External costs estimation in a cost-benefit analysis: The new Formia-Gaeta tourist railway line in Italy

In 2016 a new law for public contract was approved in Italy also aimed at improving the national and local sustainable transport planning. The Italian government has also adopted new "Guidelines for assessment the Investment Projects" derived from the European Commission indications about the external costs of transport estimation in the Cost-Benefit Analysis. Starting from these considerations, the aim of this paper was to propose a new methodology, in compliance with the Italian guidelines, for the estimation of the external costs of transport in a Cost-Benefit Analysis. The application case study was a new tourist railway line in Lazio Region. The external costs estimated were the variations in term of: climate change, air pollution, noises, congestion and road accident. Estimations results allow to conclude that there is a social convenience of this new rail infrastructure because: i) a positive Net Present Value equal to about 27 M€ was estimated; ii) an Internal Rate of Return much greater than the discount rate (9% vs. 3%) was observed; iii) a benefit / cost ratio equal to 2 and a PayBack Period of 15 years was quantified. The overall amount (in monetary value) of external costs saved is about 360 thousand Euros/year (2016 prices) with a cumulative value, for all the life-period considered (30 years), equal to 11 million of Euros.