The Israeli Nohal Prat Model (Nohal Prat = Procedure for Transportation Project Analysis) is basically a set of guidelines for economic practitioners. This model is a joint effort by leading Israeli transport consulting companies and individuals, who represent the state of the practice in Israel. The model itself came into being by the prompting of the Israeli Finance Ministry, who wanted a set of guidelines, according to which all the Transport Projects in Israel, who wished to receive any kind of government funding, would be evaluated by the same set of assumptions.
The model´s basic methodology includes benefits and costs from various sources - mostly well known from the literature, and includes the following:
Savings in Passenger Time
Savings in Vehicle Operating Costs
Savings in Emissions
Construction Costs
Maintenance Costs
Each one of these elements have their specific submodel, including a detailed methodology as to how to calculate it.
The duration of the economic analysis is divided into 3 types of transportation projects, as follows:
Road projects, with a construction cost below 50 million New Israeli Shekels (NIS), which is about $15 million at current exchange rates - economic analysis period of 15 years
Road projects, between 50-250 million NIS, equivalent to $15-$75 milion - economic analysis period of 25 years (most of the projects in Israel)
Road projects above $75 million, and all public transport projects (irrespective of costs) - economic analysis period of 40 years
Another of the novelties of the Israeli model is its Vehicle Operating Cost model - this model is based on economic prices (net of taxes and subsidies, which are a major part of everything fuel and vehicle related in Israel), and utilizes a speed model calculated from regression analysis, of the following functional form:
VOC=B0 + B1*V^2 + B2*Ln(V), whereas:
VOC - vehicle operating costs
B0, B1, B2 - regression coefficients (differentiated by private cars, pickups, buses, and trucks)
V - velocity (speed, in kilometers per hour)
Ln(V) - natural logarithm of velocity
Construction costs are also specified in economic prices, whose major factors are in the cost of electricity, the cost of fuel to operate heavy machinery, and Value Added Tax (currently 16% in Israel).
The importance of the model is in the usage of a given set of guidelines, so that all the projects requiring some form of government funding, will be evaluated according to the same criteria, thus trying to use the limited economic resources of the government to fund the best projects, according to the same set of economic tools.