision-makers to prioritise promising investment candidates based on economic and social merit. Even though CBA has been widely applied in the evaluation of transport infrastructure projects in both developed and developing countries, it still has limitations. Scholars have identified a range of CBA issues occurring across technical, financial, socio-economic, and environmental groups of factors, but the central problems of CBA including stakeholder engagement and evaluation method selection remain unanswered. The Constructive Research Approach (CRA) was selected for this project because it is a research methodology for producing solutions that can be demonstrated through their implementation. CRA was implemented using five main steps. The first step was the identification of the relevant practical problem via the researcher’s experience and direct feedback from experts. The next step focused on obtaining pre-understanding of the research topic through a survey of CBA literature from 1844 to 2018 in order to structure the CBA schools of thought and to identify cost-benefit factors and the associated methods used for their evaluation in transport infrastructure projects. The third step was to construct two main artefacts: the skeleton of the stakeholder-centric CBA framework and its quantitative assessment system. Refinement and validation of the CBA framework followed. During framework development, five research seminars with colleagues in the ECIC were organised and then seven in-depth interviews with experts were conducted for validation purposes. Moreover, the quantitative aspects of the stakeholder-centric CBA framework were optimised by using the Visual Basic programming language to develop a computer application, termed CBAFS, to implement the framework and to perform CBA assessments. The key outcome of the research program, a stakeholder-centric CBA framework, allows practitioners to identify key stakeholders and to elicit their actual needs before identifying cost-benefit factors and associated methods for evaluation. The stakeholder-centric CBA framework provides a specific process consisting of seven steps for combining ‘hard’ and ‘soft’ systems approaches. The iterative cycle of the framework invokes soft systems approaches to tackle the issue of stakeholder engagement. Complementary to this, the CBAFS software employs a ‘hard’ systems approach to structure the execution of a CBA by an evaluation team through the following processes: (1) translation of stakeholder needs into measurable attributes; (2) selection of cost-benefit factors and associated evaluation methods; (3) implementation of the project evaluation; and (4) generation of cost-benefit information for stakeholder debate. The unique aspect of the stakeholder-centric CBA framework is that it allows stakeholders to be fully involved in the CBA process and this increases the transparency of the decision-making process. The stakeholder-centric CBA framework encourages cooperation between the evaluation team and key stakeholders such as construction contractors, design experts, financiers, economists, and environmentalists, and this enables the project evaluation team to better capture the values of the input parameters and more thoughtfully interpret the CBA evaluation. Moreover, the ‘satisficing’ benchmark, proposed in this study is extremely useful in determining the degree of consensus among key stakeholders on the planned investment decision. This research makes three significant contributions to the body of literature. The first contribution is through the structuring of the main CBA schools of thought and the elucidation of the differences between them in terms of philosophical viewpoints, assumptions, and constraints. The second contribution is the compilation of a comprehensive list of cost-benefit factors that can be incorporated into an evaluation program for any specific transport infrastructure project. Thirdly, the capstone contribution is the innovative artefact produced from this research: a stakeholder-centric CBA framework which allows practitioners to combine ‘soft’ systems approaches and ‘hard’ systems approaches to deal with previously-described technical and social issues in contemporary CBA practise. This framework enhances the ability of decision-makers to arrive at appropriately sustainable and feasible decisions regarding investment in transport infrastructure projects.