Define the recipient
Start with separate columns for the public economic case and the operator’s cash flows. Shorter journeys, changes in accident risk and environmental effects may matter to society even when no cash reaches the operator. The operator, meanwhile, must pay contractors, fund maintenance and service financing under the concession. A toll received by one party and paid by another cannot simply be added to time savings as a new social benefit without examining the appraisal boundary.
Match prices and rates
For a small diagnostic, assume a single payment worth €100 in today’s purchasing power falls five years from now. At an illustrative real discount rate of 3%, it is worth approximately €86.26 today. Under assumed inflation of 2% each year, the nominal payment becomes €110.41 and the consistent nominal discount rate is 5.06%, giving the same present value. These illustrative rates are not prescribed public rates or estimates of a project’s cost of capital. Tariff indexation can differ from general inflation.
Stress the delivery timetable
Move the opening date back by a year. Establish which expenses have already been committed, whether users’ benefits and toll receipts are postponed, and whether the concession end date extends. A fixed end date can remove a full year of net receipts, not merely defer them. Keep financing constraints and economic value in separate outputs; a project may qualify on one measure and remain unaffordable on another.
Practical check
Label every discounted result with its beneficiary, price year, currency and cash-flow timing; model a delayed opening before comparing projects.