Methodology for improving the assessment of the economic efficiency of transport infrastructure development

Transport infrastructure, especially railway infrastructure, plays a key role in economic development, ensuring efficient movement of goods and people. It is characterised by high capital intensity, long operational lifespans, and generation of socio-economic effects. Therefore, there is a need to improve the methodology for assessing the economic efficiency of creating and developing transport infrastructure objects. The traditional approach to evaluation is based on discounting cash flows. When applying this method, significant capital investments are compared with devalued effects in subsequent years due to discounting, during which the infrastructure object reaches the specified estimated load. Moreover, it does not consider the fact that the transport infrastructure benefits and holds value not only for the current generation but also for the future one. Additionally, it, as an economic good, cannot be seen as a one-timely consumed product: this transportation service cannot be accumulated. For a more accurate and comprehensive assessment of the efficiency, particularly in the case of railway transport, it is proposed to consider the results of long-term operation of the transport infrastructure at full (estimated) load not in the future but in the present (present сontinious). The economic assessment indicators include initially invested and adjusted capital, annual effect, efficiency ratio, and the value of the transport infrastructure object. The research results aim to provide an adequate assessment of project implementation efficiency in the field in question. In the future, the methodology can be enhanced by defining risks of not ensuring normal infrastructure load throughout the entire calculation period as well as by assessing the reduction in profitability or increase in transportation costs.

1. Böhm-Bawerk Eu. von. Capital and interest. Positive theory of capital. Volume 2. Trans. from Eng. Chelyabinsk: Sotsium; 2010. 916 р. (In Russian).

2. Daskovsky V.B., Kiselyov V.B. New approach to the economic justification of investments. Moscow: Kanon+; 2016. 400 p. (In Russian).

3. Fisher I. The theory of interest. New York: Macmillan; 1930. 566 p.

4. Galaburda V.G., Sokolov Yu.I., Lavrov I.M., Belozyorov V.L., Teryoshina N.P., Bubnova G.V. et al. Management of marketing activities in transport: monograph. Moscow: Russian University of Transport (Moscow Institute of Transport Engineers); 2018. 300 p. (In Russian).

5. Gerasimov M.M. Discounting costs in the projects of railway construction. Railway Economics. 2017;12:48–58. (In Russian).

6. Gerasimov M.M. Imperfection of the cost discounting method to justify the construction of transport infrastructure projects. Financial aspects of structural transformations in the economy. 2023;9:46–53. (In Russian).

7. Kapeliushnikov R.I. Behavioral economics and new paternalism. Part I. Voprosy Ekonomiki. 2013;9:66–90. (In Russian). https://doi.org/10.32609/0042-8736-2013-9-66-90

8. Kvitsinsky A.S. Problem of comparing different-time capital expenditures. Proceedings of the Moscow Institute of Railway Engineers. 1981;686:10–17. (In Russian).

9. Lapidus B.M., Misharin A.S., Makhutov N.A., Fomin V.M., Zaitsev A.A., Macheret D.A. About the scientific platform of the rail transport development strategy in Russia until 2050. Bulletin of Joint Scientific Council of JSC Russian Railways. 2017;2:1–20. (In Russian).

10. Ledna A.Y. The methods of economic efficiency evaluation transport infrastructure projects. Railway Economics. 2019;9:14–24. (In Russian).

11. Ledneу A.Yu. Formulation of methodological approaches to assessing the economic efficiency of transport infrastructure development with consideration to volumes and unevenness of freight. Diss. ... Cand. Sci. (Econ.): 08.00.05. Moscow: Russian University of Transport (Moscow Institute of Transport Engineers); 2020. 176 p. (In Russian).

12. Macheret D.A. On the economic problems of development of transport infrastructure. World of Transport and Transportation. 2011;3(36(9):76–83. (In Russian).

13. Macheret D.A., Ledney A.Yu. Value of transport infrastructure: essence and formation. Railway Economics. 2017;9:13–20. (In Russian).

14. Macheret D.A., Razuvaev A.D. Scientific problems of evaluating the economic efficiency of investments in transport infrastructure projects with a long life cycle. Bulletin of the Academic Board of IEDT JSC. 2020;5:31–44. (In Russian).

15. Macheret D.A., Valeev N.A. Methodological bases for assessing the economic efficiency of transport systems. Railway Economics. 2022;5:46–57. (In Russian).

16. Matsul Ye.G. Business valuation tools: modern characteristics and development prospects. Proceedings of BSTU. Issue 5: Economics and Management. 2022;2(262):40–48. (In Russian).

17. Mises L. von. Human action. А treatise on economics. Trans. from Eng. Chelyabinsk: Sotsium; 2023. 1024 р. (In Russian).

18. Razuvaev A.D. Economic evaluation of the creation, evolution, and strategic development of transport infrastructure (on the example of railway transport): monograph. Moscow: Prometej; 2021. 286 p. (In Russian).

19. Rothbard M.N. Time preference. In: Еconomic theory. Trans. from Eng. Yu. Avtonomov. Moscow: Infra-M; 2004. Pp. 827–833. (In Russian).

20. Serov V.M., Tikhonov Y.P. Methodology for the evaluation of the economic effectiveness of investment projects. Russian Journal of Economic Theory. 2021;3(18):433–447. https://doi.org/10.31063/2073-6517/2021.18-3.8

21. Serov V.M., Tikhonov Yu.P. On the comparative assessment of the investments’ economic efficiency in production capital. Vestnik universiteta. 2023;5:131–140. (In Russian). https://doi.org/10.26425/1816-4277-2023-5-131-140

22. Silkina N.G., Chernikova A.A., Karpov E.A., Fedin A.V., Kobzeva A.G. Discounting cash flows in investment projects: monograph. Stary Oskol: Tonkie naukoyomkie; 2014. 200 p. (In Russian).

23. Tikhonov Yu.P. About the problem of time factor accounting in the theory of evaluation of economic efficiency of investment projects. Vestnik universiteta. 2015;12:140–145. (In Russian).

24. Tikhonov Yu.P. Evolution of the concept of discounting cash flow: from Leonardo of Pisa’s “Liber Abaci” to Irving Fisher’s “The theory of interest”. Journal of Economic Theory. 2017;1:141–154. (In Russian).

25. Wisniewski J., Schut D. (eds.) A global vision for railway development. Paris: International Union of Railways; 2019. 52 p.