Subdimensions of economic effectiveness include the impacts on transport system efficiency, differentiated by who perceives them people or businesses on quality and reliability of transport, the fiscal burden on the government, and wider economic benefits on urban economies of scale, rural development, and cross-border transport.
The rating scale for the economic effectiveness core criterion and the associated qualitative measures are as follows:
| Score | Descriptor | Measure |
|---|---|---|
| 3 | Highly economically effective | There will be major positive economic impacts; economic rate of return significantly exceeds established benchmarks |
| 2 | Economically effective | There will be strongly positive economic impacts; economic rate of return is above established benchmarks |
| 1 | Moderately economically effective | There will be moderately positive economic impacts; some scope for improvement in economic rate of return |
| 0 | Marginally economically effective | No significant economic impacts; economic rate of return is likely to be below benchmarks |
| -1 | Moderately economically ineffective | Economic rate of return is well below benchmarks |
| -2 | Economically ineffective | Money wasted; similar results could have been obtained with much smaller costs |
| -3 | Highly economically ineffective | White elephant |
The economic effectiveness rating (and subcriteria ratings) should reflect the efficiency in which economic resources are used to deliver these outcomes, primarily measured by the economic internal rate of return (EIRR) of the project. Put differently, a project with a low EIRR should only get a high economic effectiveness rating if there are large economic benefits that cannot be quantified. The following benchmarks for economic efficiency are used commonly by ADB:
| Descriptor | Measure |
|---|---|
| Highly efficient | EIRR >18% or Benefit/Cost>2, and/or best practice standards for costs/demand exceeded |
| Efficient | EIRR >12%, and/or best practice standards for costs/demand met |
| Moderately efficient | EIRR between 10% and 12%, and/or somewhat below best practice standards for costs/demand |
| Less efficient | EIRR likely to be below but close to 10%, or below best practice standards for costs/demand |
| Inefficient | EIRR likely to be well below 10%, or well below best practice standards for costs/demand; project cannot be approved by ADB |
OVERALL ECONOMIC EFFECTIVENESS RATING
The construction, maintenance, and operation of transport systems makes significant demands on land, material, energy, and water resources and can be a major source of emissions, pollution, and environmental degradation. Resilience of transport infrastructure to the long-term risks from climate change is also of increasing concern. Transport projects have a range of adverse and beneficial effects. With integrated planning and design and good practice during construction and operation, the environmental sustainability of projects can be significantly improved.
Environmental outcomes of the project will be measured in terms of contribution to emission loads (greenhouse gases, pollutants, noise, and light), impacts on the natural and built environment, and resilience to climate change.
The rating scale for the environmental sustainability core criterion and the associated qualitative measures are as follows:
| Score | Descriptor | Meaning |
|---|---|---|
| 3 | Highly environmentally sustainable | Environmental impacts are expected to be very strongly positive. |
| 2 | Environmentally sustainable | Environmental impacts are expected to be strong and positive; any negative impacts are expected to be minor. |
| 1 | Moderately environmentally | Environmental impacts are expected to be moderately positive or partly offset by negative impacts. |
| 0 | Neutral/Marginally environmentally sustainable | There will not be any significant environmental impact, or a mix of minor positive and minor negative impacts result in a negligible impact. |
| -1 | Moderately environmentally sustainable | Environmental impacts are expected to be moderately negative, or positive impacts are offset by slightly more negative impacts. |
| -2 | Environmentally unsustainable | There will be some strongly negative environmental impacts. |
| -3 | Highly environmentally unsustainable | There will be some very strongly negative environmental impacts or multiple strongly negative ones. |
The rater should use his or her judgment to derive the environmental sustainability rating. A narrative description should be provided to substantiate the judgment. No mandatory weighting between subcriteria is recommended.
OVERALL ENVIRONMENTAL SUSTAINABILITY RATING
When rating risk to sustainability, the following should be taken into account:
- Design and evaluation risks: risk of cost overruns, of inferior demand, of having less-thanexpected positive impacts, or more-than-expected negative impacts, because of the limited quality of the data and studies that substantiate the evaluation or because of external economic, social, environmental, or political risks
- Implementation risks: risks that the project is delayed, cancelled, or fails to perform because of weak contractor performance, nonavailability of counterpart financing, poor project management capacity, or limited local acceptability
- Operational sustainability risks: risks that the projects level of service is not sustained at the expected level because of inferior financial sustainability, lack of adequate maintenance, poor governance/corruption, or other limited institutional capacity risks.
When assessing design, implementation, and operation risks, the evaluator should first consider how those risks have affected projects of a similar nature in the past. Unless new specific mitigation measures are taken, it is prudent to consider that those risks will remain.
Mitigation measures included in the project or program may reduce those risks. Positive impacts of institutional strengthening activities at the sector level may also count as positive impacts, which reduce the overall risk level.
The rating scale for the risk to sustainability core criterion, and the associated qualitative measures are as follows. It follows a 4-point scale, as low, medium, high with mitigation, and high. While these are qualitatively determined, the following benchmarks may apply: In a category with a high risk rating, an event that has a moderate chance of occurrence may change the value of costs or benefits by more than 20% or lead to delay of more than 1 year. A medium risk rating may imply a 10% to 20% range, or a delay of 3 to 12 months. A low risk rating implies a range below 10% or a delay of less than 3 months.
| Score | Descriptor | Measure |
|---|---|---|
| 1 | Low | Residual risks are low; there are moderate chances that they happen and their consequence would remain minor, or there are minor chances that they happen and their consequence would remain moderate. |
| 0 | Medium | Residual risks are moderate; the chances that they happen and their consequences are moderate; any risk that would have a severe consequence has rare chances of occurring. |
| -1 | High with mitigation | Residual risks are high; there are significant chances that some risk with a severe consequence occurs; appropriate mitigation measures are in place. |
| -2 | High | Risks are high and are or cannot be mitigated. |
OVERALL RISK to the PROJECT RATING
Economic Effectiveness
Social Sustainability
Environment Sustainability
Risk to Sustainability
OVERALL RATING
| ECONOMIC RATING | 0.0 | |
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Social impacts of transport projects can be measured in terms of their impact on basic accessibility, employment, affordability, inclusion, social cohesion, and safety and security. These impacts are particularly important to measure in the way they affect vulnerable groups whereby vulnerabilities can arise on grounds of age, income, gender, race, religion, and disability.
The rating scale for the social inclusion core criterion and the associated qualitative measures are as follows:The rater should use judgment to derive the social sustainability rating. A narrative description should be provided to substantiate the judgment. No mandatory weighting between subcriteria is recommended.
OVERALL SOCIAL INCLUSIVENESS RATING