Podcast
Questions and Answers
Traffic risk is a key step in a systematic approach to designing transport policy/infrastructure __________.
Traffic risk is a key step in a systematic approach to designing transport policy/infrastructure __________.
interventions
One source of uncertainty in traffic analysis includes the value of travel time __________.
One source of uncertainty in traffic analysis includes the value of travel time __________.
savings
Errors in model specification and parameters can significantly affect the __________ of traffic models.
Errors in model specification and parameters can significantly affect the __________ of traffic models.
accuracy
Economic __________ can significantly influence traffic risk and project appraisal.
Economic __________ can significantly influence traffic risk and project appraisal.
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Factors such as cost escalation and __________ stability are important considerations in risk assessment.
Factors such as cost escalation and __________ stability are important considerations in risk assessment.
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Assessing the current and future conditions play a vital role in the __________ of transport projects.
Assessing the current and future conditions play a vital role in the __________ of transport projects.
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The _________ effects refer to changes in the transport system that can impact the results of a project or policy.
The _________ effects refer to changes in the transport system that can impact the results of a project or policy.
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Possible strategies and measures should be determined to address the various __________ during appraisal.
Possible strategies and measures should be determined to address the various __________ during appraisal.
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One method for analyzing future events is through __________, which considers several alternative outcomes.
One method for analyzing future events is through __________, which considers several alternative outcomes.
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The __________ method is a structured communication technique relying on a panel of experts to forecast outcomes.
The __________ method is a structured communication technique relying on a panel of experts to forecast outcomes.
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Risk transfer can be managed through public-private partnerships, where private operators can assume __________ and revenue risk for toll roads.
Risk transfer can be managed through public-private partnerships, where private operators can assume __________ and revenue risk for toll roads.
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Stakeholder Engagement is crucial for identifying __________ during risk assessments.
Stakeholder Engagement is crucial for identifying __________ during risk assessments.
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When analytical techniques are unfeasible due to constraints, judgement-based methods often utilize expert __________.
When analytical techniques are unfeasible due to constraints, judgement-based methods often utilize expert __________.
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Techniques such as __________ and hedging are important for managing financial risks like fuel price volatility.
Techniques such as __________ and hedging are important for managing financial risks like fuel price volatility.
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Optimism Bias can affect decision-making approaches, leading to __________ in risk evaluation.
Optimism Bias can affect decision-making approaches, leading to __________ in risk evaluation.
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A __________ planning strategy is often employed to prepare for unexpected events and potential risks.
A __________ planning strategy is often employed to prepare for unexpected events and potential risks.
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The impact of fluctuations in fuel prices, economic conditions, and currency exchange rates are key drivers of ______.
The impact of fluctuations in fuel prices, economic conditions, and currency exchange rates are key drivers of ______.
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Economic downturns, such as the 2008/9 financial crisis, led to shortfalls in toll road revenue and ultimately contributed to toll road companies filing for ______.
Economic downturns, such as the 2008/9 financial crisis, led to shortfalls in toll road revenue and ultimately contributed to toll road companies filing for ______.
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Exchange rate risks are crucial, especially for servicing debts secured from ______ lenders.
Exchange rate risks are crucial, especially for servicing debts secured from ______ lenders.
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The Covid pandemic of 2020 led to a significant reduction in public transport ______.
The Covid pandemic of 2020 led to a significant reduction in public transport ______.
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Technical risks include construction delays, equipment failure, design flaws, and their impact on project ______.
Technical risks include construction delays, equipment failure, design flaws, and their impact on project ______.
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Technological uncertainty surrounds rapid advancements, such as uncertainty around electric vehicle ______.
Technological uncertainty surrounds rapid advancements, such as uncertainty around electric vehicle ______.
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Changing laws and regulations, like discouraging the import of diesel/petrol vehicles into Ethiopia, represent ______ uncertainty.
Changing laws and regulations, like discouraging the import of diesel/petrol vehicles into Ethiopia, represent ______ uncertainty.
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Judgement-based approaches like the ______ method help in understanding uncertainty.
Judgement-based approaches like the ______ method help in understanding uncertainty.
