Author(s)

M Gannon & J Kirkup

Abstract

It is essential that rail extension projects have a robust business case to enable stakeholders to make a valued investment decision. One of the main components of the business case, although sometimes not fully recognised, is the scheme's operating costs. More often than not operating cost modelling is given insufficient attention despite being a significant component of the appraisal. During the feasibility stage operating costs are typically estimated at the strategic level, with the same costs sometimes remaining in the business case throughout the stages of project development. This raises the question as to the level of detail appropriate for evaluating a scheme's operating costs during these stages. Clearly there needs to be a correlation between the project stage and the level of detail required for estimating operating costs and consequently the business case. The purpose of this paper is to provide a framework for producing robust operating cost estimates and a form for presenting these as the project evolves throughout the project development process. The framework has been developed and successfully applied to produce strategic and detailed level avoided and incremental operating costs used in business cases for several rail extension projects in the United Kingdom.

Keywords