Project Name: REVIEW OF THE METHODOLOGY APPLIED TO ECONOMIC (SOCIOECONOMIC) AND FINANCIAL (ECONOMIC-FINANCIAL) FEASIBILITY STUDIES WITHIN THE SCOPE OF ADVISORY, ANALYSIS, VALIDATION, VERIFICATION, AND SUPPORT FOR THE APPROVAL OF FUNCTIONAL DESIGNS FOR NEW LINES OF THE SUBWAY NETWORK Year: 03/2014 – 03/2018
Location: São Paulo/SP Client: Companhia do Metropolitano de São Paulo – METRÔ
Main project features:
Activities performed:
- Survey of existing methodologies within the context of CMSP and RMSP, including formulas, parameters, indicators, and line items, particularly regarding socioeconomic benefits and investments;
- Survey of existing methodologies used in other institutions, including formulas, parameters, indicators, and line items, particularly regarding socioeconomic benefits and investments;
- Identification of new elements to be incorporated into the economic and financial feasibility methodology for rail transit network projects, including the survey of elements, formulas, parameters, cost and benefit line items, as well as the methodological framework for these new cost/benefit items;
- Identification of elements, formulas, parameters, cost and benefit line items, as well as the methodological construction itself, eligible for enhancement and revision within CMSP’s current methodology;
- Assessment of demand and indicators used in feasibility studies, proposing adjustments to the method, including ready-to-use calculation spreadsheets;
- Considerations regarding the calculation method for investments in new transport projects: including method description, definition of concepts, definition of shadow and market prices, investment sensitivity analysis, and calculation of switching values. All considerations supported the assembly of a ready-to-use Excel spreadsheet;
- New proposals for cost-benefit analysis: inclusion of new benefits and consideration of transport and traffic parameters throughout the project’s lifespan, accounting for cost calculations at both shadow prices and market prices;
- Analysis and recommendation of a methodology for sensitivity analysis of costs and benefits in relation to IRR, NPV, Benefit/Cost ratio, and payback period due to estimation and calculation errors, as well as switching values for the value of time;
- Consolidation of the proposed methodology into a reference guide to serve as a standard procedure for CMSP, along with ready-to-use electronic spreadsheets;
- Comparison between the current methodology and the proposed methodology;
- Definition and identification of elements for the financial analysis of costs and revenues, covering funding sources, direct project cash flows, and a decision matrix for the interrelationship of evaluations;
- Definition and identification of operational revenue evolution and the split among participants in the fare revenue clearinghouses, including balance analysis of the clearinghouses considering the current situation and the new rail transit network;
- Consolidation of the review and refinement of the economic and financial feasibility methodology for projects through its application to case studies selected in conjunction with DM/GPI (currently GPA).