3. Proposed productivity metrics

After considering a number of measures, the most useful productivity metrics were considered to be (see further discussion in Appendix A):

  • The present value of productivity benefits
  • The productivity benefit intensity, which is present value of productivity benefits as a percentage of the present value of total benefits including WEBs
  • The productivity benefit cost ratio (BCR), which is the present value productivity benefits divided by the present value of investment costs.

Table 2 shows a simple worked example of how to obtain the three productivity metrics from the main benefits and costs of a typical road transport initiative.

Table 2: Productivity metrics: simple worked example
Benefits and costs
a Private car travel time vehicle operating cost savings 12*
b Business car and truck travel time vehicle operating cost savings 5
c Safety benefits 2
d Environmental benefits 1
e Wider economic benefits 4
f Investment cost 12
CBA measures without WEBs
g Total benefits (a + b + c + d) 20
  NPV (g - f) 8
  BCR (g / f) 1.7
CBA measures with WEBs
h Total benefits (g + e) 24
  NPV (h - f) 12
  BCR (h / f) 2.0
Productivity metrics
i Present value of productivity benefits (b + e) 9
  Productivity benefit intensity % (i / h *100) 38%
  Productivity BCR (i / f) 0.8

* All values are $’000 million present values

The fact that the inputs for productivity metrics calculation can readily be extracted from CBAs makes the task of compiling these metrics straightforward once a CBA is done.