Ceng 6301

CENG
CENG 6304
6304
Planning
Planning andand Economic
Economic
Evaluation
Evaluation of
of Transport
Transport Projects:
Projects:
Focus
Focus on
on Highway
Highway Transport
Transport
Wubishet
WubishetJekale
Jekale(Dr.
(Dr.Eng.)
Eng.)
November,
November,2012
2012
10/21/20 Jekale CM Consultancy 1

We
Weshould
shouldnonolonger
longerconstruct
constructphysical
physical
infrastructures
infrastructuresfor
forthe
thepurposes
purposesofof
shelter,
shelter,communication,
communication,getting
gettingsafe
safe
water
watersupply
supplyand
andenergy
energyand
and
disposal
disposalof
ofsewerages!!
sewerages!!
And
And
We
Weshould
shouldnonolonger
longerbegin
beginbyby
designing
designingphysical
physicalinfrastructures!!
infrastructures!!

But
But
We
Weneed
needto toconsider
considersuch
suchphysical
physical
infrastructures
infrastructuresasasparts
partsof
of
development
development//business
businessinvestments!!
investments!!
Therefore
Therefore
We
Weneed
needto toensure
ensurethethefeasibility
feasibilityof
of
such
suchinvestments
investmentswith
withregard
regardtotothe
the
Basic
BasicPlanning
Planningprinciple
principleofofScience
Science
together
togetherwith
withtheir
theireconomic
economic
evaluations!!
evaluations!!

As
Asaaresult
result
We
Weneed
needtotodevelop
developknowledge
knowledgethat thatmixes
mixesthe
the
requirement
requirementof ofthe
theabove
abovetwo twoneeds
needsthrough
through
interdisciplinary
interdisciplinaryapproach
approachto toEngineering,
Engineering,
Management,
Management,Accounting
Accountingand andEconomics!!
Economics!!
And
And
This
Thiscourse
courseisisone
onepart
partthat
thatisisaimed
aimedto
todevelop
develop
this
thismix:
mix:
Planning
Planningand
andEconomic
EconomicEvaluation
Evaluationof
ofTransport
Transport
Projects:
Projects:Focused
Focusedon highways!!!!
onhighways

Course
Course Description
Description
•• Highway
HighwayPlanning
PlanningUsing
Usingthe
theHDM
HDMModel
Model
––User
User Costs;
Costs; Construction
Construction Costs;
Costs; Maintenance
Maintenance
and
andOperation
OperationCosts
Costs
•• Cost
Cost and
and Transport
Transport Efficiency
Efficiency implications
implications ofof
Maintenance
Maintenanceand andGeometric
GeometricStandards
Standards
•• Cost
Cost // Benefit
Benefit Analysis
Analysis of
of Road
Road Transportation
Transportation
Infrastructure
InfrastructureInvestments
Investments
•• Road
Road Transport
Transport Infrastructure
Infrastructure Project
Project
Management
Managementand andContracts
Contracts
•• Quality
Quality Assurance
Assurance andand Control
Control (QA
(QA / / QC)
QC) inin
Road
Road Planning,
Planning, Construction,
Construction, Maintenance
Maintenance andand
Operation
Operation

Course
Course Outline
Outline
PART I: Introduction
1.
1. Planning
Planning
–– Planning
Planning Concepts
Concepts
2.
2. Economic
EconomicEvaluation
Evaluation
–– Economic
EconomicEvaluation
EvaluationConcepts
Concepts
3.
3. Focused
FocusedSubject
Subject
–– Highway
HighwayTransport
Transport

Course
Course Outline
Outline
PART II: Highway Transport Planning
and Investment Analysis
4.
4. Why
Why Transport
Transport Planning
Planning and
and
Economics
Economics
5.
5. Transport
Transport Planning
Planning and
and Investment
Investment
Analysis
Analysis
6.
6. Tools
Tools -- Cost
Cost // Benefit
Benefit Analysis
Analysis
and
andHDM
HDM

Course
Course Outline
Outline
PART III: Highway Transport
Infrastructure Project Management
7.
7. Construction
ConstructionProject
ProjectManagement
Management
–– Processes;
Processes;Stakeholders;
Stakeholders;Resources;
Resources;Performance
Performance
8.
8. Procurement
Procurementand
andContract
Contract
–– Governance
GovernanceStructure,
Structure,Procurement
ProcurementManagement,
Management,
and
andContract
ContractManagement
Management
9.
9. Quality
QualityManagement
Management
–– QC;
QC;QA
QAand
andTQM
TQMfor
forHighway
HighwayInfrastructures
Infrastructures

PART
PARTI:I:Introduction
Introduction
1.
1. Planning
Planning
–– Planning
Planning Concepts
Concepts
2.
2. Economic
EconomicEvaluation
Evaluation
–– Economic
EconomicEvaluation
EvaluationConcepts
Concepts
3.
3. Focused
FocusedSubject
Subject
–– Highway
HighwayTransport
Transport

1:
1: Planning
Planning Concepts
Concepts
Planning:
Planning: Definition
Definition
AAfuture
futureoriented
orientedprocess;
process;concerning
concerningthe
the
relationships
relationshipsofofends
endsand
andmeans,
means,totoguide
guide
the
theimplementation
implementationof ofaadesired
desired
development
developmentgoal
goalin
inthe
thebest
bestpossible
possible
way!!
way!!

1:
1: Planning
Planning Concepts
Concepts
Planning:
Planning:Definition
Definition
Three
ThreeImportant
ImportantMessages:
Messages:
––Future
Future oriented
oriented process
process toto guide
guide the
the
implementation
implementationof ofaadesired
desiredgoal
goal
––relationships
relationshipsof
ofends
endsand
andmeans
means
––best
bestpossible
possibleway
way

I-1:
I-1: Planning
Planning Concepts
Concepts
Planning:
Planning:Seven
SevenPrinciples
Principles
Basic
Basic++Administrative
AdministrativePlanning
Planning
Capacity
Capacity--Environment
Environment--Development
DevelopmentTradeTradeoff
off
Process
Process--Result
ResultTrade
Tradeoff
off
Performance
PerformanceCriteria
CriteriaIntegrations
Integrations
Scope
Scope--Method
Method--Organization
OrganizationDefinitions
Definitions
Resources
Resources--Schedule
ScheduleDefinitions
Definitions
Tracking
Tracking--Accountability
Accountability--Learning
Learning

1:
1: Planning
Planning Concepts
Concepts
Basic
Basic++Administrative
AdministrativePlanning
PlanningCharacteristic
Characteristic
• • The
The first
first planning
planning devised
devised forfor any
any works
works and
and services
services cancan be be
considered as Basic Planning.
considered as Basic Planning.
• • This
This isis because
because everyevery planning
planning isis prepared
prepared withwith the
the available
available
information and acceptable assumptions considered
information and acceptable assumptions considered thereof. thereof.
• • Besides,
Besides, plans
plans are
are prepared
prepared within
within the
the reality
reality ofof certain
certain level
level ofof
uncertainties.
uncertainties.
• • These
Theseuncertainties
uncertaintieswillwillreduce
reduceas asthe
thework
workororservice
serviceisisprogressed
progressed
and other information and other relevant factors are
and other information and other relevant factors are revealed. revealed.
• • These
Thesecaused
causedmodification
modificationandandrevisiting
revisitingofofbasic
basicplans.
plans.InInaddition,
addition,
subsequent
subsequent processes do also prepare their own plans whichare
processes do also prepare their own plans which are
derivatives of the Basic Plan.
derivatives of the Basic Plan.
• • As
Asaaresult,
result,another
anothercomponent
componentofofplanning
planningcalled
calledAdministrative
Administrative
Planning reigns over the whole processes.
Planning reigns over the whole processes.
• • This
This implies
implies thatthat there
there are
are two
two faces
faces ofof planning;
planning; Basic
Basic and and
Administrative Planning.
Administrative Planning.

