Road Network Operations
& Intelligent Transport Systems
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Appraisal of ITS Projects

What ITS is able to do is related in a systematic way to the problem or opportunity to be addressed. The forerunners to ITS – computer-controlled traffic systems – were built to a definitive design specified by the client. A technical evaluation of the available products, possibly with a field trial and performance assessment would be undertaken before going ahead with the full investment.

In today’s world the systems are more complex. Close attention is needed to user requirements and the development of a detailed functional specification - what will the ITS do? (See Why Create One?)

In practice the separate, often parallel, streams of technical performance and impact assessment feed into a practical choice – whether to use an ITS solution, a different solution, or do nothing. The detailed technical specification is often left to the contractor to develop, based on cost and performance criteria. (See Appraisal and Evaluation of Managed Motorways Technologies)

In these circumstances politicians, planners, budget controllers and other decision-makers need to be fully informed about the benefits and costs of ITS so they can judge whether the investment in ITS is worthwhile:

  • a well-planned, systematic appraisal will help to demonstrate where ITS will deliver value for money and measurable benefits
  • structured evaluation of the options gives confidence that what is being planned is sensible – and that there are clear reasons for delivering the scheme

In order to answer the question ‘Shall we proceed with an investment in ITS?’ – the potential impacts of the proposed ITS project will have to be set against the costs of procurement, system build, maintenance and operations. There are always choices to be made, so it is important to consider the relative merits and costs of the different options. This requires a systematic approach and careful judgement, including political judgement. In addition to an economic appraisal there will need to be an assessment of technical and operational performance. The following stages provide a general framework for the appraisal:

  • review the project objectives (understand what the ITS investment must achieve)
  • identify analytical tools (See Appraisal Methodology)
  • prepare a shortlist of possible solutions – which will require both a technical and an operational performance assessment, as shown in the flow-chart below
  • consider non-technical variables (economic, institutional, operational) (See Building ITS Capacity)
  • develop a refined list of solutions - and their efficacy (See Selection of Projects)
  • present options and recommendations to decision-makers

Flowchart for appraisal of ITS projects (© PIARC)

Project appraisal is a key part of the ITS deployment process. It is not an optional add-on, nor is it a pass/fail “test”. Its purpose is to ensure that the systems deployed are the most appropriate ones – and to ensure that investment is targeted towards areas and applications that will bring the most benefits.

Choice of Appraisal Methods

The appraisal methods used in any one country usually follow a consistent framework adopted by the authority responsible for investment in transport infrastructure. Examples of such appraisal frameworks are referenced under “Further Information” and include the:

  • UK Department for Transport’s Transport analysis guidance
  • Netherlands OEI (Overview Effects Infrastructure) – based on social cost benefit analysis
  • American Association of State Highway and Transportation Officials ‘Red Book’ User and Non-User Benefit Analysis for Highways

The use of a consistent method of appraisal can help ensure that the choices made by decision-makers meet their objectives of providing a sustainable transport network – and that value for money has been achieved and that ITS options have been considered on an equal footing with more capital intensive infrastructure schemes. A well conducted economic appraisal, accompanied by a thorough financial appraisal will ensure that decision-makers understand all of the effects of the ITS application – and that the risk of any unexpected outcomes is minimised (See Finance and Contracts)

Decision Criteria

The process of cost benefit analysis is a comparative one in which the proposed ITS application is compared with what the transport network would be like in absence of such an initiative. This is often defined as the reference case or the ‘do-minimum’ alternative.

In many cases, several options will be appraised so that the decision-maker can make a better informed choice about the option that maximises the net benefits.

In most countries, the ratio of discounted benefits to discounted costs is used to inform decision-makers about priorities – since the use of this technique is to allocate a pre-determined budget to the most beneficial schemes. Not all benefits of a scheme can be measured in money terms and be included in the benefit to cost ratio. In many countries decision-makers retain some discretion about the ranking of priorities to take account of impacts which cannot easily be included in the benefit to cost ratio. (See Weighing Costs and Benefits)

Useful indicators

The critical task in project appraisal is to decide what is important. The answer to “what measure of success do I use?” begs the question “what were you trying to achieve?”

ITS investments, like any other, should be planned to contribute towards resolving a problem – or delivering a vision. The measure of success is how far the problem is resolved or the vision delivered, within the available budget.

ITS can contribute to a variety of objectives:

  • maximise use of existing networks
  • reduce operational costs
  • improve efficiency and safety
  • help protect and enhance the environment
  • postpone investment in new capacity
  • reduce the amount of new capacity that needs to be added
  • reallocate space to prime users at different times of day or year
  • help shift people from traditional car use to less intrusive modes
  • make public transport easier to use
  • make public transport more reliable (and be perceived as more reliable – which encourages people to switch to public transport)
  • improve end-users’ satisfaction

The table below will help decide the criteria on which to focus attention.

