CBA of Mega projects: some teachings from

the MOSE project

Jérôme Massiani: Università Ca’ Foscari Venezia

I. Introduction: high tides and MOSE project II. Extrinsic limitations III. Intrinsic limitations

Summary

Acqua Alta

V e n e z i a a l t i m e t r i a C o m u n e d i V e n e z i a

I s t i tuz ion e cen t ro prev is ion i e segna la z ion i ma ree

I n co l la bora z ion e con I nsu la spa

a cura d i Leona rdo B oa to , Pa o lo Ca nest re l l i , Lu isa Fa cch in e Rudj Toda ro a gg io rna mento 2009 A l t imet r ia I nsu la

Various levels of Acqua Alta

Mobi le gates + Local defences

MOSE : principle

A set of interventions

Opere mobili

Difese locali

Interventi diffusi

Fonte : Nostra elaborazione su base Comune di Venezia p/162

• Opening of the fish farms,*

• Reduction of water depth -10, -12, -8 at the inlets LMC*

• Reconstruction of velme, barene e dossi*

• Closing of the straight section of the Malamocco Marghera canal and reopening of the Fiesolo canal

• Changes in the orientation of the external dikes in the inlets.

Comune di Venezia 1998, p.II 168

110 cm

I. Introduction: high tides and MOSE project II. Extrinsic limitations III. Intrinsic limitations

Summary

limits

CBA made by promoter Lack of publicity

warranties

External experts Scrutinized by Colleggio internazionale Commissione del commune di

Venezia Ministero Tribunali

The search for an independent evaluation

Anchoring bias

Institutionally : yes General public : ?

CBA legitimized ???

CBA outcome (mrd Lire 1998)

I. Introduction II. Extrinsic limitations III.Intrinsic limitations

I. Introduction II. Extrinsic limitations III.Intrinsic limitations General modelling approach Some visible limitations “Conventional” and “banalist” use of CBA Defocalisation

Summary

2 - Impact on mobility 3 - Damages to stored goods

Discretisation

Discretisation 1 - Sea rise

1 – Natura non fecit saltum 2 – Arbitrarietà 3 – Fuorviante

Dose response function

I. Introduction II. Extrinsic limitations III.Intrinsic limitations General modelling approach Some visible limitations “Conventional” and “banalist” use of CBA Defocalisation

Summary

Costs for harbour activity Costs for reduced touristic

incomes Tourist Fontini et al 2010 AA > 120 cm reduces presence of tourists

in Venice by 3516 units. (t=1,68 R2 = 0,58, months used as controls)

Cost of damages to ZIC

Some items missing

Scenario definition

Opere mobili

Difese locali

Interventi diffusi

“Situazione attuale”

(p. 162) o

“opzione 0”: “solo interventi in corso”

(p. 165)

Fonte : Nostra elaborazione su base Comune di Venezia p.162 e 168

Dovrebbero essere nello sc. di riferimento

Vs.

Definizione of alternative scenarios

Opere mobili

Difese locali

Interventi diffusi

Opere mobili

Paratoie a spinta di

galeggiamento

Paratoie a gravità

Barriere mobile gonfiabili

Navi porta, mezzi auto affondanti

Barriere mobile a spinta

meccanica

Nagasaki e Ramspol (NL)

Failure or catastrophe (Jonkmann, et al. 2004) NL : evaluation incl. probability of dike failure

Discrete representation of uncertainty Limits technical possibilities of analysis

Risk and uncertainty

I. Introduction II. Extrinsic limitations III.Intrinsic limitations General modelling approach Some visible limitations “Conventional” and “banalist” use of CBA Defocalisation

Summary

GE vs. PE Modern CBA (Drèze and Stern) neglected Arbitrary set of markets

No known definition of “standing”

Old fashioned view of actualisation

“Conventional”, “banalist” use of CBA

I. Introduction II. Extrinsic limitations III.Intrinsic limitations General modelling approach Some visible limitations “Conventional” and “banalist” use of CBA Defocalisation

Summary

Quotidianism Concentrates on tangible Damage to stored goods

No evaluation of environmental externalities Compensation measures

Close to direct users experience Maintenance costs Mobility hindrances Other techniques neglected : hedonic pricing

Defocalisation …

Defocalisation

Risul tat i provvisor i

Rilevanza valutativa (miliardi €) e sforzo analitico

0

1

2

3

4

5

6

costructioncosts

lagoonshoreline

low waterafter

flooding

saltaggression

drainagesystems

short termcosts

(singleevent

related)

min interm. max

Num. pp.

Mld €

Cost ingenuity pseudo neutralism

F. Decarolis e G. Palumbo

Correction factors for costs

Source: Flyvbjerg, Bent & COWI (2004), “Procedures for dealing with Optimism Bias in Transport Planning: Guidance Document”, The British Department for Transport, London, June 2004.

Cost overruns Risk Analysis in Transporta t ion Infrastructure Investments

Berechman e Wu 2006

F. Decarol is e G. Palumbo

La rinegoziazione dei contratti di lavori pubblici: un’analisi teorica e empirica,

I. Introduction II. Extrinsic limitations III. Intrinsic limitations

General modelling approach Some visible limitations “Conventional” and “banalist” use of CBA Defocalisation

IV. Conclusion

Summary

Quotidianism E. Weil

Use of “conventional” approach Risk and uncertainty Pseudo neutralism of cost ingenuity main cause of

distortion

Conclusions for transport economics

Thank you for your attention