1:
1: Planning
Planning Concepts
Concepts
Capacity
Capacity--Environment
Environment--Dev’t
Dev’tCharacteristic
Characteristic
•• Planning
Planning shall
shall trade
trade among
among three
three major
major elements;
elements;
namely
namelyCapacity,
Capacity,Environment
Environmentand andDevelopment.
Development.
•• Every
Everyplan
planshall
shallconsider
consider
–– the
theexisting
existingreality
realitycalled
calledCapacity;
Capacity;
–– the
the Environment
Environment whichwhich can
can be
be understood
understood as
as planning
planning
within
withinand
andaround;
around;and
and
–– the
therequired
requireddemand
demand or orneed
needcalled
calledthe
theDevelopment.
Development.

1:
1: Planning
Planning Concepts
Concepts
Process
Process--Result
ResultCharacteristics
Characteristics
•• Planning
Planning shall
shall also
also trade
trade off
off the
the two
two important
important
performance
performance characteristics;
characteristics; Process
Process and and
Result.
Result.
•• Process
Process because
because unintended
unintended circumstances
circumstances andand
encountered
encountered conditions
conditions may may change
change toto cause
cause
administrative
administrativere-
re-&&detail
detailplanning.
planning.
•• Result
Result because
because the
the desired
desired Output
Output -- Outcome
Outcome --
Impact
Impact which
which waswas called
called thethe Development
Development
element
elementshall
shallbe
befulfilled.
fulfilled.

1:
1: Planning
Planning Concepts
Concepts
Performance
PerformanceCriteria
CriteriaIntegration
IntegrationCharacteristics
Characteristics
•• Planning
Planning shall
shall look
look into
into and
and balance
balance thethe five
five Need
Need --
Impact
Impactbased
basedcycle
cycleperformance
performanceCriteria.
Criteria.
•• These
These are;
are; Relevance,
Relevance, Efficiency,
Efficiency, Effectiveness,
Effectiveness,
Sustainability
SustainabilityandandImpact
Impact(Figure
(FigureNext
NextSlide).
Slide).
•• These
Theseperformance
performancecriteria
criteriacan
canbriefly
brieflybe
bedescribed
describedas:
as:
–– Relevance:
Relevance:Response
Responsetotoneeds
needsandandpriorities
priorities
–– Efficiency:
Efficiency:Delivery
Deliveryininterms
termsofofcost,
cost,time
timeand
andquality
qualityas
asper
per
specification
specification
–– Effectiveness:
Effectiveness:Achievement
Achievementofofthe thecommon
commongoal goal
–– Sustainability:
Sustainability:Continuation
Continuationofofits
itsrelevance
relevance
–– Impact:
Impact:Various
Variouseffects
effectsofofthe
theproject
project

1:
1: Planning
Planning Concepts
Concepts
Final
Outcomes
Needs Impacts or Socio-
economic
Problems
Intermediate
Outcomes
Objectives Inputs Activities Outputs
Relevance Efficiency
Effectiveness
Utility and Sustainability

1:
1: Planning
Planning Concepts
Concepts
Scope
Scope--Method
Method--Organization
OrganizationDefinition
Definition
•• Planning
Planningrequires
requiresto
todefine
define
–– Scope
ScopeofofWorks
Worksor
orServices;
Services;
–– Construction
Construction Methods
Methods and
and Approaches
Approaches selected;
selected;
and
and
–– The
TheRequired
RequiredImplementing
ImplementingOrganization.
Organization.

1:
1: Planning
Planning Concepts
Concepts
Schedule
Schedule--Resources
ResourcesDefinition
Definition
•• Planning
Planningalso
alsorequires
requiresto
todefine
defineSchedules
Schedulesand
and
Resources
Resources assigned
assigned for for thethe Highway
Highway
Development
DevelopmentServices
Servicesand
andWorks.
Works.
•• Resources
Resources include
include Human,
Human, Physical,
Physical,
Information,
Information, Management
Management / / Service
Service and
and
Financial
FinancialRequirements.
Requirements.
•• Schedule
Schedule shows
shows … … Activities,
Activities, Required
Required
Resources,
Resources, Responsibility
Responsibility Matrices
Matrices along
along aa
Time
TimeScale
Scale
1:
1: Planning
Planning Concepts
Concepts
Tracking
Tracking--Accountability
Accountability--Learning
LearningObjectives
Objectives
•• Planning
Planning isis used
used forfor evaluation
evaluation purposes.
purposes.
Consequently,
Consequently, itit possesses
possesses three
three dimensional
dimensional
benefits;
benefits;
–– Tracking,
Tracking,Accountability
Accountabilityand
andLearning
Learning
–– Tracking
Trackingbecause
becauseprogresses
progressesshall
shallbe
bechecked;
checked;
–– Accountability
Accountability because
because responsibility
responsibility and
and authority
authority
for
forsuccesses
successesand
andfailures
failuresare
aredetermined;
determined;andand
–– Learning
Learning because
because subsequent
subsequent planning
planning shall
shall
consider
considerrespective
respectivelessons
lessonslearned.
learned.

1:
1: Planning
Planning Concepts
Concepts
I-1.
I-1. Look
LookInto
Into
•• The
Themajor
majordifferences
differencesand
andsimilarities
similaritiesamong
among
QCQC//QAQA//TQM
TQMPrinciples
Principles
•• The
TheTen
TenSchools
Schoolsof ofStrategic
StrategicManagement!!!
Management!!!
Compare
Comparethe
theTwo
Twomajor
majorcompeting
competingSchools
Schools--
Planning
PlanningVersus
VersusLearning
LearningSchools!!!
Schools!!!

I-2:
I-2: Economic
Economic Evaluations
Evaluations Concepts
Concepts
Economic
EconomicEvaluations:
Evaluations:Introduction
Introduction
Supply
Supply––Demand
Demand
Monopoly
MonopolyVs VsMonopsony
Monopsony
Profit
Profit/ /Interest
Interest/ /Cash
CashFlow
Flow
Time
TimeValue
ValueofofMoney
Money/ /Equivalence
Equivalence
Price
PriceChanges
Changes
Discount
DiscountRates
Rates/ /Capitalized
CapitalizedCosts
Costs
Setting
SettingEvaluation
EvaluationPeriods
Periods/ /Selecting
SelectingDiscount
DiscountRate
Rate
Decision
DecisionChoices
Choices
Economic
EconomicEfficiency
Efficiency/ /Optimization
Optimization
Economic
EconomicFeasibility
Feasibility/ /Tools
Tools

2:
2: Economic
Concepts
Supply
Supply
isisthe
theamount
amountofofproducts
productsof ofservices,
services,goods
goodsand
and
works
worksthat
thatproducers
producersarearewilling
willingor
ormaking
making
available
availablefor
forsell
sellininthe
themarket.
market.
Demand
Demand
isisthe
theamount
amountof
ofproducts
productsofofservices,
services,goods
goodsand
and
works
worksthat
thatbuyers
buyersare
arewilling
willingororable
ableto
tobuy
buyfrom
from
the
themarket.
market.

