CEE250

SECTION: 2

COURSE TITLE: INTRODUCTION TO TRANSPORTATION ENGINEERING

SPRING 2023

DATE OF SUBMISSION: 04/03/2023

SUBMITTED BY:
NAME ID
MD. ZAWAD AMIN AS-SALEK 201 1847 025
Part 1: City and transportation mode selection

I have selected Kimbe and Kokopo from Papua New Guinea as my two cities for the project. As

per the conditions, the distance between them is 271 km and there is currently no train service

between them. So, I have selected to introduce a train service between Kimbe and Kokopo of

Papua New Guinea.

Kimbe and Kokopo are the capitals of the West New Britain province and East New Britain

province of Papua New Guinea respectively. As these are two separate areas with different

ideologies and culture, it is only realistic to introduce a train service in order to increase the

people’s frequency of travel through affordability. It will ultimately contribute to the growth of the

two cities’ economy.

Fig: Images demonstrating the maps of Kimbe and Kokopo

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 Fig: Possible rail track distance of a round trip Kimbe – Kokopo – Kimbe: 586.91 km. Calculated

using Google Maps distance measurement tool

Currently, there is only airplane services as the transportation facility between these two cities,

which is really expensive costing around $526 per flight [1], especially given it is 1/7th of the

average per capita income of a resident. [2] Therefore, for the middle-income class of people, a

train service system would be highly beneficial, even more than a bus service.

Hence, considering all the points above, my proposal for the project would be a train service

between Kimbe and Kokopo of Papua New Guinea. Further justification of the decision would

be found out from the cost benefit analysis of part 2 of the project.

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Part 2: Itemized cost and benefits in a yearly manner, NPV and C/B ratio

Costs:

(i) Number of passengers: Kimbe and Kokopo has a population of 27,205 and 29,241

respectively, as of 2023 [3]. This adds up to a total population of 56,446 people for both

the cities. According to the problem statement, as this figure is less than 2 million, we

shall consider that 1% of each city will use our proposed railway service on a daily

basis, which is equal to a maximum of 273 and 293 people from Kimbe and Kokopo

respectively. Therefore, the service has to be designed in such a way so that it can

accommodate 300 people per trip simultaneously.

But we are planning for the next 10 years. According to reports, the population of

Kokopo is expected to reach 34,338 by 2033 [4]. Therefore, we shall keep room for 40

additional seats in case of demand in the near future, which adds up to 340 seats for the

whole train.

(ii) Land Acquisition Cost (Right of Way): Since the length of the rail service would be

around 271 km, and let us assume that a width of 10 m = 0.01 km is adequate for the rail

line as well as the space on both sides, the total area required for acquisition for the rail

line is = 271 x 0.01 = 2.71 km^2 = 2710 hectare. As our target area comprise of mostly

agricultural lands in Mataburu and Nahavio, according to a report from 2018, the price

of an average agricultural land in Papua New Guinea per hectare is 2850 Kina [5]. So,

cost of land for only rail line = 2710 x 2850 = 7.7 million Kina = 1.8 million GBP. [All
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 conversion rates are taken as of the global conversion rates for 4th March, 2023]

(iii) Cost of building the stations: Considering the low cost of living of the population of

Papua New Guinea, the stations are proposed to be built in the simplest and smallest

possible way, which should cost around 50,000 Kina x 2 = 100,000 Kina = 23,575 GBP.

Adding it up with the cost of building the offices and parking lots should sum up to

around 40,000 GBP.

(iv) Cost of train cars: The cost of locomotive of a passenger train should be around 3

million USD = 2.5 million GBP and that of other cars = 50,000 USD x 5 [as we need 5

coaches to accommodate 5 x 68 = 340 people] = 250,000 USD = 210,000 GBP [6]

(v) Cost of operations and maintenance cost per year: According to Streets MN, the

operations and maintenance cost of a train per passenger per mile is 0.3 USD [7]. So, for

our case, 271 km = 168 miles and for 340 passengers a year = 0.3 x 168 x 340 x 365 =

6.2 million USD = 5.1 million GBP.

