To account for uncertainties involved in an economic analysis of project, sensitivity analysis are usually being done in Korea. Though useful for policy analysis, but it lacks explicit consideration of probability of occurring certain events conside...
To account for uncertainties involved in an economic analysis of project, sensitivity analysis are usually being done in Korea. Though useful for policy analysis, but it lacks explicit consideration of probability of occurring certain events considered in the sensitivity analysis. Risk analysis otherwise can explicitly account for the probability of certain event which has dire impact on project viability, such as cost, discount rate, and size of benefit. This paper reports experience of applying risk analysis method for economic evaluation of railroad investment. Probability distribution of event has paramount impact on the risk analysis results, while not many prior researches dealt with these issues. Probability distribution of rolling stock cost and operating cost, in addition to those cost variables, are developed considering railway demand in this study. Case study results are reported. Issues in applying risk analysis are reported in addition to further research direction.