2:
2: Economic
Concepts
Supply
Supply Curves
Curves
Are
Areoften
oftensloping
slopingupward
upwardbut butthere
thereare
areinstances
instances
when
whenthey
theyare
areconstant
constantandandsloping
slopingdownwards
downwards
after
afteraalimit
limitisisreached.
reached.
Demand
Demand
Are
Areoften
oftensloping
slopingdownwards
downwardsbutbutthere
thereare
are
instances
instanceswhen
whenthey
theyare
aresloping
slopingupwards
upwardsforfor
some
someinstances.
instances.

2:
2: Economic
Concepts
Simple
SimpleSupply
SupplyDemand
DemandCurve
Curve
Price
Supply
Demand
More products are produced when
prices are higher.
Greater Quantity is demanded

when prices are lower.
Quantity

2:
2: Economic
Concepts
Monopoly
MonopolyVs
VsMonopsony
Monopsony
•• Monopoly
Monopoly
–– Single
SingleSupplier
SuppliertotoMany
ManyBuyers
Buyers
•• Monopsony
Monopsony
–– Single
SingleBuyer
BuyertotoMany
ManySuppliers
Suppliers
Profit
Profit/ /Interest
Interest/ /Cash
CashFlow
Flow
•• Profit
Profit
–– Gross
GrossProfit
ProfitVs
VsNet
NetProfit
Profit
•• Interest
Interest
–– Simple
Simple(i(i==Prt)
Prt)Vs
VsCompound
CompoundInterest
Interest{F
{F==P(1+i)
P(1+i)}t}
t
–– Nominal (other than a year) Vs Effective Interest  ieff = (1+r/m)mm- 1

Nominal (other than a year) Vs Effective Interest  ieff = (1+r/m) - 1
•• Cash
CashFlow
Flow
–– IsIsaarepresentative
representativeofofmovements
movementsofofcash
cashover
overtime
time

2:
2: Economic
Concepts
Time
TimeValue
ValueofofMoney
Money/ /Equivalence
Equivalence
•• Time
TimeValue
ValueofofMoney
Money
–– Present
Presentand
andFuture
FutureWorth's,
Worth's,Annuity
Annuity
–– Single
SinglePayment,
Payment,Uniform
UniformSeries,
Series,Uniform
UniformGradient
GradientSeries
Series
•• Equivalence
Equivalence
–– Method
Methodused
usedtotocompare
comparedifferent
differentseries
seriesofofcash
cashflows
flowswith
withone
one
another on the same time frame
another on the same time frame
–– Equivalent
Equivalentdoes
doesnot
notreflect
reflectequality
equality
Price
PriceChanges
Changes
•• Purchasing
PurchasingPower
PowerofofMoney
Money
•• Current
CurrentVsVsConstant
ConstantMonetary
MonetaryValue
Value
•• Inflation
InflationVs
VsDeflation
Deflation
•• Consumer
ConsumerVs VsProduct
ProductPrice
PriceIndices
Indices

2:
2: Economic
Concepts
Discount
DiscountRate
Rate/ /Capitalized
CapitalizedCosts
Costs
•• Discount
DiscountRate
Rate
–– Converting
Convertingvalues
valuesfor
forequivalent
equivalenttimes
times(PV(PVororFV
FVororAnnuity)
Annuity)
–– Market
MarketVs
VsReal
Real(exclude
(excludeinflation
inflationorordeflation)
deflation)Discount
DiscountRates
Rates
–– Market
MarketDiscount
DiscountRate
RateforforCurrent
CurrentMoney
Money
–– Real
RealDiscount
DiscountRate
Ratefor
forConstant
ConstantMoney
Money
•• Capitalized
CapitalizedCost
Cost
–– Used
Used for
for investments
investments considered
considered for for evaluation
evaluation periods
periods ofof
perpetuity
perpetuitysuch
suchas ashighway
highwayprojects
projects
–– InInsuch
suchcases
casessimple
simpleinterest
interest takes
takes over
over the
thecompound
compound interest
interest
because when t  ∞; i(1+i) n/ {(1+i)n – 1} approaches i.
because when t  ∞; i(1+i)n/ {(1+i)n – 1} approaches i.
–– Equals
EqualsInitial
Initialinvestment
investment++Perpetual
Perpetualannual
annualcost
cost/ /i i

2:
2: Economic
Concepts
Setting
SettingEvaluation
EvaluationPeriod
Period/ /Selecting
SelectingDiscount
DiscountRate
Rate
•• Setting
SettingEvaluation
EvaluationPeriod
Period
–– Expected
Expectedlife lifetime
timefor
forproject
projectevaluation
evaluationororanalysis
analysis
–– Period
Periodover
overwhich
whichdecision
decisionbased
basedononwith
withororwithout
withoutthetheproject
project
situation is compared
situation is compared
–– Though
Thoughcivilcivilengineering
engineeringworks
worksare
areconsidered
consideredfor forperpetuity,
perpetuity,30
30
toto40 years can be used as an evaluation
40 years can be used as an evaluation period period
–– Evaluation
Evaluationperiods
periodscancanalso
alsobe
beassigned
assignedas aslow
lowasas55toto10
10years
years
taking into account projects residual value but not recommended
taking into account projects residual value but not recommended
•• Selecting
SelectingDiscount
DiscountRate
Rate
–– Related
Relatedtotowhen
whentotoconsume
consumeVs Vshow
howlong
longtotowait
waitforforthe
thebenefit
benefit
–– AA higher
higher discount
discount rate
rate will
will lead
lead lower
lower level
level ofof investment
investment and
and
higher consumption of resources
higher consumption of resources
–– Time
Timepreference
preference(2(2––66%),
%),Opportunity
Opportunitycosts
costsofofresources
resources(10
(10––
12
12 %),
%), Capital
Capital Rationing
Rationing (8(8 –– 15%),
15%), developed
developed economyeconomy (5(5 ––
10%),
10%),developing
developingeconomies
economies(min.(min.10%)
10%)

2:
2: Economic
Concepts
Decision
DecisionChoices
Choices
•• Technological
Technological Choices
Choices such
such as
as construction
construction or
or design
design
methods;
methods;components
componentsused;
used;etc
etc
•• Accept
Acceptor orReject
RejectChoices
Choices
•• Prioritization
PrioritizationChoices
Choicesbased
basedon
onresources
resourcesscarcities
scarcities
•• Delivery
DeliverySystem,
System,Procurement
ProcurementandandContracting
ContractingMethods,
Methods,
Contract
ContractTypes
TypesChoices
Choices
•• Location
Locationandand/ /or
orSize
SizeChoices
Choices
•• Timing
TimingChoices
Choices
•• Rent
Rentor orLease
Leaseor orOwn
OwnChoices
Choices
•• Integrated
Integrated/ /Hybrid
HybridChoices
Choices

2:
2: Economic
Concepts
Economic
EconomicEfficiency
Efficiency
•• AA Physical
Physical Infrastructure
Infrastructure isis economic
economic efficient
efficient ifif its
its
investment is feasible and at the same time feasible
investment is feasible and at the same time feasible than than
other
otheravailable
availableoptions.
options.
•• AAphysical
physicalinfrastructure
infrastructurewhich
whichwill
willyield
yieldgreater
greaterrevenue
revenue
but
but cost the same or less than the alternative route
cost the same or less than the alternative route
corridors;
corridors;isisthe
theeconomic
economicefficient
efficientchoice.
choice.
Economic
EconomicOptimization
Optimization
•• IsIsaaprocess
processininwhich
whicheconomic
economicanalysis
analysisisiscarried
carriedoutouttoto
determine
determine the
the most
most economically
economically efficient
efficient choice
choice among
among
alternatives using different economic optimization tools.
alternatives using different economic optimization tools.
•• Economic
Economic theory
theory determines
determines changes
changes inin utility
utility using
using the
the
concept of willingness to pay.
concept of willingness to pay.

