PPIAF Traffic Risk Brief: Delusion, Distortion, and Curses: Bias in Traffic Forecasting

Low traffic volume, and the low toll revenues that result, contribute greatly to the failure of toll road public-private partnerships (PPPs). This risk has several sources, including forecasting error, uncertainty inherent to the forecasting process, and bias. While some level of traffic risk will always be present in highway PPPs, governments, the private sector, and financiers can take steps to reduce and manage this risk through robust forecasting techniques and selecting the appropriate project structure. The PPIAF-funded guide, Toll Road PPPs: Identifying, Mitigating, and Managing Traffic Risk, provides guidance to government officials, financiers, and the private sector as they seek to reduce traffic risk and strengthen highway PPP projects in developing countries. This brief is part of a series that summarizes the content of the guide. Other briefs in this series and the guide can be downloaded from the PPIAF website.