# Introduction to ATAP worked examples

The examples provided in the ATAP Worked Examples Category are provided with two aims:

- To illustrate the application of the guidance provided in the various parts of the Guidelines for the various transport modes
- To illustrate the recommended format and layout for presenting a cost-benefit analysis (CBA) of an option/initiative, including documentation of the problem being addressed.

For various reasons, it is not possible to fully illustrate all desirable features of the write up of a CBA in the worked examples. The following complementary general notes aim to overcome this gap and should be read before specific worked examples.

- The relevant parts of the Guidelines provide the underlying basis for the worked examples
- Where the cost of infrastructure is provided in the worked examples, they are presented as the mean (most likely) estimate. Correct application of cost-benefit analysis (CBA) requires the mean (most likely) value to be used to the ‘central’ best estimate of CBA results (see ATAP Part T2, section x). It is acknowledged that in practice the ‘P50 estimate’ is often assumed to be the same as the mean estimate—although that is only the case when the probability distribution is symmetrical. Sensitivity tests using P50 and P90 cost estimates are recommended. Probability distributions of cost estimates are discussed in detail at the following address: investment.infrastructure.gov.au/about/funding_and_finance/cost_estimation_guidance.aspx
- The worked examples do not always provide references for the inputs or assumptions used. In practice however, practitioners should ensure they provide such references in all cases

## Key acronyms

### Table 1—Worked example acronyms

PV | Present value |

PVB | Present value benefit |

PVIC | Present value investment cost |

PVOC | Present value operating and maintenance cost |

PVC = PVIC + PVOC | Present value cost |

NPV = PVB—PVC | Net present value |

BCR | Benefit cost ratio |

- In most worked examples, only a single Project Case has been assessed. In practice however, multiple options will need to generated and assessed, with each option that gets through to the CBA stage assessed as a unique Project Case
- The calculation of CBA outputs requires use of the incremental changes between Base Case and Project Case. Practitioners are also encouraged to also show the Base Case and Project Case numbers used to calculate the incremental changes
- The worked examples present CBA results. The ATAP Guidelines requires these to be a central focus in the business case and subsequently in decision-making. Decision makers will, of course, also take other factors into account in decision making