2:
2: Economic
Concepts
Economic
EconomicFeasibility
Feasibility
•• Concerned
Concerned with
with the
the ways
ways inin which
which decisions
decisions concerning
concerning
economic
economic choices
choices between
between alternative
alternative investments,
investments,
methods
methods and
and resources
resources utilization
utilization maximizations
maximizations can can be
be
made
made
•• Deals
Dealswith
withtwo
twoaspects
aspectsofofeconomic
economicfeasibilities
feasibilities
–– Invest
InvestororDon’t
Don’tInvest
InvestororTry
TryAgain
Again(Go,
(Go,NoNoGo,
Go,May
MayGo!!!)
Go!!!)
–– Priorities
Prioritiesamong
amongororbetween
betweenalternatives
alternativeswhere
wherechoices
choicescan
canbe
be
• • Only One; or
Only One; or
• • Alternatives until consuming the financial constraints
Alternatives until consuming the financial constraints
•• Balances
Balances investments
investments which
which reduces
reduces cost
cost and
and expand
expand
incomes
incomestotothe
thesociety
societyas
asaawhole
whole

2:
2: Economic
Concepts
Economic
EconomicFeasibility
FeasibilityTools
Tools
Traditional
TraditionalMethods
Methods
•• Rate
RateofofReturn
Returnon
onCapital
Capital
–– Annual
Annualnet
netprofit
profit/ /Capital
Capitalinvested
invested
–– Lack
Lackconsideration
considerationfor fortime
timevalue
valueofofMoney
Money
•• Pay
PayBack
Back(PB)
(PB)or
orPay
PayOut
Out(PO)
(PO)
–– How
Howfast
fastcan
canthe
thegross
grosscapital
capitalinvested
investedbeberecovered
recoveredbybythe
thenet
net
cash
cashflow
flowduring
duringoperations
operations
–– Lack
Lackconsideration
considerationon onthe
theprofitability
profitabilityaspects
aspectsofofan
aninvestment
investment
after
afterpay
payback
backininaddition
additiontotothe
theTime
Timevalue
valueofofmoney
moneyand
andthe
the
timing
timingofofcash
cashflows
flows
–– Capital
CapitalInvested
Invested/ /Average
AverageNet
NetProfit
Profit

2:
2: Economic
Concepts
Economic
EconomicFeasibility
FeasibilityTools
Tools
Modern
ModernMethods
Methods
•• Life
LifeCycle
CycleCost
Cost(LCC)
(LCC)
–– Sums
Sumsofofall
allsignificant,
significant,time
timeadjusted
adjustedcosts
costsrelevant
relevantforforaaselected
selected
evaluation period – target is cost effectiveness
evaluation period – target is cost effectiveness
–– Suitable
Suitablewhen
whenfocus
focusisisononcosts
coststhan
thandetermining
determiningbenefits;
benefits;that
thatisis
benefits
benefits are
are assumed
assumed constant
constant among
among alternatives
alternatives (meet
(meet their
their
performance requirements) or subtracted from
performance requirements) or subtracted from costs costs
–– Effects
Effectsnot
notmeasurable
measurableare areassumed
assumeduniform
uniformamong
amongalternatives
alternatives
–– Lowest
LowestLCCLCCisisconsidered
consideredeconomically
economicallyfeasible
feasible
–– Not
Not recommended
recommended for for evaluating
evaluating investments
investments which
which generate
generate
significant
significant revenues or other benefits; prioritizing projects
revenues or other benefits; prioritizing projects
competing
competingfor foraalimited
limitedbudget
budget

2:
2: Economic
Concepts
Economic
EconomicFeasibility
FeasibilityTools
Tools
•• Net
NetBenefit
Benefitand
andNet
NetSaving
Saving(NB
(NB&&NS)NS)
–– Differences
Differencesbetween
betweentime
timeadjusted
adjustedbenefits
benefitsororsavings
savingsand
andcosts
costs
ofofcourses of actions – target is economic effectiveness
courses of actions – target is economic effectiveness
–– IfIfNB
NB>>0;0;the
theinvestment
investmentisiseconomic
economic
–– IfIfNB
NB==0;0;the
theinvestment
investmentisisas
asgood
goodas
asthe
thenext
nextbest
bestinvestment
investment
opportunity
opportunity
–– IfIfNB
NB<<0;0;the
theinvestment
investmentisisnon
noneconomic
economic
•• Benefit
BenefittotoCost
CostRatio
Ratio
–– Ratios
Ratiosofoftime
timeadjusted
adjustedbenefits
benefitsless
lessfuture
futurenon
noninvestment
investmentcosts
costs
totoinvestment costs – target is economic effectiveness
investment costs – target is economic effectiveness
–– IfIfBCR
BCR>>1;1;thetheinvestment
economic
–– Cost
Cost – Numerator / Benefits –Denominator
– Numerator / Benefits – Denominator
–– Can
Canbe beused
usedfor forall
alltypes
typesofofdecision
decisionchoices
choicesbutbutits
itsprimary
primaryuse
use
isisfor Priority based decisions when constrained by
for Priority based decisions when constrained by resources resources
–– Take
Takecarecarewhen
whenusedusedTechnology
Technologybased
baseddecision
decisionchoices
choices

2:
2: Economic
Concepts
Economic
EconomicFeasibility
FeasibilityTools
Tools
•• Internal
InternalRate
RateofofReturn
Return(IRR)
(IRR)
–– AAmeasure
measureofofyield
yieldon oninvestment
investment
–– Compared
Comparedwithwiththe
theMinimum
Minimumacceptable
acceptableraterateofofreturn
return(MARR)
(MARR)
–– IfIfIRR
IRR>>MARR;
MARR;the theinvestment
economic
–– Determining
DeterminingDiscount
Discountrateratethat
thatwill
willresult
resultthe
theNBNBatatPresent
PresentValue
Value
==00
–– Trial
Trialand
andError
Error++Graphical
Graphicalapproaches
approachescan canbebeused
usedtotodetermine
determine
the discount rate
the discount rate
• • + NB implies reduce the discount rate assumed and vise versa;
+ NB implies reduce the discount rate assumed and vise versa;
besides
besidesinterpolation
interpolationcan
canhelp
helpininminimizing
minimizingthe
thetrial
trialand
anderror
errorsteps
steps
–– Overstate
OverstateProfitability
ProfitabilityororBenefit
Benefit––Take
TakeCare
Care
–– Recommended
Recommendedfor forAccept
Accept/ /Reject
Rejectdecision
decisionchoices
choicesonly
only

2:
2: Economic
Concepts
Economic
EconomicFeasibility
FeasibilityTools
Tools
•• First
FirstYear
YearRate
Rateof
ofReturn
Return(FIRR)
(FIRR)
––AA measure
measureofof yield
yield on
on investment
investment during
duringthe
the opening
opening
year
year
––Benefit
BenefitCost
CostRatio
Ratioofofthe
thefirst
first/ /opening
openingyear
year
––Uses
UsesConcepts
Conceptssimilar
similartotoBenefit
BenefitCost
CostRatio
Ratiomethod
method
––Reasonable
Reasonable when when benefits
benefits are are not
not decreasing
decreasing over
over
the
thelife
lifeofofthe
theproject
projectdramatically
dramaticallyor orthe
thedifferences
differencesinin
development
development between between benefitbenefit components
components are are
relatively
relativelysmall
small
––They
Theyare arerecommended
recommendedfor forTransport
Transportprojects
projects
––Used
UsedininGreece
GreeceandandDenmark
Denmark

