Why Are Inferior Transportation Investment Projects Selected?
This book has examined a significant number of methods and techniques to be used in project assessment and selection. As Chapter 6 (Appendix C) has shown, many countries employ these and similar analytical tools for transportation project evaluation. Yet, all too often, projects that rank very low or even fail COBA tests are nonetheless implemented. A legitimate question to be asked in such circumstances is why decision makers implement projects that had been judged unworthy or inferior in the evaluation process that they themselves may have initiated? We define “inferior projects” as those that do not pass common benefit-cost analysis tests or obtain very low scores on comparative scoring tests (see Chapter 14). When applying a financial criterion, inferior projects are those whose alternatives can be clearly shown to yield higher rates of return. This chapter is therefore devoted to responding to the issue of inferior project selection as well as the policy implications of such tendencies for actual project assessment and selection.