Project: Georgia Samtskhe-Javakheti Road Rehabilitation Evaluation-Based CBA

Driving Growth in Georgia: MCC’s Road Investment Delivers Solid Economic Returns

Limestone Analytics’ evaluation shows MCC’s road rehabilitation in Georgia improved transport, reduced accidents, and created lasting economic benefits.

As part of its $387 million Georgia Compact, the Millennium Challenge Corporation (MCC) invested over $200 million to rehabilitate more than 220 kilometers of roads in the Samtskhe-Javakheti (SJ) region—an agricultural hub linking Georgia to Armenia and Turkey. The project aimed to reduce travel times, improve trade routes, and promote regional development.

To determine the long-term impact of this investment, MCC commissioned Limestone Analytics to conduct an evaluation-based cost-benefit analysis (ECBA). Incorporating independent evaluation data and updated modeling, the ECBA estimates an 11.0% economic rate of return (ERR)—above MCC’s 10% threshold for cost-effectiveness.

Key findings from the ECBA included:

• Reduced vehicle operating costs and shorter travel times were the largest benefits to road users.
• Accident reduction benefits—a new addition in this ECBA—added substantial value.
• The benefits reached an estimated 54,000 people living near the improved roads.

Limestone’s ECBA also included a scenario analysis showing that proper road maintenance is essential for sustaining benefits. Without it, the ERR drops below the viability threshold—highlighting the importance of long-term infrastructure planning.

Strategic infrastructure investments, when combined with robust evaluation, can generate measurable economic and social returns. MCC’s SJ road project improved access, safety, and efficiency for communities and businesses across southwest Georgia.

Link to publication on MCC / UMichigan website: https://mcc.icpsr.umich.edu/evaluations/index.php/catalog/26632