2:
2: Economic
Concepts
Economic
EconomicFeasibility
FeasibilityTools
Tools
• • Recommended
Recommended Economic
Economic Feasibility
Feasibility Tools
Tools for
for Highway
Highway
Infrastructures
Infrastructures(Rules
(RulesofofThumbs)
Thumbs)
Decision Choices Dependency Budget Constraint Criteria

Accept Projects NB in PV > 0
One out of Several Max NB in PV

Projects
Few of Many Projects Independent Yes BCR > 1
Independent No NB in PV > Max
Dependent Yes Max NB in PV
Dependent No Max NB in PV

2:
2: Economic
Concepts
Economic
EconomicFeasibility
FeasibilityTools
Tools
•• Recommended
Recommended Economic
Feasibility Tools
Tools for
for Highway
Highway
Infrastructures
Infrastructures(Rules
(RulesofofThumbs)
Thumbs)
–– Accept
Accept/ /Reject
Rejectdecision
decisionon
onaasingle
singleproject
project
• • NPV
NPVororNB,
NB,B/C
B/CororIRR
IRRwith
withMIRR
MIRRororagreed
agreeddiscount
discountrate
rate
–– Optimization
Optimizationamong
amongmutually
mutuallyexclusive
exclusivealternatives
alternatives
• • Maximize
MaximizeNPV
NPVororNB
NB
–– Prioritizing
Prioritizing among
among mutually
mutually independent
independent projects
projects subject
subject
totobudget
budgetconstraints
constraints
• • B/C
B/CRatio
Ratio

2:
2: Economic
Concepts
Economic
EconomicFeasibility
FeasibilityTools
Tools
• • Sensitivity
SensitivityTests
Tests/ /Analysis
Analysis
–– An
Ananalysis
analysiswhere
whereone
oneorormore
moreofofthe
thevariables
variablesarearemade
madetotovary
vary
and
andits
itsorortheir
theireffect
effectisisexamined
examinedtotoget
getbreak
breakeven
evenpoints
points
–– Values
Values ofof variables
variables made
made toto vary
vary are
are often
often results
results ofof initial
initial
forecasts
forecasts oror estimates
estimates oror predictions
predictions which
which are are considered
considered
uncertain
uncertain
–– The
The Outcomes
Outcomes ofof an an alternative
alternative analysis
analysis between
between oror among
among
alternatives
alternativesare arechanging
changingas asaaresult
resultofofthe
thechanging
changingvalues
valuesofof
the
thevariables
variables
–– Equivalent
EquivalentMonetary
MonetaryValue,
Value,often
oftenNPV;
NPV;isisused
usedfor
forcomparison
comparison
–– Sensitivity
Sensitivity analysis
analysis attempts
attempts toto establish
establish the
the sensitivity
sensitivity ofof
decisions
decisionsdepending
dependingon onthe
thechanges
changesininvalues
valuesofofvariables
variables

2:
2: Economic
Concepts
Additional
AdditionalConcepts
ConceptstotoConsider
Consider
Elasticity
Elasticity
• • Expression
Expression ofof aa change
change inin demand
demand as as aa consequence
consequence ofof aa
change
changeininone
oneofofthe
thefactors
factorswhich
whichinfluence
influencedemand
demand
• • Price
Price(negative)
(negative)VsVsIncome
Income(positive)
(positive)elasticity
elasticity
Transfer
TransferPayments
Payments
• • Financial
Financial (non
(non economical
economical when
when aa national
national economy
economy level
level isis
considered)
considered)payments
paymentsbetween
betweendifferent
differentparties
partieswithin
withindefined
defined
entity on whose behalf the economic analysis is
entity on whose behalf the economic analysis is done done
• • Taxes
TaxesandandSubsidies
Subsidiescancanbebetransfer
transferpayments
payments
Externalities
Externalities/ /Intangibles
Intangibles
• • They
Theyare
areconsequences
consequencesofofaadecision
decisionwhich
whichdoes
doesnot nothave
haveaa
market
marketorormoney
moneyprice
price
• • Voluntary
Voluntaryand
and un-priced
un-pricedworks
workscan
canbebeexternalities
externalities

2:
2: Economic
Concepts
Additional
AdditionalConcepts
ConceptstotoConsider
Consider
Sunk
SunkCosts
Costs/ /Opportunity
OpportunityCost
Cost
• • Already
Already incurred
incurred costs
costs which
which are
are irreversible
irreversible and
and could
could not
not be
be
affected by the decision are called Sunk Costs
affected by the decision are called Sunk Costs
• • Sunk
Sunk Costs
Costs are
are often
often related
related toto Rehabilitation
Rehabilitation and
and Upgrading
Upgrading
Projects
Projects
Best
BestEstimate
Estimateand
andContingencies
Contingencies
•• Cost
Costand
andBenefits
Benefitsshall
shallbe
bebest
bestestimates
estimatesand
andinclude
includecontingencies
contingencies
•• Physical
PhysicalVs
VsItem
Itembased
basedVsVsPrice
PriceContingencies
Contingencies
Depreciation
Depreciation
•• Financial
Financialdevice
devicetotoaccount
accountfor
forentity’s
entity’sassets
assetssubject
subjecttotowear
wear&&tear
tear
•• They
They are
are Neither
Neither Cost
Cost nor
nor Benefits
Benefits but
but their
their replacement
replacement oror
refurbishment
refurbishmentcosts
costsare
areCosts
Costs

2:
2: Economic
Concepts
Additional
AdditionalConcepts
Conceptsto
toConsider
Consider
Loans
Loans/ /Repayments
Repayments
•• Credits
Creditstotocarry
carryout
outthe
theproject
projectare
arecalled
calledloans
loans
•• Credit
Credit amounts
amounts plusplus interest
interest along
along agreed
agreed schedule
schedule ofof
paying
payingback
backisiscalled
calledrepayments
repayments
Shadow
ShadowPrices
Prices/ /Shadow
ShadowPricePriceFactor
Factor(SPF)
(SPF)
•• When
When economic
economic prices
prices differ
differ from
from financial
financial oror market
market
prices
prices
•• Prices
Prices which
which areare affected
affected byby market
market distortions
distortions such
such asas
monopoly
monopolyor orscarcity
scarcity
•• Use
UseofofSPF
SPFinincontrolled
controlledmarket
marketisisan
anaccepted
acceptedpractice
practice
totocater
caterfor
forshadow
shadowpricing
pricing
•• Taxes,
Taxes, duties
duties andand subsidies
subsidies areare indicatives
indicatives for for
determining
determiningshadow
shadowprice
pricefactors
factors

2:
2: Economic
Concepts
Additional
AdditionalConcepts
Conceptsto
toConsider
Consider
Public
Public/ /Private
Private/ /Merit
Merit/ /Demerit
DemeritGood
Good
•• Value
Value for for all
all but
but choice
choice for
for individuals
individuals isis public
public good;
good;
Value for who pays is a private
Value for who pays is a private good good
•• Value
Value decided
decided for for the
the good
good ofof the
the society
society such
such as as
minimum and maximum permissible
minimum and maximum permissible values is a merit values is a merit
good;
good;thosethosenot notpermissible
permissibleare aredemerit
demeritgoods
goods
Direct
Direct/ /Indirect
Indirect/ /Optional
Optional/ /Bequest
Bequest/ /Existence
ExistenceUse UseValues
Values
•• Directly
Directly benefiting
benefiting isis aa direct
direct use
use Value;
Value; Functional
Functional
benefits can be indirect
benefits can be indirect values values
•• Values
Valuesleft leftatatthe
thediscretion
discretionofofchoices
choicesofofindividuals
individualsthen
then
itit isis an optional use value; Values open for
an optional use value; Values open for the future the future
considerations,
considerations, itit isis aa bequest
bequest useuse value
value andand Values
Values ofof
environmental
environmentalininnature naturecan
canbe beexistence
existenceuse
usevalues
values

