Sensitivity analysis is a fundamental part of a STAG study. It is used to test the vulnerability of options to future uncertainties which are unavoidable. Through analysing the range of values that key variables may take, through sensitivity analysis any resultant effects on options can be examined.
The identification of future uncertainties which, if realized, would cause a scheme to perform poorly, should not be viewed as a negative; rather, it provides decision makers with the important information regarding the robustness of the modelled results, and highlights areas where mitigation can be put in place to ensure a positive outcome.
The calculation of switching values shows by how much a variable would have to fall or rise to make it not worth undertaking an option. This should be considered a crucial input into the decision as to whether an option should proceed.
Therefore it should be the norm rather than the exception, to carry out sensitivity analysis on the key variables for a given transport project considered during Part 2 Appraisal. These variables will usually have a significant impact on either the overall cost or benefit of the project. For example, forecast demand for a proposed new railway line would play a crucial role in justifying whether or not the line would cover the operating costs and/or contribute sufficiently to the capital costs of the project.
Sensitivity tests may be developed in a number of different ways, including:
• Development is higher or lower than forecast in the do-minimum (e.g., including all ‘reasonably foreseeable’ factors, or only ‘near certain’ factors);
• The interventions planned but on a smaller/larger scale;
• Scenarios designed to lead to extreme high or low levels of demand for the scheme; or
• Scenarios that better represent the views of particular stakeholders.
A standard sensitivity test will be the scenario where modelled demand is higher or lower than that in the do-minimum. Transport Scotland also expect that any assumptions of local growth in either transport or land-use which is significantly above the national long-term trend would be subject to such sensitivity testing.
Where there is uncertainty surrounding the appropriate reference cases or sensitivity tests to be used in an appraisal, liaison with Transport Scotland is recommended to agree the relevant assumptions.
