1. Start with the Problem, Not the Project



Every serious feasibility study begins with a simple but often overlooked idea: in transport planning, we do not evaluate projects — we evaluate problems.

The temptation to fall in love with a solution too early is remarkably common. Cities often proclaim that they “need a tram”, “must widen the ring road”, or “should build a new interchange” long before anyone has clearly articulated what is actually going wrong in the mobility system.

A proper diagnosis requires understanding why the system is failing and where the bottlenecks truly are. Is the issue recurring congestion on access roads? Unpredictable travel times in key corridors? A lack of reliable and sustainable alternatives in certain neighbourhoods? Poor access to jobs, education or healthcare? Safety problems on specific links? Overcrowding on a bus or rail line? Weak connectivity between peripheral districts?

Each of these symptoms may stem from completely different causes — and therefore require very different solutions.

When the problem is vaguely defined, misunderstood, or simply assumed, cities often repeat the same mistakes: oversized infrastructure that doesn’t match real demand, investments that produce little benefit for users, interventions that treat symptoms without addressing root causes, or expenses that generate more issues in the long run.

A rigorous diagnosis clarifies whether the appropriate response is to build new infrastructure, upgrade what already exists, reinforce maintenance, improve operations, or rethink the entire service model. Without this clarity, even the most ambitious project risks solving the wrong problem — or solving none at all.

2. Define Clear and Measurable Objectives

Once the problem is understood, the next step is to convert it into concrete, measurable objectives. Without clear goals, any intervention — no matter how well intentioned — becomes a set of actions without direction or a way to assess success.

Objectives must answer a few straightforward questions: What exactly needs to change? By how much? For whom? And in what timeframe?

Saying “we want to improve mobility” is not enough. Such phrases can mean very different things to different stakeholders. A well-defined objective must be quantifiable. For example:

• Reduce peak-hour travel times by 20% in a specific corridor.
• Increase public transport mode share to 35% in the study area.
• Cut mobility-related emissions by 30% in a defined zone.
• Ensure that most residents can reach key education or health facilities within a 500-metre walk.

Clear objectives perform two critical functions. First, they provide a benchmark to judge whether the intervention ultimately delivers what it promised. Second, they guide the selection of alternatives. If the objective is to improve walkability and urban access, the solution probably does not involve major road-building but rather improvements to the pedestrian network, crossings, and public space. If the objective is to increase capacity on an overloaded corridor, operational enhancements alone may not be enough — and new infrastructure or a redesigned service model may be required.



Objectives form the bridge between problem diagnosis and solution design. Without them, it becomes impossible to assess whether an investment is justified or whether public resources are being used wisely.

3. Compare Alternatives — Including the “Do Nothing” Scenario

Once objectives are established, the next step is often the most misunderstood by non-specialists: comparing multiple alternatives, including the option of doing nothing.

International guidelines on public investment are explicit: no project should be evaluated in isolation. At minimum, a feasibility study must examine several options, including the reference scenario — the state of the system if no intervention is made. This baseline is not intended to promote inaction, but to provide a benchmark for measuring real impact.

From there, alternatives typically fall into three broad families:

Low-cost, operational or management-based strategies

These may involve traffic reorganisation, signal optimisation, bus-priority measures, parking management, or redesign of public transport routes. Well-designed, such measures can deliver significant improvements with limited investment.

Medium-investment solutions

These include reserved bus lanes, Bus Rapid Transit (BRT) systems, new bus lines, rail service enhancements, upgraded stations, or expanded interchanges. They often offer a strong cost–benefit balance for cities seeking meaningful improvements without major works.

High-investment infrastructure options

When objectives require a structural transformation of the mobility system, heavier interventions are evaluated: tramways, tunnels, grade separations, segregated corridors, or entire new rail lines. What matters is not the prestige of the solution, but its alignment with the problem being solved.



All alternatives must be evaluated using consistent criteria — capacity, costs, benefits, environmental impact, risks, and alignment with objectives. Decisions should not be guided by aesthetics, political momentum, or institutional habit, but by evidence: which option delivers the greatest benefit for the lowest cost and risk?

In many situations, a smart operational upgrade is enough to address the underlying problem. In others, only a major infrastructural investment can meet future demand. The key is rigorous comparison, with no preselected “favourite” solution.

4. Economic Feasibility: Understanding Costs, Funding, and Financial Sustainability

After comparing alternatives, the next step is to assess the investment from a strictly economic and financial point of view. At this stage, the focus is not yet on the broader social or environmental benefits, but on answering a more immediate question: How much will each option cost to build, operate, and maintain — and how will it be paid for?

The analysis begins with capital expenditure. This includes everything required to deliver the project: civil works, systems, rolling stock, stations, signalling, power supply, and any associated urban improvements. In rail projects, for example, the cost of track geometry, electrification, interlockings, and integration measures can multiply the complexity — and the budget.

Next come the operating and maintenance costs over the life of the project. These often exceed the initial investment when viewed over 30 or 40 years. Staffing, energy, cleaning, inspections, security, asset renewals, repairs and maintenance — these recurring expenses determine whether a solution remains viable in the long term. Ignoring them has led many cities into operational deficits that were perfectly avoidable.

Some projects generate direct revenue, such as fares or user fees. However, most public transport systems worldwide operate with a structural deficit: farebox revenue typically covers only part of the operating cost and rarely contributes meaningfully to capital repayment. This does not make them unjustifiable — but it shapes financing strategy.

The economic analysis evaluates the funding structure, whether through public budgets, loans, EU funds, public–private partnerships, concessions, or hybrid mechanisms. It also incorporates the residual value of assets at the end of the evaluation period — often substantial for rail infrastructure and vehicles.

To integrate all these elements coherently, feasibility studies rely on discounted cash flow analysis (DCF), which brings future costs and revenues to present value. Financial indicators such as Net Present Value (NPV), Internal Rate of Return (IRR) and debt coverage ratios help determine whether the project is financially sustainable.



A crucial point remains: a project can be financially unprofitable yet socially essential. Most metro lines, tram systems and urban bus networks would never exist if judged solely by financial return. Their justification lies elsewhere — in the benefits they generate for society.

5. Socio-Economic Appraisal: Measuring What Society Gains

If the economic assessment explains how the project performs for the operator or the public budget, the socio-economic analysis explains whether the project makes sense for society as a whole. This is the core of modern feasibility studies — the point at which a project’s true value becomes visible.

Socio-economic appraisal asks a simple but powerful question:

Do the benefits to society outweigh the costs of the investment?

These benefits extend far beyond financial revenue. They include:

• Travel time savings, often the single largest component of societal benefit. Time has economic and personal value; reducing it improves productivity, access, and quality of life.
• Fewer accidents and improved road safety, with measurable human and economic impacts.
• Lower emissions of pollutants and greenhouse gases, improving health and supporting climate commitments.
• Reduced noise and better urban environments, especially in dense areas.
• Improved accessibility to jobs, education, healthcare and essential services, particularly for vulnerable populations.
• Lower user costs, such as reduced fuel consumption or vehicle maintenance.
• Territorial cohesion, urban regeneration, and support for balanced economic development.

These benefits are monetised using established methods and compared with the full life-cycle costs of the project. The standard indicators are:

• Economic Net Present Value (ENPV) – the net benefit to society.
• Economic Internal Rate of Return (ERR) – the project’s “social profitability”.
• Benefit–Cost Ratio (B/C) – how many euros of benefit are generated per euro invested.



The rule of thumb is straightforward: a project with B/C > 1 and a positive ENPV is generally considered socially desirable. If the ERR exceeds the social discount rate used in the country, the project is even more compelling.

But all of this rests on a critical foundation: credible forecasts of future demand.

6. Demand Forecasting: The Most Delicate and Determinant Step

Financial and socio-economic results are only as reliable as the data that underpin them — and no variable is more influential, or more uncertain, than future demand.

