Economic and Financial Appraisal

Investments in transport systems are often large, creating significant increases in capacity that will be progressively utilised over a long period. The challenge on the one hand is to ensure that transport investments contribute effectively to a nations or regions economy and society, and on the other hand that such investments are financially viable, self-sufficient and profitable from the investor’s point of view.

In its advisory services TCP International accounts for:

  • Transport infrastructure and services is not an end in itself. In view of scarce resources every investment ought to be financially and economically justified.

  • An asset based approach is necessary, i.e. taking entire life cycle costs into account and keep up with repairs and maintenance in order of not wasting accumulated capital;

  • Users ought to pay the cost of their use of assets including external costs of their usage (user-pays principle) and this can be strived for through tariffs, tolls and charges to a politically acceptable extent;

  • Prioritise the financing of transport infrastructure and transport services in a way that give the highest returns where standard financial and economic analysis is appropriate. Over-provision of infrastructure is as bad as inadequate provision in view of the transport demand;

  • Deregulation and commercialisation has proved successful in order to achieve viable transport systems if carefully planned and targeted and if it is accompanied by adequate laws, efficient enforcement and competent regulative agencies.

TCP International accompanies the investment process from developing first ideas up to realisation and acceptance testing. We advice our clients either in the entire investment process or accompany them during selected process phases. TCP International competences in the economic and financial appraisal process include:


TCP International competences

  • Evaluation / analysis of actual and possible future developments (land-use, tourism, employment, inhabitants, economic and social developments) and resulting mobility needs;

  • Definition of project scenarios and actual and future supply capacities;

  • traffic surveys, traffic modelling and simulation, traffic forecasting;

  • concept fine-tuning and optimisation e.g. of alignment, stations, operation, safety devices;

  • estimation of life cycle costs and external costs of transport measures;

  • cost and revenue estimations; cash flow calculation and cost benefit analysis (CBA);

  • determination of the economic and financial as well as the environmental and institutional/legal feasibility of projects;

  • sensitivity analysis and risk assessments;

  • possible/necessary institutional set-up, marketing concept and revenue optimisation;

  • financing concept and financial engineering;

  • preparedness for bill of quantity documents and tender documents;

  • accompanying acceptance testing and setting-up of operation;

  • project management for the tender and implementation process.


This expertise together with the described expertise in other fields of competence (political, legal, environmental, and technological) enables TCP International to carry out comprehensive due diligence investigations. Thus, our clients can gain a holistic picture about opportunities and risks involved in their potential investments.