Intergration of environmental issues into the economic and financial appraisal of transport infrastructure projects in Rwanda

Abstract

The existing method for economic and financial appraisal of transport infrastructure projects in Rwanda is Cost-Benefit Analysis, which uses a single criterion and does not really consider environmental issues; while their inclusion in transport investment selection and project prioritisation is paramount to achieve a sustainable development. The present study proposes a novel method combining the results of both CostBenefit Analysis and Multi-Criteria Analysis for offering one decision support tool that can analyse together monetary and non-monetary criteria. The Analytic Hierarchy Process, a widely accepted method for project prioritisation, is the Multi-Criteria Analysis method used in this research for the integration of environmental issues into transport project appraisal. Cost-Benefit Analysis and Analytic Hierarchy Process scores are combined using the Weighted Sum Model to produce one combined score for project alternatives ranking. A case study is proposed for testing the application of the novel method with successful results; it ranked first an alternative that was neither selected by CostBenefit Analysis nor Analytic Hierarchy Process alone. The selected alternative by the novel method is economically less expensive compared to the one selected by Cost-Benefit Analysis; thus saving approximately Rwandan Francs 2.5 Billion on the case study project. The conducted sensitivity analysis confirms the stability of the obtained ranking, thus proving the novel method consistent. The proposed method is efficient for transport project appraisal, in both alternative selection and project prioritisation. Keywords: Project Appraisal, Cost-Benefit Analysis, Multi-Criteria Analysis, Multi-Criteria Decision Making, Analytic Hierarchy Process, Alternative Ranking, Project Prioritisation.!