Goal Area


Critical Factors for Socio-economic Appraisal (© PIARC)



Serious injuries and fatalities


Vehicle throughput

Travel time savings

Journey time reliability

Cost savings

Mobility / Social Inclusion

Accessibility to services and opportunities


Inter-modal connections

Energy and the Environment


Fuel consumption

Noise levels

Customer satisfaction is the bottom line


The “Political” Perspective

ITS can be adapted to serve widely different policy objectives, given the diversity of possible responses to users and their needs. Politicians generally wish to be pro-active, and will be happy to support ITS provided there is a strong case for investment and it is perceived as delivering value. This “political” perspective may appear to be another burden on transport professionals – but in practice, political aspects have always been there.

The five tests below represent a way of formalising political considerations – and are a good indication of whether or not the ITS proposed is a good investment for the decision-maker (taking into account the perspectives of the public, media and local politicians). The scheme should be, and be seen to be:

  • deliverable – the technical appraisal, based partly on the functional descriptions of various ITS technologies, will show whether the ITS are deliverable
  • acceptable – consultation with residents and likely system users will show on what terms it is acceptable
  • affordable – the cost-benefit analysis will measure affordability
  • measurable – a critical factors analysis will identify the visible results which can be measured to show the degree to which the ITS investment has brought about the desired outcome
  • serviceable – if ITS can bring about a change which serves the needs of travellers and residents, within an affordable budget, then ITS will serve public needs and political priorities

A full-scale project appraisal can give the answers to each of these tests.

Appraisal and Evaluation

The evaluation of a scheme, at some point after it has opened, can provide important feedback to the analysts responsible for appraisal methods – with information on the performance of the chosen option and road users’ responses to it. For example, before and after comparisons can provide some indication as to whether the estimates made in the appraisal of the impact of variable message signs – on the severity of accidents and the delays they cause – are correct or whether they should be modified in future appraisals. Care needs to be taken to ensure that other influences are taken into account, such as increases in traffic volumes between the periods over which the comparison has been made. (See Evaluation)

Advice to Practitioners

It is not helpful to say that it is not possible to determine costs before contract tenders are received, or to assess benefits until after a system has been deployed. It is necessary to have some idea of the likely costs and benefits of ITS during planning stages – especially for the cost-benefit analysis, public consultation and decision-making phases.

The full range of impacts of each ITS solution should be recorded and compared with other solutions – both ITS based and conventional. Impacts for which there is no monetary value should not be ignored. The adverse consequences of the investment should be listed, as well as the extent to which each investment option will address the objectives. Always:

  • keep the transport policy objectives firmly in mind
  • choose evaluation measures relevant to the key issues for decision or debate – which will be understood by the decision-makers
  • evaluate the “do nothing” or “do the minimum” option and any non-ITS alternatives – as well as the ITS options that are being considered
  • think about possible side effects and secondary or unintended impacts of ITS – such as the impact of public transport priority on private traffic, or the need to increase public transport supply to meet demand
  • cost-benefit calculations should be based on quantified, empirical data as much as possible
  • if limited data or resources mean that test results from a demonstration or experiment have to be scaled up or scaled down to form the basis of a new evaluation – use only valid empirical data and take great care. Many benefits shift once the scale changes – and the unintended consequences may be very different

ITS Toolkits

There are several examples of published guidance on the use of ITS to address transport problems and deliver policy objectives – written to inform transport planners about the options that they should consider, as well as their strengths and limitations. The guidance generally includes examples of successful schemes and an assessment of why the option chosen met the transport planners’ expectations:

The UK Department for Transport published an ITS Toolkit in 2006 aimed at informing local authorities about the options which they should consider as part of the package of measures for inclusion in the local transport plans which are submitted to the Department for funding (

the EU “2decide” project (2009-11) created an on line toolkit as part of the EU’s action plan for the development of intelligent transport systems for Europe. The toolkit is intended to support decisions about the deployment of ITS based solutions. It provides guidance on the expected benefits of different ITS applications based on the evaluation of existing systems, summaries of case studies and access to evaluation reports ( )

Both of these toolkits provide an invaluable source of information about ITS options linked to transport problems and transport related concerns – such as poor air quality – which various options can resolve.


Reference sources

World Road Association Technical Committee on Road Network Operations (2016) Uses of ITS Including Consideration of Planning for Future Improvements, Upgrades and the Economy. Report 2016R10 World Road Association (PIARC) Paris. ISBN 978-2-84060-391-7. Available from the Internet site of the World Road Association.

UK Department for Transport  WebTAG Analysis Guidance (See )

ROSEBUD Consortium (2005) Road Safety and Environmental Benefit-Cost Effectiveness Analysis for Use in Decision-making Netherlands Overview Effects Infrastructure (OEI) (See

American Association of State Highway and Transportation Officials (2010) AASHTO ‘Red Book’ on User and Non-User Benefit Analysis for Highways, 3rd Edition (available from: