1. CIRAS FINAL CONFERENCE
CBA-Cost Benefit Assessment
Katowice, June, 8th, 2016
Reinhard Hutter, CESS
Centre for European Security Strategies

2. The CBA Functional Block Cost-Benefit Analysis
Main Parameters
Only factors which can be expressed in money! (other factors are treated in the other Functional Blocks)
Lifetime (years)
Discount rate per year
Detailed cost structure
Benefits structure
Numerical and graphical results

3. The CBA Functional Block Cost-Benefit Analysis Process
Life Cycle Cost model input, including cost
For planning and procurement
For operation and maintenance
Monetary benefits caused by the system
Set-up of Cost Structure
Modify cost structure (if deemed necessary)
Input detailed cost data
Calculate results
Evaluation Session
Numerical results
Graphical results
Comparison of Alternatives
Handover of selected results to the RRA tool
Results

4. Use Case 1 Terrorist threat
CBA Application Sample Energy Threats and Security Measures & Alternatives
Use Case 1 Terrorist threat
Bomb in power plant & Bomb in substation
Crisis room
Intrusion detection sensor system
Screening, training, guards
Use Case 2 Criminal threat
Sabotage
Mantrap & cameras
Screening, training, four eyes
Use Case 3 Cyber attack
Sabotage or criminal or terrorist
3 mixtures of control centre, IT measures, intelligence, training

5. The CBA Cost Structure
Detailed data received from energy provider along this structure:
Investment Cost (one time or several increments over time)
Planning
Procurement
Set-up
Stocks
Operational Cost
System operation
Maintenance
End-of-life-removal
Monetary Benefits
Reduction of casualties
Reduction of damages
Reduction of operational cost (if not included in “operational cost”)
Insurance, profit, market etc. beneficial effects.

6. CBA Results
Input data and result data are usually presented as cost- profiles over a specified lifetime (e.g. 10 years)
Tabular reports with Key Numerical Values, including
Total investment
Total operations cost
Discounted numbers over time
Net present values (NPV)
Graphics (bar charts and cost-over-time profiles)
Trade-off/ break-even point(s)

7. CBA Result Sample
Sample Bar Chart

8. CBA Time Profiles and Trade-Off
2nd Assumed
Attack
Net Savings
Break-Even
Renewal
Invest
Initial
Invest

9. Net Savings of the SM

10. Time Profiles and Trade-Off Cyber threat use case(continuous)

11. Thank you for your attention! Reinhard Hutter
Technical Director
CESS
Co-funded by the Prevention, Preparedness and Consequence Management of Terrorism and other Security-related Risks Programme of the European Union (HOME/2013/CIPS/AG/ )