A study of economic internal rate of return of the Natural Gas Public Bus Project in Bangkok, Thailand with capital appraisal of environmental respiratory diseases

A common accept-reject investment decision is relied on the measurement of net present value (NPV) and internal rate of return (IRR). Conditions to accept a project are NPV is positive and IRR is greater than a discount rate. Although, public agencies usually do not consider profit to be the first concern, governments, like private firms, have limited resources to provide social welfare. Deliberation of each project has to be taken strictly into a government's decision. The Natural Gas Vehicle (NGV) Project of Bangkok Mass Transit Authority (BMTA) demonstrates good will to improve the standard of living of Bangkok's residents in order to reduce traffic congestion and air pollution but this project has weak evidence of measurement of social welfare benefit. The project, therefore, has not had strong support from the Thai government since the project was introduced. This study provided some evidence about benefit of the NGV Project. The health effect was added into the project analysis to provide more completed measurement of social welfare benefit, mainly to improve NPV and IRR of the project. Several data, formulae, and econometrics methods were applied in the analysis. This study suggested that NPV and IRR were raised substantially when reduction of illness treatment was added. Health and environmental depletion effects, clearly, are significant factors that should be included in every government's project possibility study in order to provide the best benefit for people. At the end, this study also provided useful suggestions for further studies or analysis of similar programs.