If there is a project that has good prospects of delivering benefits but has a long time lag until benefits, wouldnt the use of discounting unfairly disadvantage this project?
Discounting means that if you have two projects that would deliver exactly the same benefits but one would do so more quickly than the other, the one that would do so more quickly is favoured. This is about choosing the most valuable outcomes. It is a standard approach in economics and would be considered essential by, for example, Departments of Treasury. The further into the future that the benefits of a project occur, the lower the BCI score, so yes, projects which only deliver benefits in the distant future would find it more difficult to compete with projects that deliver more quickly. This is appropriate. Importantly, the time lag is only one of a large number of factors influencing the BCI. It is still quite possible for a project with a short lag to benefits to have a low BCI and for a project with a long lag to have a high BCI, depending on asset value, impact of works, adoption, risks, etc.
