The aim of taking account of risks, uncertainties, and Optimism Bias is to obtain the best possible estimates of the costs and benefits of each option.
Practitioners should calculate an expected value of all risks for each option and consider how exposed each option is to future uncertainty. In addition, before and during implementation, steps should be taken to prevent and mitigate both risks and uncertainties. Risk management strategies should be adopted for the appraisal and implementation of large transport options although these principles can also be applied to smaller options.
Guidance is only available for cost risk adjustment. However, Transport Scotland recognises that economic appraisal should also account for risk adjusted benefits. The current recommendation is that risks associated with patronage or benefits should be accounted for by applying sensitivity or scenario testing around the central case.
