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Adapted cost-benefit analysis methodology for innovative railway services

Lookup NU author(s): Dr Dewan Islam, Dr Tom ZunderORCiD



This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).


Purpose This paper reviews and adapts the methodology “Guidance on the methodology for carrying out cost-benefit analysis” prepared by the European Commission (EC). It is specifically tailored to the assessment of an innovative rail freight service, and its application in the context of a number of potential service areas (principally pan European) in Europe. The SPECTRUM service is an innovative rail freight concept for the transport of low density high value (LDHV) goods. Methods The methodology is primarily based on the “Guide to cost-benefit analysis of investment projects” of the European Commission. The cost definition takes input from a Life Cycle Cost analysis and applies a series of conversion factors. The benefits have been estimated considering the user's surplus, i.e. the difference between Generalised Logistic Costs (GLC) borne by transport/logistics operators (and more in general freight transport service users) when using the SPECTRUM service and GLC connected to "pre-shift" mode, i.e. road or traditional rail; and the difference in external costs generated by freight transport activities connected to externalities such as air pollution and climate change, noise, accidents, and other externalities (up- and down-stream processes, nature and landscape, biodiversity losses, soil and water pollution, congestion). Results The adapted methodology has proven capable of representing the multiple effects resulting from the theoretical introduction of an innovative rail service in the freight transport sector - accounting for the differential impacts compared to the baseline scenario solutions. The logical articulation of the analysis is flexible; two specific estimation schemes (the estimation of ad hoc unit parameters for the external costs and ad hoc approach for using GLC as proxies of users’ surplus in a scenario where the introduction of the innovative service modifies the modal split of freight transport between different solutions) can be applied to other territorial contexts. It may also be used to evaluate other types of freight transport services, provided that some unit data can be retrieved, which pertain to site-specific cost of infrastructures, average speeds and rates of different transport solutions, costs of personnel and other operating costs.

Publication metadata

Author(s): Siciliano G, Barontini F, Islam DMZ, Zunder TH, Mahler S, Grossoni I

Publication type: Article

Publication status: Published

Journal: European Transport Research Review

Year: 2016

Volume: 8

Print publication date: 01/12/2016

Online publication date: 07/09/2016

Acceptance date: 07/09/2016

Date deposited: 25/11/2016

ISSN (print): 1867-0717

ISSN (electronic): 1866-8887

Publisher: Springer Berlin Heidelberg


DOI: 10.1007/s12544-016-0209-5


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