Appraisal period reviewed

Appraisal

The DfT is to consult on what should be the appropriate length of appraisal period for all types of transport scheme.  

It currently recommends an appraisal period of 60 years from the scheme opening year for projects expected to have indefinite lives. “In practice there is a large degree of challenge to appraising over a long time horizon,” the DfT acknowledges. “Long-term uncertainty in both demand (how people travel) and supply (how the transport system will look) are considerable and has practical implications for modelling and forecasting.” 

Discount rates in the Treasury’s Green Book mean benefits in the very long-term are substantially discounted. “Nonetheless, we accept that conceptually there are reasonable arguments for looking at the issue of value in the very long-term, for example residual asset values, given that many transport systems are maintained and renewed in such a way to be operational for a significant amount of time,” says the DfT.