Appraisal in the rail sector: General issues and British experience in dealing with them

This paper first considers the role of appraisal in rail systems, and shows how this extends far beyond simply appraising investment projects to considering long run strategy, renewals, quality of service and closures. It then discusses the particular issues which make rail appraisals complex, including the long life of assets, the complexity of the range of options available, the many dimensions of quality of service, network effects, externalities, the importance of the impacts on other modes and the issue of wider economic impacts. Finally it illustrates these issues with reference to the history of the appraisal of high speed rail in Britain, where key arguments have concerned the robustness of demand forecasts over such long time periods, the valuation of business time savings, the adequacy of the appraisal of alternatives and the extent of wider economic impacts.