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Appraising Transformational Projects: The Case of the Grand Paris Express

A well-executed economic appraisal can demonstrate to the decision maker whether investment in a project represents a good use of resources and inform the decision to approve the scheme, postpone it or reject it. But the micro-economic partial equilibrium foundations of cost-benefit analysis are challenged by projects such as the Grand Paris Express, a scheme which is intended to transform the level of economic development in the area it will serve.

There are multiple challenges for modelling, forecasting and appraisal. These include definition of the counterfactual do-nothing or do-something-else case and representation of the economic system in which population, employment and income is contingent upon whether or not the scheme is undertaken. Crucially, the practical implications of concepts such as the economic benefits of agglomeration have to be unravelled to predict the behaviour of the sectors whose responses to changes in accessibility are key determinants of the outcome of investment in the project. 

The aim of this report is to review the conduct of appraisal in these challenging conditions. 

This report is part of the International Transport Forum’s Country-Specific Policy Analysis (CSPA) series. These are topical studies on specific transport policy issues of concern to a country carried out by ITF on request.