Revising risk and revenue

Are risks associated with longer-term revenue really trivial? Traffic forecasting reports typically lack transparency in this regard, says infrastructure investment analyst Rob Bain, and suggests that forecasting consultants need to raise their game by explaining what they did, when they did it – and why

Rob Bain

15 May 2015

Robert Bain runs RBconsult and is a Visiting Research Fellow at the University of Leeds (see www.robbain.com for more information) This article was first published in Infrastructure Investor magazine.

When gauging long-term toll road performance, traffic forecasting consultants' forecasts can be arbitrary, inconsistent, frequently opaque and often without justification, and yet are potentially important when it comes to asset valuation. This is what I found when, in response to a seemingly innocuous question regarding the common industry practice of ‘dampening’ longer-term traffic forecasts (attenuating growth in the outer years), I recently examined the subject in some...