# Transport Project Indicators

SEI indicators were selected to consider beneficiaries, job creation, extension of service to areas with higher poverty levels, and savings associated with reduced gas consumption.<sup>16</sup> Each of these input indicators is controlled for project size, yielding the following criteria inputs: beneficiaries per dollar invested (Ben_inv), jobs per dollar invested (Jobs_inv), and gas savings per dollar invested (Savings_inv). Beneficiaries is calculated by estimating traffic volumes, considering the occupancy rates for different types of vehicles. This information is taken directly from project proposal data included in the BIP. Data on the creation of jobs directly associated with construction and operation are also calculated based on BIP data, which were in turn derived from an estimation model based on the macroeconomic input-output matrix. Gas savings is an estimate of the annual savings in gas, measured in liters. The initial set of indicators also considered the extension of service to indigenous populations, but this criterion was later dropped due to limited variation.

Lastly, the SEI includes the poverty rate and tests the use of two alternative specifications to measure poverty. One takes a simple poverty rate (Pov_c) reflecting the percentage of people in the service area classified as “income poor”. It is important to note that it is not necessary that the users of the road are the same as the population that lives nearby the road that is under appraisal. It is possible that the locals could have a low vehicle per capita ratio, and the usage of the road is composed by transportation trucks, tourists, drive through or long-haul trips, etc. The other applies a multi-dimensional composite poverty index (MPI-CL) developed by MDS (Pov_multi) that accounts for five poverty dimensions: education, health, employment and social security, housing, and networks and social cohesion.

The FEI takes into account only one measure – the net present value index (IVAN) – derived from project CBAs. The IVAN is equivalent to a ratio of the net present value of future project costs and benefits to the project’s initial investment cost.

The formulas for SEI and FEI are as follows: SEI�w� �Ben_inv�w� �Jobs_inv�w� �Savings_ben�w� �Pov_c/multi �standardised� FEI� IVAN �standardized� where w�, ..., w� are the weights associated with each SEI criterion. Input project data are detailed in Annex 5.

## Transport Project Indicator Weighting

The criteria weighting of SEI variables was done using PCA, with the two specifications for measuring poverty. Table 9 gives the weights associated with each variable using each approach.

Table 9. Criteria Weighting, Transport SEI

|Simple poverty rate|Ben_inv<br>|Jobs_inv<br>|Savings_inv<br>|Pov_c<br>|
|---|---|---|---|---|
||0.614|0.224|0.724|0.224|
|Multi‐dimensional|Ben_inv|Jobs_inv|Savings_inv|Pov_multi|
|poverty index|0.442|0.224|0.839|0.224|

Note: The weights have been determined by PCA with the restriction that all weights must be positive and have a minimum contribution of 10%

> 16 In economic ($) terms, this would likely be considered in the FEI; however, here, our interest is to reduce consumption for environmental reasons. Therefore, the savings is measured in liters and included in the SEI.

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