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The core scenario should reflect 'firm and funded government ______'
The core scenario should reflect 'firm and funded government ______'
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Scenario 1 is known as '______' which involves a smooth recovery from the pandemic.
Scenario 1 is known as '______' which involves a smooth recovery from the pandemic.
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Scenario 2 emphasizes the astonishing acceleration in ______ and energy sources for transport.
Scenario 2 emphasizes the astonishing acceleration in ______ and energy sources for transport.
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The 'Limits to Growth' scenario serves as a ______ scenario if the pandemic and war impact are worse than expected.
The 'Limits to Growth' scenario serves as a ______ scenario if the pandemic and war impact are worse than expected.
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Sensitivity testing assesses how robust a decision is to changes in specific ______.
Sensitivity testing assesses how robust a decision is to changes in specific ______.
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Sensitivity testing is particularly useful when there is a high level of uncertainty around key ______ and model parameters.
Sensitivity testing is particularly useful when there is a high level of uncertainty around key ______ and model parameters.
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Monte-Carlo Simulation is a method used to assess risks and uncertainties in ______.
Monte-Carlo Simulation is a method used to assess risks and uncertainties in ______.
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One disadvantage of testing is that it can be ______ intensive.
One disadvantage of testing is that it can be ______ intensive.
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Analysts and scheme promoters should present __________ to decision makers
Analysts and scheme promoters should present __________ to decision makers
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Assumptions used to create __________ should be clearly drawn out and explained
Assumptions used to create __________ should be clearly drawn out and explained
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An uncertainty log should summarise all known __________ and uncertainties in the modelling and forecasting approach
An uncertainty log should summarise all known __________ and uncertainties in the modelling and forecasting approach
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The focus should be placed on what the uncertainty analysis can tell decision makers and support them in making more __________ decisions
The focus should be placed on what the uncertainty analysis can tell decision makers and support them in making more __________ decisions
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The presentation of uncertainty is an integral part of uncertainty analysis and will help ensure such analysis feeds through to __________
The presentation of uncertainty is an integral part of uncertainty analysis and will help ensure such analysis feeds through to __________
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A triangular distribution is defined by three parameters: lower percentile value, modal value, and ______ percentile value.
A triangular distribution is defined by three parameters: lower percentile value, modal value, and ______ percentile value.
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The ______ distribution is often used for risk quantification for continuous random variables.
The ______ distribution is often used for risk quantification for continuous random variables.
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In Monte Carlo Simulation, multiple iterations of key variables are run through the model to produce a distribution of ______.
In Monte Carlo Simulation, multiple iterations of key variables are run through the model to produce a distribution of ______.
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The cumulative density function (CDF) of a random variable X is a function F(x) such that ______ = P(X ≤ x).
The cumulative density function (CDF) of a random variable X is a function F(x) such that ______ = P(X ≤ x).
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Inverse Transform Sampling Method is a common approach to generating random numbers from ______.
Inverse Transform Sampling Method is a common approach to generating random numbers from ______.
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The mean BCR for a project can be calculated assuming different components follow a triangular distribution with a mode at ______.
The mean BCR for a project can be calculated assuming different components follow a triangular distribution with a mode at ______.
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Optimism bias adjustments are made based on statistical modelling of similar past ______.
Optimism bias adjustments are made based on statistical modelling of similar past ______.
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In terms of risk management, identifying sources of ______ and uncertainty is essential for effective project planning.
In terms of risk management, identifying sources of ______ and uncertainty is essential for effective project planning.
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Statistical distributions are represented by probability density functions (PDFs) and ______ density functions (CDFs).
Statistical distributions are represented by probability density functions (PDFs) and ______ density functions (CDFs).
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A triangular distribution can be skewed or ______, meaning it is not equally distributed about the mean.
A triangular distribution can be skewed or ______, meaning it is not equally distributed about the mean.
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Study Notes
Planning & Economic Evaluation of Transport Projects
- Course: CENG6304
- University: Addis Ababa University
- Week: 9
- Instructor: Fitsum Teklu
Last Few Weeks
- Topics covered:
- Social cost-benefit analysis
- Alternative methods
- HDM (likely Highway Design Model)
Treatment of Risks & Uncertainty
- Key sources of risk and uncertainty in transport project appraisal:
- Traffic risk
- External factors (economic growth, cost escalation, political stability, COVID-19)
- Network effects
- Other changes impacting project/policy
Traffic Risk
- A key step in designing transport policy involves estimating traffic demand for alternative options (e.g., toll roads)
- Sources of uncertainty concerning inputs include travel time savings, GDP forecasts, vehicle operating costs (including EV technology), errors in model specification/parameters, and alternative route options for comparison
- Information is needed on elasticity of demand for price increases
External Risks
- Fluctuations in fuel prices, economic conditions, currency exchange rates, and pandemics (like COVID-19) have a significant impact on transport project demand.
- Economic downturns can lead to financial crises impacting toll road revenues and potential bankruptcy.
- Exchange rate risks are crucial for servicing international lender debts.
- The Covid pandemic significantly reduced public transport use.
Other Risks
- Technical risk: Construction delays, equipment failure, design flaws affecting project timelines and costs, and maintenance challenges like harsh weather impacting bridge costs are considerations.
- Technological uncertainty: Rapid advancements in transport technologies (e.g., electric vehicles) present uncertainties regarding revenue from fuel taxes.
- Policy and regulatory uncertainty: Changing laws, regulations, and funding priorities, such as a policy discouraging diesel/petrol vehicles in Ethiopia, are significant uncertainties.
- Social and political risks: Public opposition, community disruption, social inequalities, policy changes, and government instability impact transport projects.
Techniques for Understanding / Accounting for Uncertainty
- Judgment-based approaches (Delphi): Experts provide input in rounds, revising based on summarized feedback from prior rounds.
- Scenarios: Analyzing multiple plausible future outcomes (e.g., low, medium, high scenarios) regarding variables like GDP, or using the Ethiopian Transport & Logistics Master Plan as example data.
- Sensitivity studies: Assessing decision robustness by evaluating changes in specific inputs (e.g., vehicle operating cost, travel time).
- Monte Carlo simulation: Using software for multiple iterations with assigned probability distributions for input variables to produce a distribution of output possibilities.
Other Strategies for Managing Risk
- Contingency Planning: Prepare for potential challenges.
- Risk transfer: Private parties may assume responsibilities via partnerships (e.g., private operators assuming traffic/revenue risk for toll roads).
- Insurance and Hedging: Insurance and financial instruments (e.g., hedging against fuel price volatility) are used.
- Stakeholder Engagement: Involve all parties (communities, experts, policymakers) for better risk assessment.
Methods
- Focus on judgement-based methods, emphasizing the use of expert judgment for project risk assessments.
- The Delphi method is a structured technique.
Scenarios
- A systematic process for analyzing future events, considering multiple alternative outcomes.
- Scenarios need realistic, plausible outcomes for evaluation against strategic goals.
The 30-Year Ethiopian Transport and Logistics Master Plan
- The plan is based on three national economic scenarios:
- "Go-Ahead": smooth recovery from pandemic and other factors.
- "Next Generation": technology and energy source acceleration in transportation.
- "Limits to Growth": economic effect of the pandemic and war worse than expected
Sensitivity Testing
- Assessing how resistant a decision or model output is to changes in input data. It is most useful when dealing with significant uncertainties.
- Standard practice involves testing key sensitivities, noting that it is often resource-intensive.
- It does not provide probabilities of outcomes.
Monte Carlo Simulation
- A method for quantifying uncertainty.
- Steps involve identifying uncertainty in key inputs, assigning ranges or probability distributions, and running iterations through the model.
- Results produce a distribution of outcomes with useful output probabilities.
Additional Topics
- Error bars, fan charts, and violin plots for visual representation of uncertainties.
Questions?
- A prompt asking for any questions from the audience/students.
Next Week
- Topic: Monitoring & Evaluation.
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Description
This quiz explores key concepts related to traffic risk in the context of transport policy and infrastructure design. It covers topics such as uncertainty in traffic analysis, the impact of economic factors, and methods for assessing future conditions. Dive deep into the systematic approaches affecting project appraisals and outcomes.
