This report by Standard & Poor discusses the credit implications of traffic risk in start-up toll facilities. The purpose of the report is to provide some guidelines for evaluating toll road traffic and revenue forecasts.
The report contends that optimism bias is a consistent trend in toll road traffic forecasting. Therefore, bondholders and lenders must view these forecasts with caution as they attempt to identify the risks that forecasts pose for credit quality.
The report uses 32 case studies to research toll road traffic forecasting. It then isolates reasons for optimism bias and develops a Traffic Risk Index from that information. The Traffic Risk Index can be used to identify uncertainty in a logical and consistent manner. Also, it can be used as a checklist to examine project-specific uncertainty and prompt appropriate inquiry.
The report makes four findings on its research and recommends forecast adjustments based on its findings on optimism bias in the study.