Benefits:

(i) Tickets: The primary aim of building this railway project was to provide an opportunity

to the mass people to save their money while travelling. As the price of current

transportation system is 526 USD = 437 GBP, less than 1/8th of this price which is 50

GBP should be the ticket price for travelling. Suppose, an average occupancy rate of

60% is maintained. So, per year, revenue from tickets = 50 x 365 x 340 x 0.6 = 3.7

million GBP.
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 (ii) Taxes: Suppose, a tax of 15% is imposed on travelling in the train. So, revenue from

taxes per year = 3.7 million x 0.15 = 555,000 GBP

(iii) Rents: Rents from shops and car parking in both the stations should rack up to another

500,000 GBP per year.

(iv) Savings from time saving, reducing pollution and safety saving: Every year,

railroads save consumers billions of dollars while reducing energy consumption and

pollution, lowering greenhouse gas emissions, cutting highway gridlock and reducing

the high costs to taxpayers of highway construction and maintenance. [8] So, as our

project is of very small initiative, let us assume that the railway service saves up to 5

million GBP per year.

NPV Analysis:

On a foot note, the current head of state of Papua New Guinea is King Charles III of Great Britain.

Therefore, every cost and benefit analysis are done in GBP. On top of that, every scenario is being

considered from the point of view of the United Kingdoms.

Moving on to the NPV analysis, according to the current interest rate of World Bank loans, the rate

of interest for developing countries is 10% [9] First, we need to add up the costs and benefits for

the project.

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Cost for 1st year:

Item Cost (In million GBP)

Land Acquisition 1.8

Construction 0.04

Train 2.71

Operation and maintenance 5.1

Total = 9.65 million GBP

And for the next 9 years, only 5.1 million GBP will be required per year for maintenance purposes.

Now, benefit for per year for 9 years:

Criteria Benefit (In million GBP)

Tickets 3.7

Taxes 0.555

Rents 0.5

Time saving, safety saving and reducing pollution 5

Total = 9.755 million GBP

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So, the NPV for the railway project year by year for 10 years in millions GBP:

Year Cost Benefit

Original NPV Original NPV

1 9.65 8.77 0 0

2 5.1 4.21 9.755 8.06

3 5.1 3.83 9.755 7.33

4 5.1 3.48 9.755 6.66

5 5.1 3.17 9.755 6.06

6 5.1 2.88 9.755 5.51

7 5.1 2.62 9.755 5.01

8 5.1 2.38 9.755 4.55

9 5.1 2.16 9.755 4.13

10 5.1 1.97 9.755 3.76

Total= 35.47 Total= 51.07

Thus, the Benefit Cost Ratio,

BCR = 51.07/35.47 = 1.44

Which seems very profitable compared to the global financial market. Therefore, the proposed

railway service project from Kimbe to Kokopo might be very fruitful for both the mass people and

the country of Papua New Guinea.

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 References

1. https://www.rome2rio.com/s/Kokopo/Kimbe

2. https://www.statista.com/statistics/731709/gross-domestic-product-gdp-per-capita-in-papua-

new-guinea/

3. https://population-hub.com/

4. https://zhujiworld.com/pg/1189173-kokopo/

5. https://openresearchrepository.anu.edu.au/bitstream/1885/157842/1/211_economic%20valu

e.pdf

6. https://nap.nationalacademies.org/read/22149/chapter/5#25

7. https://streets.mn/2015/03/10/the-market-and-the-math-to-make-pasenger-rail-

work/#:~:text=Across%20the%20Amtrak%20system%2C%20the,the%20number%20of%2

0passengers%20onboard.

8. https://www.aar.org/wp-content/uploads/2020/08/AAR-Economic-Impact-Fact-Sheet.pdf

9. https://www.worldbank.org/en/news/press-release/1984/01/04/world-bank-lowers-interest-

rateagain#:~:text=The%20interest%20rate%20on%20loans,Development%20(IBRD)%20a

nnounced%20today.