West Coast Mainline – Does the DfT not know how to apply a Discount Rate?

The Transport Secretary has stated on radio 4 that the cancelled West Coast Main Line Franchise figures did not take into account inflation – something only vaguely hinted at in the press release.

I find this unbelievable – the first thing you do with any investment of PPP is discount to net present value?

Was it that certain elements of risk were not discounted – such as passenger variations or interest rate change risk?

Was there not a proper risk assessment model?  Was it a simple spreadsheet error that was not picked up and checked?

On major projects such as this are not the figures ran over by the chief account and chief economist at each department?  If not perhaps the real blame lies not in the staff suspended by at permanent secretary level for poor quality assurance systems?

About andrew lainton

International Urban Planner

Posted on October 3, 2012, in Transport Planning and tagged . Bookmark the permalink. 2 Comments.

  1. A prestigious academic economics group I was connected with some years ago offered free, no strings help to Network Rail to audit its risk assessment and contract procedures as part of its “engaging with the real world” remit. This was something that would have cost tens of thousands of pounds if done by managment consultants who would probably have hired the self-same people. Network Rail refused. Scared about what might be uncovered perhaps?

  2. However, several of the finest snoring solutions are inexpensive and
    non addictive and homeopathy has numerous possibilities that may benefit a snorer.
    If you have been contemplating surgery to stop snoring, think about the repercussions like spending a huge number of dollars, and ending up with
    a scar. However, there exists no harm trying out less costly
    but efficient remedies like nasal strips, homeopathic treatments, throat and nose sprays and aromatherapy.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 1,636 other followers

%d bloggers like this: