This study was undertaken to update the National Roads Board Economic Appraisal Manual (1986), which was superceded by Transit New Zealand's Project Evaluation Manual (1991). The updating includes a review of sensitivity analysis procedures carried out in 1991.
Transit New Zealand is seeking to establish appropriate guidelines for the variation of estimated construction cost values to be used in sensitivity testing within project evaluation. To do this, a survey of Works Consultancy Services personnel with experience in roading work for Transit New Zealand was made to seek their opinion of appropriate ranges above and below estimated expected values by which final construction costs could vary.
Ranges of values were requested for three stages of project cost estimates:
Each of these was subdivided into two project types: well-known no clear preference, and less well-known. They were then re-analysed, taking account of the range of values given by respondents for each specific project type. The list of projects falling into each category is also presented.
Keywords: Capital costs, estimates, economics