Matching Framework Indicators
The BENEFIT Matching Framework is described by Indicators. Indicators were initially formulated in WP2 (deliverables D2) and reviewed/revised throughout the life of the BENEFIT project.
Financial - Economic Indicator: A measure of a country’s productivity
The Financial-Economic indicator (FEI) is built based on international indices published by prominent international institutions.
The Financial-Economic Indicator, despite its name, measures more than just the macro-economic and macro-financial context of a country, but more broadly the business environment and can be seen as a proxy of the level of productivity of a country. The Global Competitiveness Index of the World Economic Forum was selected to describe this dimension of the implementation context. The overall “competitiveness index” of the World Economic Forum aims to measure the capacity of the national economy to achieve sustained economic growth over the medium term, controlling for the current level of economic development. It includes predominantly:
But also:
In this context, a high value of the FEI is supportive of a high Revenue Support Indicator, as implementation context conditions would allow for business initiatives.
Institutional Indicator: A measure of a government’s effectiveness
The Institutional (InI) indicator is built based on international indices published by prominent international institutions.
The Institutional indicator shows the extent to which the political, legal and regulatory, and administrative context in a country is stable and of a high quality. It includes three dimensions:
o The “political” sub-dimension “political capacity, support and policies” which is composed by three main governance indicators of the World Bank:
When combined, these three indicators give a good overview of the general political situation in a country. In short, the political stability and absence of violence basically captures the likelihood of political instability and/or politically-motivated violence, where the voice and accountability reflects a country’s citizens’ ability to participate in selecting their government. Also, the control of corruption index delineates the extent to which public power is exercised for private gain.
o The “regulatory” sub-dimension “legal and regulatory framework” which is also composed by the World Bank Indicators:
combined with the inverse of the aggregated OECD indicators of:
The ECTR index of the OECD in reverse represents the extent of liberalization of these markets. Again, these three elements paint a rather comprehensive picture of the judicial and regulatory context of a country. Whilst the rule of law index represents the extent to which agents have confidence in and abide the rule of society, the regulatory quality index captures the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.
o The “administrative” sub-dimension “public sector capacity” has only one indicator, namely
This index mainly reflects the level of effectiveness of government in terms of the quality of public service, the quality of civil service, the quality of policy formulation and implementation and the credibility of the government’s commitment to such policies.
Reliability – Availability Indicator
The Reliability/Availability Indicator (IRA) represents the level of physical and operational reliability and availability of the transport service. The quantitative analysis streams identified it as important in reaching traffic and revenue goals.
Other factors connected to this indicator are: infrastructure type; size (of investment) and location. All of them are considered as decisions taken prior to project award, as are the project’s outcome targets.
Cost Saving Indicator: A measure of project efficiency
The Cost Saving Indicator (CSI) is a composite indicator including:
Ability to construct
Ability to monitor/control/plan and provide political support of the respective (public) contracting authority
Adoption of Innovation and its successful application
Life Cycle Planning and operation
It is evident, based on the above description, that the CSI, in all practical terms, illustrates a measure of a project’s efficiency during construction and operation. In addition, many of its constituent factors are specified before and/or during project award and include all directly involved actors: the constructor; the operator; and the contracting authority. If the project is promoted and implemented on a national level, the Institutional indicator and the Cost Saving Indicator bear limited overlap with reference to the contracting authority, as both indicators address institutional maturity. However, the assessment is based on a different approach and for CSI concerns the ability of the contracting authority to monitor the project and provide the respective political support.
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Revenue Support Indicator: A measure of transport project integration and ability to generate revenues
The Revenue Support Indicator (RSI) is a composite indicator that includes:
The level of Coopetition of the new (greenfield) and existing (brownfield) parts of the project. This indicator reflects:
oThe level of business development scope, designed to attract demand (e.g. airports etc.);
oThe level of project exclusivity with respect to its position in the transport network (e.g. metros, bridge and tunnel projects, ports airports under certain conditions). Notably, exclusivity may also be contractually induced;
oThe level at which a transport network supports the project’s exclusivity
Revenue sources from:
o Traffic from new and brownfield operation in relation to:
o Traffic from other transport infrastructure bundled in the project in relation to:
o Other non-transport related activities in relation to:
Overall, it can be appreciated that, the Revenue Support Indicator (RSI) is a measure of the project’s integration and ability to generate revenues.
Governance Indicator: A measure of contractual efficiency/effectiveness and flexibility/control
The Governance Indicator (GI) refers to factors setting the governance scene within a project. In this respect, it is defined by the contractual conditions and the process leading to them. These are determined during the tendering and contract award stage. However, this does not necessarily mean that the GI value remains constant through the contract duration.
Many parameters of the Governance Indicator (GI) are subject to the level of enforcement and monitoring exercised by the contracting authority. Hence, the value of the GI risks decreasing if proper contract management is not enforced by the contracting authority.
In addition, the value of the Governance Indicator may change through re-negotiations, with ramifications on other indicators. It should be noted that a renegotiation process will reduce by default the value of some parameters. For example, the parameter “competition between bidders” will be “null” following renegotiations as the process only takes place with the one party that has been awarded the contract.
Remuneration Attractiveness Indicator: A measure of project income potential
The Remuneration Attractiveness Indicator (RAI) represents the various income sources with their assessed risk and potential cost coverage.
Revenue Robustness Indicator: A measure of project revenue robustness
The Revenue Robustness Indicator (RRI) represents the various revenue sources with their assessed risk and potential cost coverage.