2:
2: Economic
Concepts
Additional
Additional Concepts
Concepts to
to Consider
Consider
Valuation
Valuation
•• Direct
DirectConstruction
ConstructionCosts
Costs
•• Marketable
MarketableBenefits
Benefits
•• Non
Nonmarketed
marketedcost
costand
andbenefits
benefits
•• Depletion
Depletionandandscarcity
scarcityof
ofresources
resources
•• Distribution
Distributionbetween
betweengroups
groupsofofpeople
people

2:
2: Economic
Concepts
II--2.
2. Look
Lookinto
into
•• The
Themajor
majordifferences
differencesand
andsimilarities
similaritiesbetween
between
Economic
Economicand
andCost
CostEffectiveness
EffectivenessEvaluations!!!
Evaluations!!!
•• Compare
CompareEconomic
EconomicEvaluation
EvaluationTools
Toolsand
and
determine
determinewhich
whichtool
toolisisbetter
betterfor
forthe
thedifferent
different
decision
decisionchoices!!!
choices!!!
Identify
IdentifyBenefit
Benefitand
andCost
CostComponents
Componentsfor
forHighway
Highway
Projects!!!
Projects!!!

II--3:
3:Highway
Infrastructures
OUTLINE
OUTLINE
Functional
FunctionalRoad
RoadClassifications
Classifications
Road
RoadInfrastructure
InfrastructureElements
Elements
Other
OtherRoad
RoadInfrastructure
InfrastructureClassifications
Classifications
Design
Design//Construction
ConstructionRequirements
Requirements
Transport
TransportServices
Services
Road
RoadInfrastructure
InfrastructureRelated
RelatedProblems
Problems

I-3:
I-3:Highway
Infrastructures
•• Functional
FunctionalRoad
RoadClassifications
Classifications
––Purpose
Purpose
•• To
To subdivide
subdivide the
the road
road system
system into
into manageable
manageable
categories
categoriesor
orroad
roadclasses
classes
––IsIs important
important for
for Network
Network Planning
Planning inin two
two
perspectives
perspectives
•• Vehicle
Vehicle Mobility
Mobility toto ensure
ensure Continuous
Continuous Traffic
Traffic
Movement,
Movement, Suitable
Suitable Travel
Travel Speed,
Speed, Vehicle
Vehicle
Operation
OperationEconomy,
Economy,Safety
Safetyand
andComfort
Comfort
•• Accessibility
Accessibility to
to residents
residents and
and other
other land-uses
land-uses
totoensure
ensurethe
thedesired
desiredtrip
tripends
ends

3:
3: Highway
Highway Infrastructures
Infrastructures
•• Functional
FunctionalRoad
RoadClassifications
Classifications
Road Types
Motor Ways Other Roads
Aim
Aimatathigh
high Characterized
Characterized
vehicle
vehiclemobility
mobility by
bylow
lowtravel
travel
and
andless
lessaccess
access speed
speedand
andmore
more
access
access

3:
3: Highway
Infrastructures
•• Motorway
MotorwayRoads
Roads
––Consist
Consist ofof travel
travel lanes
lanes separated
separated by
by central
central reserve
reserve
when
whenprovided
providedand andother
otherroad
roadelements
elements
––Meant
Meant for
for high
high speed,
speed, cross
cross country
country or or regional
regional
services
serviceswith
withminimum
minimumaccess
accesstotointer
inter––city
citymobility
mobility
•• Other
OtherRoads
Roads
––May
May consist
consist travel
travel lanes
lanes with
with reserves;
reserves; especially
especially inin
urban
urbanroads,
roads,butbutare
arenotnotmeant
meantfor forhigh
highspeed
speedtravels
travels
––Meant
Meant for
for high
high provision
provision ofof access
access toto distributions
distributions ofof
networks
networks

3:
3: Highway
Infrastructures
•• Functional
FunctionalRoad
RoadClassifications
Classifications
Road Types
Urban Roads Rural Roads
Classification
Classificationofof Classification
Classificationisis
streets
streetsisismore
more relatively
relativelyeasier
easier
complicated
complicated

3:
3: Highway
Infrastructures
•• Functional
FunctionalRoad
RoadClassifications
Classifications(Rural
(RuralRoads)
Roads)
Road Types
Arterial / Trunk Collectors / Local / Feeder

Roads Links Roads
Mobility
Accessibility

3:
3: Highway
Infrastructures
•• Functional
FunctionalRoad
RoadClassifications
Classifications
––IsIs aa planning
planning tool
tool and
and should
should not
not be
be confused
confused with
with
administrative
administrative and and legal
legal classifications
classifications indicating
indicating
public
publicauthorities
authoritiesresponsibilities
responsibilities
––Highest
Highest functional
functional classification
classification will
will have
have highest
highest
design
designstandard
standardandandtraffic
trafficcapacity
capacity
––Design
Designstandard
standardandandtraffic
trafficcapacity
capacityofofaaroad
roadshould
should
bebeininreasonable
reasonablebalance
balancewithwiththe
thetravel
traveldemand
demand
––Makes
Makes the the structure
structure ofof the
the road
road and
and street
street system
system
and
andtheir
theirconnections
connectionswithwiththe
thesurrounding
surroundinglandscape
landscape
and
andurban
urbanareas
areasmore
moreconducive.
conducive.

3:
3: Highway
Infrastructures
•• Functional
FunctionalRoad
RoadClassifications
Classifications
Ethiopia USA UK Denmark
Trunk Arterial Principal Trunk C.I: Nat. & Int.
Link Arterial Minor Link C. I CII: Major Reg.
Main Access Collectors Link C. II CIII: Regional
Collectors Locals Link C. III CIV: Locals
Feeders
––Indicates
Indicates the
the type
type ofof traffic
traffic toto be
be served,
served, access
access
control
control desirable,
desirable, junctions
junctions andand distances
distances between
between
them.
them.

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
Elements
––Carriageways
Carriageways
• • Part
Partofofaaroad
roadway
wayincluding
includingthe
thevarious
varioustraffic
traffic and
andauxiliary
auxiliary
lanes
lanesbut
butexcluding
excludingshoulders
shoulders
––Traffic
TrafficLanes
Lanes
• • Part
Partofofcarriageways
carriagewaysintended
intendedfor
forstreams
streamsofoftraffic
trafficininboth
both
directions
directionswhich
whichare
aredemarcated
demarcatedby
byroad
roadmarkings
markings
––Shoulders
Shoulders
• • Part
Partofofthe
theroad
roadoutside
outsideofofthe
thecarriageway
carriageway(substantially
(substantiallyatat
the
thesame
samelevel)
level)used
usedfor
forsupporting
supportinglaterally
laterallythe
thecarriageway
carriageway
and
andemergency
emergencyparking
parkingofofvehicles
vehicles

