The client is a developer listed on Bursa Malaysia, focusing on Property Development, Infrastructure Concession and Construction. The client’s business focuses on expressway developments in Southeast Asian countries. As part of the federal budget submission requirement, the client is required to provide an estimate of the socio-economic benefits from several expressway projects that are currently under construction.
FULL STORY
In order to justify the huge Government CAPEX allocation on the expressway developments, the client was asked to conduct a socio-economic impact assessment that identifies the different types of socio-economic benefits in order to determine the magnitude of these benefits towards the Federal Government, respective State Governments, as well as the general public. The assessment should capture the benefits during the construction and operation phase of the expressways.
KEY OUTCOMES
We started with a thorough review on the alignment of the expressway, which includes the entry/exit points and spur lines, as well as the design capacity in terms of traffic volume to be handled during the initial phase and the mature phase. This has enabled us to better determine the local communities and travellers who will benefit from the expressway project.
Subsequently, we began an international benchmark to obtain and understand the economic impact multiplier that was recorded in similar expressway development in other areas. In order to ensure the relevancy of the impact estimate, the benchmarking framework was guided by several key requirements which included the country’s GDP level, car ownership ratio, population density in the development area, alternative commute options in the development area, length and capacity of the expressway, income level as well as the construction period.
With the obtaining of this key data, we proceeded to develop a socio-economic model, which can stimulate cash flow and boost job creation on the expressway project. Working with our subject matter expert in construction and project management, we managed to outline a detailed model that is based on the actual human resource management practice in a real-life expressway construction project. This has allowed us to forecast the project benefits for those living closest to the actual area.
This model also takes into account the potential impact of increase in traffic at various entry & exit points, as well as the potential impact on the real estate values along the expressway. These factors were captured and quantified in the Socio-economic Model, which translated into Economic Impact (GDP uplift, business generation), Employment Impact (job creation), Accessibility Impact (reduction in travelling time), and Environmental Impact (reduction in carbon emission & traffic congestion).
By the end of the study, we had quantified the critical socio-economic benefits that could be attributed to the project, during both the construction phase and the operation phase. This information serves as a reference for the client to justify the CAPEX investment by the respective government agencies.
