Economic evaluation of the proposed road between gobabis and grootfontein, namibia

Pienaar W.J. (2008)


First, a cost-benefit analysis is presented of reconstructing the existing road section between Gobabis and Otjinene in Namibia. Second, a cost-benefit analysis is presented of constructing a new direct road link between Otjinene and Grootfontein, coupled with the above-mentioned road upgrading between Gobabis and Otjinene as one project. The proposed link will shorten the existing route from Gobabis via Windhoek to Grootfontein by approximately 300km. The following economic indicators are shown in the two cost-benefit analyses: (i) Net Present Value, (ii) Benefit/Cost Ratio, and (iii) Internal Rate of Return. Third, the general economic impact that construction and operation of the entire road will have on non-road users within Namibia is evaluated. This analysis is divided into two parts: The first part deals with the once-off income-multiplier effect triggered by the initial investment in the road, while the second part addresses the recurring income accelerator effect that usage of the road is expected to have within Namibia. © Journal compilation © 2008 The Economic Society of South Africa.

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