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
Elements
––Foot
FootPath
Path
• • Walk
Walk ways
ways reserved
reserved for
for humans
humans along
along and
and parallel
parallel toto the
the
main drive ways
main drive ways
––Cycle
CyclePath
Path
• • Paths
Paths reserved
reserved for
for cycling
cycling along
along and
and parallel
parallel toto the
the main
main
driveways
driveways
––Bus
BusLane
Lane
• • Lane
Lane reserved
reserved for
for Buss
Buss driveways
driveways with
with their
their parking
parking
provisions
provisions
––Parking
Parking
• • Provided
Providedeither
eitheras
asstreet
streetkerb
kerbororoff
off- -street
streetparking
parking

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
Elements
––Central
CentralReserve
Reserve
• • Separation
Separationstrips
stripsbetween
betweentwo
twoopposite
oppositeways
waysofofmovements
movements
• • Can
Can also
also be
be used
used for
for beautification
beautification purposes
purposes using
using
plantations
plantations
––Edge
EdgeStrip
Strip
• • Lanes
Lanes provided
provided forfor emergency
emergency landings
landings for
for vehicles
vehicles
encountering problems for a short period of time
encountering problems for a short period of time
––Right
RightofofWay
Way
• • Strip
Strip ofof land
land legally
legally awarded
awarded toto Road
Road Administering
Administering Body
Body
requiring permission for development or any interferences
requiring permission for development or any interferences

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
Elements
––Road
RoadIntersections
Intersections
• • The
Thejoining
joiningororcrossing
crossingofoftwotwoorormore
moreroadsroadswhich
whichare
areused
used
for
for safe
safe canalization
canalization ofof traffic
traffic (3,
(3, 44 oror multi
multi leg
leg oror rotary
rotary
intersections
intersectionsforforatatgrade
gradeandandgrade
gradeintersections
intersectionsand andwith
withoror
without
withoutcanalizations)
canalizations)
• • At
At––Grade
GradeSeparation
Separationwith
withoutoutCanalizations
Canalizations
3 - Way 4 - Way
Multi Leg

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
Elements
––Road
RoadIntersections
Intersections
• • At
At––Grade
GradeSeparation
Separationwith
withCanalizations
Canalizations(Flared
(FlaredororRotary
Rotaryoror
Turning)
Turning)

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
Elements
––Road
RoadIntersections
Intersections
• • Grade
GradeSeparation
Separation(Trumpet
(TrumpetT;T;Y; Y;Partial
PartialClover
CloverLeaf;
Leaf;Clover
Clover
Leaf;
Leaf;Diamond;
Diamond;Directional
Directionaland
andRotary)
Rotary)
• • Three
ThreeWay
WayJunctions
Junctions/ /Junctions
JunctionsofofMajor
Majorand
andMinor
MinorRoads
Roads/ /
Junctions
Junctions ofof two
two major
major roads
roads / / Junctions
Junctions ofof more
more than
than two
two
major
majorroads
roads
• • Geometric
GeometricDesign
DesignManual;
Manual;ERA,
ERA,2002 2002

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
Elements
––Bridges
Bridges/ /Culverts
Culverts
• • Overpass
Overpass ways
ways toto overcome
overcome obstructions
obstructions oror forfor better
better
canalization
canalizationofofhighways
highwaysusing
usinggrade
gradeseparations
separations
• • Can
Can vary
vary from
from aa simple
simple pedestrian
pedestrian toto aa major
major suspension
suspension
bridge
bridge
• • Culverts
Culvertsare
aresmaller
smalleroverpass
overpassways
ways
––Tunnels
Tunnels
• • Under
Underororthrough
throughpass
passwayswaystotoovercome
overcomeobstructions
obstructionsororfor
for
better
bettercanalization
canalizationofofhighways
highwaysusing
usinggrade
gradeseparations
separations
––Retaining
Retainingand
andSide
SideDrainage
DrainageStructures
Structures

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
Elements
––Urban
UrbanAreas
Areas
• • Street
Streetand
andPath
PathTypes
Types
––Separated Vs Non-separated
Separated Vs Non-separated
––With or Without Parking
With or Without Parking
––With or Without Cycle Paths
With or Without Cycle Paths
––With or Without Bus Lane
With or Without Bus Lane
–– With or Without Foot Paths
With or Without Foot Paths
• • Intersections
Intersections
––Signalized Vs Unsignalized Intersections
Signalized Vs Unsignalized Intersections
––Prioritized Vs Non – Prioritized Intersections
Prioritized Vs Non – Prioritized Intersections
––Round Abouts
Round Abouts
––Canalized and Grade Separation Intersections
Canalized and Grade Separation Intersections
• • Terminals;
Terminals;Parking
ParkingAreas;
Areas;Trip
TripEnds
Ends

3:
3: Highway
Infrastructures
•• Other
OtherRoad
RoadInfrastructure
Classifications
––Road
RoadSurface
SurfaceTypes
Types
• • Paved
Paved
––Asphalt Concrete
Asphalt Concrete
––Asphalt
Asphalt
• • Unpaved
Unpaved
––Gravel
Gravel
––Cleared
Cleared
––Road
RoadCondition
Condition(Roughness
(RoughnessIndex)
Index)
• • Very
VeryGood
Good
• • Good
Good
• • Satisfactory
Satisfactory
• • Poor
Poor

3:
3: Highway
Infrastructures
•• Other
OtherRoad
RoadInfrastructure
Classifications
––Road
RoadConstruction
ConstructionOptions
Options
• • Rehabilitation
Rehabilitation
• • Upgrading
Upgrading
• • New
NewConstruction
Construction
• • Maintenance
Maintenance
––Routine; Periodic; Special; and Major
Routine; Periodic; Special; and Major
––Terrain
TerrainConsiderations
Considerations
• • Flat
Flat
• • Rolling
Rolling
• • Mountainous
Mountainous
• • Escarpment
Escarpment
• • Mixed
Mixed

3:
3: Highway
Infrastructures
•• Design
ConstructionConsiderations
Considerations
––Determination
Determinationofofstandards
standards
• • Rural
RuralVersus
VersusUrbanUrbanRoads
Roads
• • Depends
Dependson onAADT
AADT/ /DHV
DHV
• • Width
Width(Carriageway,
(Carriageway,Shoulder)
Shoulder)
• • Design
DesignSpeed
Speed
• • Sight
SightDistance
Distance
• • Curves
Curves(Hz,
(Hz,Transition);
Transition);Crest
Crest/ /Sag
Sag
• • Gradient
Gradient/ /Super
SuperElevation
Elevation
• • Cross
Cross––fall
fall(Normal
(Normal/ /Shoulder)
Shoulder)
• • Right
RightofofWay
Way
• • Etc.
Etc.

3:
3: Highway
Infrastructures
•• Design
ConstructionConsiderations
Considerations
––Capacity
Capacity Versus
Versus Plus
Plus Safety
Safety and
and Cost
Cost Oriented
Oriented
design
designprinciples
principles
––Route
RouteCorridor
CorridorSelection
Selection
––Desired
DesiredSpeed
SpeedandandSpeed
SpeedReducer
ReducerUses
Uses
––Environmentally
EnvironmentallyAdapted
AdaptedConsiderations
Considerations
––Procurement
ProcurementandandContract
ContractConsiderations
Considerations
––Construction
ConstructionMethods
MethodsConsiderations
Considerations
––Long
LongTerm
TermLand
Landuse
useapproach
approach

3:
3: Highway
Infrastructures
•• Transport
TransportServices
Services
––Motorized
Motorized/ /Non
Non--Motorized
Motorizedtransport
transportservices
services
––Rail
Rail/ /Road
Road/ /Air
Air/ /Water
WaterBased
BasedTransport
TransportServices
Services
––Land
Land/ /Sub
SubWay
Way/ /AirAir/ /Water
WaterWays
WaysTransport
TransportServices
Services
––Freight
Freight/ /Public
PublicTransport
Transport/ /Private
PrivateCars
Cars
––Transport
TransportDensities
Densities
• • Freight:
Freight: Tonne
Tonne––KMKM
• • Private
PrivateCars:
Cars: Vehicle
Vehicle––KMKM
Vehicles
Vehiclesper
per1000
1000populations
populations
• • Public
PublicTransport:
Transport: Person
Person- -KM
KM

