The Choice of a Social Discount Rate for Transport Projects: The Case of Russia and Post-Soviet Countries

The implementation of transport infrastructure projects is a key priority of the Russian government. Large funds are allocated from the budget for road construction to ensure connectivity across the country's regions. Evaluating their economic feasibility is a key step in managing transportation projects. A social discount rate is required to estimate the present value of net social benefits. This study aims to provide a reasonable methodology for estimating the social discount rate for long-term transport projects in Russia. To determine this rate, we use the social opportunity cost of capital approach (SOC) and the social rate of time preference approach (SRTP). For 0-30 years, we recommend SRTP = 3.2% in the general case and SOC = 7.4% to attract private funds. The confidence interval for the SRTP ranges from 1.7% to 4%. For 31-60 years, decision-makers should use 3.2%, and a zero-discount rate for the later period. The proposed solutions will be useful for other post-Soviet countries preparing large-scale infrastructure projects.