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Demand and operating cost forecasting accuracy for toll road projects

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  • Welde, Morten

Abstract

Inaccurate forecasts represent a major source of risk in road and toll projects because they could result in financial difficulties or even bankruptcy. This paper focuses on demand and operating cost forecasting accuracy for Norwegian toll projects by comparing the forecasted and actual levels of traffic and operating costs. The differences among the types of projects and the effects of project size, time and demand ramp-up are also examined. Our study finds that traffic forecasts for Norwegian toll projects are fairly accurate, on average. However, a majority of the investigated projects experienced overestimation, and a huge general error in the forecasts suggests that this is also a source of risk that merits greater scrutiny. Inaccuracies are common among all project types and sizes. Operating costs are frequently underestimated; on average, these costs are about 30% higher than estimated.

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  • Welde, Morten, 2011. "Demand and operating cost forecasting accuracy for toll road projects," Transport Policy, Elsevier, vol. 18(5), pages 765-771, September.
    • Handle: RePEc:eee:trapol:v:18:y:2011:i:5:p:765-771
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    Cited by:

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    6. Odeck, James & Welde, Morten, 2017. "The accuracy of toll road traffic forecasts: An econometric evaluation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 101(C), pages 73-85.
    7. West , Jens & Börjesson , Maria & Engelson , Leonid, 2016. "Forecasting effects of congestion charges," Working papers in Transport Economics 2016:9, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
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