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BUDAPEST METRO LINE 4 FEASIBILITY STUDY Oktober 1996 |
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SECTION D - ECONOMIC AND FINANCING ISSUES
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Section D is dedicated to the economic analysis, planning and environmental issues. It ends with the financing appraisal, as follows: Economic analysisThe economic analysis was undertaken for the staging alternatives previously described in Section B and which form the basis of stage 2 assessment. Summary of the economic assumptions
The main input assumptions for Stage 2 are identical
to those for Stage 1 and are summarised in Table D-1 below:
Project costs
Overall project costs were further refined from Stage
1, based on refined design work on the alignments, station location
and sizing, as described in the above Section C. Table D-2 provides
a summary of the refined costs for alternatives being considered
in Stage 2.
* All costs include contingencies, testing etc.
Cost benefit analysis
Key evaluation outputs which have been used to assess
the relative merits of the three alternatives are the Net Present
Value, Cost to Benefit ratio and Internal Rate of Return as defined
below: Net Present Value (NPV):Sum of discounted costs less Sum of discounted benefits Benefit to Cost Ratio (BCR):Sum of discounted benefits divided by Sum of discounted capital costs
Internal Rate of Return (IRR):Discount rate at which
the project cash flow produces a zero NPV.
Economic assessments were undertaken based on the
refined cost estimates and patronage forecasts. The results of
these assessments are summarised in Table D-3, as follows:
Based on the low growth scenario, the main Kelenföld-Keleti
alignment has a Net Present Value of 99 M ECU with a benefit to
cost ratio of 1.34 and yields an Internal Rate of Return of 6.5%.
The extended alignment has a Net Present Value of 76 M ECU with
a benefit to cost ratio of 1.20 and yields an Internal Rate of
Return of 6.0%. The NPV for the partial Kelenföld-Kálvin
alignment is estimated at -8.74 with a benefit to cost ratio
of 0.96 and an IRR of 4.8.
The high growth scenario yields Net Present Values
of 265 M ECU, 246 M ECU and 71 M ECU with benefit to cost ratios
of 1.92, 1.7 0 and 1.37 for the main Kelenföld-Keleti alignment,
extended alignment and the partial Kelenföld-Kálvin
alignment respectively. The Internal Rate of Return for the main
Kelenföld-Keleti alignment is estimated at 8.3% and the extended
and partial alignments yield IRR values of 7.7 and 6.6 respectively.
Notes: All values are in million ECU discounted to 1996
Negative operating and maintenance
costs denote savings Incremental economic analysis
An incremental cost benefit analysis of the total
alignment, from Budaörs to Keleti was undertaken. This analysis
considers the section between Kelenföld to Kálvin
as the core section and provides the incremental value of constructing
each further section beyond the core section, incrementally.
This shows the benefits (or disbenefits) of operating the section
between Kálvin and Keleti railway station over and above
the core section (Kelenföld to Kálvin) and the benefits
(or disbenefits) of operating the south west extension (Kelenföld
to Budaörs) over and above the section from Kelenföld
railway station to Keleti railway station. The results of this
analysis is presented in Table D-4.
Stage construction of the main alignment
Further to the basic assessment of Stage 2 alternatives,
more detailed analysis was performed on staging of the main alignment.
This was based on the following assumptions: The section between Kelenföld and Kálvin to be constructed over a two year period to open in 2005 and,
The remainder of the alignment from Kálvin
to Keleti to be constructed later, over a two year period, to
open in 2010. An element of increased costs is attached to this alternatives, firstly due to the need to construct the temporary terminal at Kálvin which adds some 15% to the cost of constructing the station at Kálvin Square and a further 10% to the construction of the section between Kálvin to Keleti due to the extra start-up costs and the costs of connecting Kálvin to the remainder of the alignment at a later date.
The results of the cost benefit analysis for this
alternative is summarised in Table D-5, below. For the low growth
scenario, this shows an NPV of 94.33 M ECU, benefit to cost ratio
of 1.35 and an Internal Rate of Return of 6.7%. For the high
growth scenario the analysis shows an NPV value of 256 M ECU,
BCR ratio of 1.98 and an IRR of 8.7%.
With the exception of the Net Present Value, the economic indicators for the staging alternative show a marginal improvement over the alternative of a single construction stage. However, the differences are considered within the accuracy of the model and therefore it cannot be concluded that staging as specified above provides an economic advantage. |
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