Demand forecasting is not about predicting the future with perfect accuracy; it is about building a robust, evidence-based representation of how people are likely to move given changes in the system. To do this, modern studies combine three pillars: modelling, socio-economic projections, and real-world data.

Transport Modelling

Transport models simulate how travellers and traffic react to changes in infrastructure or service.

• Macroscopic models, built in platforms like PTV Visum or TransCAD, describe the whole network in aggregate terms and are used to estimate flows, assign traffic, analyse corridor performance, or evaluate new public transport services.
• Agent-based models, increasingly used in advanced studies, represent individual households and their daily activity patterns, making it possible to analyse teleworking, behavioural shifts, and sensitivity to qualitative factors such as comfort, reliability, frequency, or perceived safety.

Socio-economic Projections

Demand depends not just on transport supply but on the evolution of the territory. Projections of population, income, demographic structure, land-use development, motorisation rates, and economic activity shape long-term mobility patterns. Without these projections, demand forecasts risk being purely theoretical.

High-quality Real Data

In recent years, data availability has transformed mobility analysis.

In Spain, anonymised mobile-phone datasets produced by the Ministry of Transport and Sustainable Mobility now allow analysts to reconstruct millions of actual trips, build hourly origin–destination matrices, study seasonal mobility patterns, and detect structural trends with unprecedented accuracy.

Other valuable sources include:

• open traffic counts and road sensors
• public transport passenger counts and occupancy data
• automated cyclist counters
• pedestrian sensors
• travel-time datasets from connected vehicles (TomTom, Here, INRIX)
• movement data derived from smartphone apps (Google, Apple)

This shift toward continuous, empirical observation has significantly reduced reliance on purely declarative surveys, which are more prone to bias and recall errors. Surveys still matter for understanding motivations, barriers, and perceived quality — but they no longer need to carry the entire analytical weight.

Scenario-Based Forecasting

Given how sensitive results are to demand assumptions, robust studies always test multiple scenarios — high, medium, and low — making explicit all underlying assumptions and allowing for independent review.

Only with solid modelling, credible socio-economic projections and real-world data can a feasibility study produce demand forecasts that genuinely support decision-making.

7. Sensitivity Analysis, Risk Assessment, and Testing the Robustness of Alternatives

Even when demand forecasts are sound and cost estimates are solid, no feasibility study is complete without examining uncertainty. Real life never follows the “central scenario” exactly. Sensitivity and risk analysis provide the tools to understand how resilient each alternative is when the future unfolds differently than expected.

Sensitivity Analysis

Sensitivity analysis varies key assumptions one at a time to observe how much results shift. Analysts typically test what happens if:

• demand is 10–20% lower than forecast
• construction costs rise above estimates
• operating costs grow faster than inflation
• the value of travel time savings changes
• demographic or economic growth slows

A project that only works under optimistic assumptions is exposed immediately. Conversely, if an alternative remains viable under reasonable variations of inputs, it is likely to be robust.

Risk Assessment

Where sensitivity analysis tests numerical assumptions, risk assessment examines the nature of uncertainties themselves. It identifies what could go wrong, how likely each risk is, and what its potential impact might be. Common risks include:

• Construction risks: cost overruns, delays, unexpected geological conditions, conflicts with utilities or land acquisition issues.
• Operational risks: higher-than-expected operating costs, lower reliability, premature asset degradation.
• Demand risks: behavioural shifts, competing mobility services, economic downturns, structural changes in travel patterns (e.g., teleworking).
• Regulatory and governance risks: policy changes, institutional capacity constraints, procurement delays.
• Environmental and territorial risks: unforeseen impacts on ecosystems, local opposition, limitations in protected areas.

For each risk, mitigation strategies are defined — from phased implementation and contingency budgeting to alternative designs and governance improvements.



This combined approach ensures that decision-makers understand not only the expected performance of each alternative, but also its vulnerability.

8. Environmental and Sustainability Considerations

Today, evaluating a transport project without examining its environmental implications is unthinkable. Sustainability is no longer a complementary chapter — it is a central axis of decision-making.

