Cost-benefit analysis of development of Oslo Port and two alternative solutions

Oslo Port Authority recently presented a development plan for Oslo Port for the period 2000–2020 which contained proposals for solving the capacity constraints on large unit loads. The present cost-benefit analysis was commissioned by Oslo Port Authority. The objective of this analysis was to ascertain whether the proposal contained in the development plan is socially profitable, and to compare it with two alternative proposals. Our calculations indicated that all three port projects are highly profitable in cost-benefit terms. However, the present value of the development of Oslo Port is almost twice that of the second best alternative. The reduction in generalised transport costs alone is enough to give the project a positive present value. However, the reduction in external costs alone is enough to yield a similar outcome. We have assessed how deviations from the assumptions on which the calculations are based will affect outcome. The ranking of the projects does not change when take into account the worst possible outcome of all these uncertain factors. Nevertheless, only the net present value of the development of Oslo Port remained positive after we had factored in deviations from all assumptions. The conclusion is thus that the development of Oslo Port is a clearly profitable project in cost-benefit terms, and the conclusion appears robust to changes in the assumptions on which our calculations are based.