Evaluation of the cost-benefit method in the feasibility analysis of the Pelješac Bridge construction

Abstract

In the context of the construction of road infrastructure facilities, there is no doubt that the construction of new roads leads to an increase in the quality of transport services. A new road fosters the development of settlements through which it passes, and indirect benefits are achieved through new investments. Cost-benefit analysis (CBA) as a method involves consideration of a project’s financial returns, and most data on project costs and benefits are obtained through a relatively detailed financial analysis. Any independent variable reflected in the change results in a set share in project analysis; it is a critical variable and must be evaluated as reliably as possible. The implementation of a historical capital project in the Republic of Croatia has been highlighted in this paper – the construction of the Pelješac Bridge. Based on the transport criterion, the research has shown significant advantages achieved by bridge construction in the surrounding and wider area. The positive effects of demographic, economic, and social parameters are multiplying. The economic effects of bridge construction are highly favourable since, on the one hand, they are expressed as benefits in terms of savings on the costs of all activities from primary to quintary. On the other hand, they represent multiplications regarding the use and revitalisation of employment and natural resources. In accordance with the expected faster economic growth, the offer structure will cause a change in the relations within service activities in the direction of strengthening investments, intellectual services, tourism with all of its accompanying activities, etc. In the case considered, non-measurable benefits have not been quantified, although, independently from the CBA, their feasibility is fundamental. Nota bene, this primarily refers to the political component in strategic decision-making, such as the integration of regions, i.e., the achievement of the state territory integrity.