Transport is a major contributor to greenhouse gas emissions, air pollution, noise, and land consumption. Any feasibility study must therefore assess how each alternative affects climate objectives, environmental quality, and long-term resource use.

Climate and Emissions

Projects are analysed for their potential to:

• reduce CO₂ and pollutant emissions
• shift travel from private cars to cleaner modes
• support electrification and energy efficiency
• discourage unnecessary vehicle traffic

A project that increases car dependency, even if it improves mobility in the short term, may conflict with broader climate commitments.

Ecosystems and Land Use

Infrastructure can have significant ecological impacts. Studies must evaluate:

• disturbance of protected areas
• habitat fragmentation
• hydrological and geotechnical impacts
• occupation of agricultural or natural land

In some cases, environmental constraints can rule out entire corridors or require substantial redesign.

Urban Space and Public Realm

In urban settings, the key question is how the project reshapes public space. A technically sound solution may still degrade the pedestrian environment, reduce urban permeability, or consume excessive space. Feasibility studies assess:

• continuity of walking and cycling routes
• integration with existing urban form
• noise and heat island effects
• visual and landscape quality

Resilience

Sustainable projects must also be resilient — able to withstand extreme heat, flooding, erosion, sea-level rise, or other climate risks. A project that cannot cope with future climate conditions risks higher maintenance costs, service interruptions, or even premature obsolescence.

Life-Cycle Perspective

Environmental appraisal now incorporates the full life cycle: construction materials, embedded energy, operational energy use, maintenance emissions, asset renewal, and end-of-life processes.



A project may be socially beneficial in accessibility terms but environmentally unacceptable — or vice versa. Sustainability is therefore not a decorative element but a decisive criterion in comparing alternatives.

9. From Analysis to Decision: Cost–Benefit, Multicriteria Assessment, and Choosing the Best Option

After diagnosing the problem, setting objectives, comparing alternatives, analysing costs and benefits, forecasting demand, evaluating risks, and assessing sustainability, the process reaches its most critical stage: decision-making.

No project should be approved on intuition, habit, or political impulse alone. Decisions must be anchored in transparent, evidence-based evaluation.

Cost–Benefit Analysis (CBA)

CBA monetises all quantified costs and benefits and produces indicators such as:

• Economic Net Present Value (ENPV)
• Economic Internal Rate of Return (ERR)
• Benefit–Cost Ratio (B/C)

When benefits clearly exceed costs and the ERR surpasses the social discount rate, the project is generally considered economically justified.

Why CBA Is Not Enough

Some impacts are notoriously difficult — or inappropriate — to express in euros:
urban integration, landscape value, social equity, acceptance by residents, ease of implementation, or the system’s future adaptability. In many cases, forcing monetisation introduces distortions or false precision.

Multicriteria Analysis (MCA)

MCA complements CBA by evaluating alternatives against a broader set of qualitative and quantitative criteria, weighted according to policy priorities. This allows decision-makers to incorporate factors that matter but resist monetisation.

The Final Verdict

The final decision typically synthesises:

• the quantitative results of CBA
• the robustness shown in sensitivity and risk analyses
• the relative performance in MCA
• alignment with mobility, spatial, environmental, and climate objectives
• financial and institutional feasibility
• and, above all, the fit between the chosen alternative and the original problem

Transport investments shape cities for decades. A rigorous feasibility study — transparent, data-driven, open to alternatives, and methodologically robust — cannot guarantee perfection, but it dramatically reduces the likelihood of costly mistakes and helps direct public investment toward solutions that truly improve mobility and quality of life.

At the heart of it all lies the principle that opened this article:

we do not evaluate projects; we evaluate problems.

Once the problem is understood, the right solution follows from evidence — not intuition.

References

European Commission, Directorate-General for Regional and Urban Policy. (2014). Guide to cost-benefit analysis of investment projects: Economic appraisal tool for Cohesion Policy 2014–2020. Publications Office of the European Union. https://doi.org/10.2776/97516