North Luzon Expressway Rehabilitation and Expansion (Loan 7162/1769)

ADB could have done a more thorough test of the forecasts‘ sensitivity to changes in the basic variables, including tariff price elasticity, lower-than-expected economic growth, and higher gasoline prices. The fact that traffic volumes have been scarcely half those projected by technical consultants at appraisal has meant lower revenues and a less favorable FIRR. While it is understood that a range of projections were made and the lower ones were used, they nevertheless proved to be overly optimistic.