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
RelatedProblems
Problems
––Extensive
ExtensiveInvestment
InvestmentCost
Cost
––Maintenance
Maintenanceand andOperation
Operation
––Vehicle
VehicleOperation
OperationCost
Cost
––Travel
TravelTime,
Time,Traveling
TravelingLength
Length
––Traffic
TrafficSafety,
Safety,Accidents
Accidents
––Mobility,
Mobility,Access,
Access,Congestion
Congestion
––Noise,
Noise,Air
AirPollution
Pollution
––Barrier
Barrier Effects,
Effects, Road
Road Roughness,
Roughness, Passability,
Passability,
Trafficability
Trafficability
––Other
OtherEnvironmental
EnvironmentalIssues
Issues

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
RelatedProblems
Problems
––Transport
TransportServices
ServicesRelated
RelatedProblems
Problems
• • Congestion
Congestion (long
(long travel
travel timetime ++ delays
delays inin movement,
movement,
inadequate
inadequate capacity traffic jams,
capacity traffic jams, waste
waste ofof fuels,
fuels, waste
waste ofof
time,
time,unproductive
unproductiveefforts
effortsininregulating
regulatingtraffics)
traffics)
• • High
HighUser
UserCosts
CostsandandHigh
Highfacility
facilitycost
cost++Low
LowRateRateofofReturn
Return
• • Lack
LackofofSafety
Safetyfor
forusers
users
• • Requirements
Requirementsof ofuser
useroperation
operation
• • Lack
LackofofPrivacy
Privacy
• • Discomfort
Discomfort

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
RelatedProblems
Problems
––Transport
TransportServices
ServicesRelated
RelatedProblems
Problems
––Problem
ProblemDomain
DomainAffected
Affectedby
byTransportation
Transportation
––Problem
ProblemDomain
DomainAffecting
AffectingTransportation
Transportation

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
RelatedProblems
Problems
––Problem
ProblemDomain
DomainAffected
AffectedBy
ByTransport
Transport
• • Air
AirPollution
Pollution
• • Noise
Noise
• • Visual
VisualIntrusion
Intrusion&&Poor
PoorAppearance
Appearance/ /Aesthetics
Aesthetics
• • Inordinate
Inordinatechanges
changesininland
landvalues
values
• • Inappropriate
InappropriateororUndesirable
Undesirableland
landdevelopment
development
• • Moral,
Moral,Religious,
Religious,Biological
Biologicalrelated
relatedproblems
problems
• • Unequal
Unequalimpact
impactupon
uponcertain
certainpopulation
populationgroups
groups

3:
3: Highway
Infrastructures
•• Road
RoadInfrastructure
RelatedProblems
Problems
––Problem
ProblemDomain
DomainAffecting
AffectingTransport
Transport
• • Population
PopulationGrowth
Growthand
andDispersion
Dispersion
• • Increased
IncreasedVehicles
VehiclesOwnership
Ownership
• • Peak
Peakhours
hoursand
andTiming
TimingofofTravel
Travel
• • Inordinate
Inordinatechanges
changesininland
landvalues
values
• • Inappropriate
Inappropriateor
orUndesirable
Undesirableland
landdevelopment
development
• • Moral,
Moral,Religious,
Religious,Biological
Biologicalrelated
relatedproblems
problems
• • Unequal
Unequalimpact
impactupon
uponcertain
certainpopulation
populationgroups
groups

3:
3: Highway
Infrastructures
II--3.
3. Look
Lookinto
into
The
TheFunctional
FunctionalRoad
RoadClassifications
Classificationsof
ofother
other
Developing
DevelopingCountries!!!
Countries!!!
Different
DifferentDesign
DesignStandards
Standardsof ofHighway
Highway
Structures!!!
Structures!!!
Planning
Planningand
andEconomic
EconomicEvaluation
EvaluationConsiderations
Considerations
for
forAA
AAGrade
GradeSeparation
SeparationJunctions!!!
Junctions!!!

PART
PARTII:
II:Highway
HighwayTransport
TransportPlanning
Planning&&
Investment
InvestmentAnalysis
Analysis
4.
4. Transport
TransportPlanning
Planning--

 Importance
Importance
5.
5. Transport
Transport Planning
Planning && Investment
Investment
Analysis
Analysis
6.
6. Tools
Tools –– Cost
Cost//Benefit
BenefitAnalysis
Analysis
and
andHDM
HDM

IIII--4:
4:Why
WhyTransport
TransportPlanning
Planning&&Economic
Economic
Evaluations?
Evaluations?
 Consumes
Consumesconsiderable
considerablepublic
publicinvestment
investment
 Contributes
Contributes toto the
the Social,
Social, Economical,
Economical, Political
Political and
and
Technological
TechnologicalDevelopment
Development of ofaanation
nationor
orregion
regionoror
……
 Access
AccesstotoEducation
Educationand
andHealth
Healthservices
services
 Create
CreateMarket
MarketPotentials
Potentials
 Facilitate
FacilitateCommunity
CommunityInteractions
Interactions
 Technology
TechnologyTransfer
Transfer/ /Industrialization
Industrialization
 Minimize
MinimizeTransportation
TransportationRelated
RelatedProblems
Problems
 Improve
Improvethe
theEnvironment
Environment

4.
4.Why
WhyTransport
TransportPlanning
Planning&&Economic
EconomicEvaluations?
Evaluations?
•• Main
MainObjectives
Objectives//Goals
Goals
–– Goals
Goalsarearedesired
desiredends
endsexpressed
expressedininbroadest
broadestsense
sense
derived
derived from
from aa consideration
consideration ofof values
values  conducive
conducive
for
for further
further development
development ofof objectives,
objectives, alternative
alternative
approaches,
approaches,action
actionplanplanincluding
includingschedules
schedules
–– Value
Valueisisananelement
element ofof aashared
sharedsymbolic
symbolicsystem
system  
Improved
Improvedquality
qualityofoflife;
life;….
….
–– Transportation
TransportationGoals
Goals
•• Serve
Serveusers
usersfor
foraccess,
access,mobility,
mobility,or
orreduction
reductionof
ofprice;
price;
•• Rational
Rational arrangement,
arrangement, amenity,
amenity, variety
variety and
and ease
ease ofof
conduct
conductofofTransport
TransportNetworks;
Networks;andand
•• Conservation
Conservationof ofnatural
naturaland
andartificial
artificialresources.
resources.

4.
4.Why
WhyTransport
TransportPlanning
Planning&&Economic
Evaluations?
 Main
MainObjectives
Objectivesinindetail
detail
 Reduce
ReduceCongestion
Congestion/ /Traffic
TrafficBarrier
Barrier
 Reduce
ReduceTravel
TravelTime
Time
 Reduce
ReduceVehicle
VehicleOperation
OperationCost
Cost
 Reducing
ReducingAccidents
Accidents
 Reducing
ReducingNoise
Noise
 Reduce
ReduceAir
AirPollution
Pollution
 Direct
Directimpact
impacton
oneconomic
economiclife,
life,trade
tradeand
andindustry
industry
 Linking
LinkingRegions,
Regions,Nations
Nationsand
andLocal
LocalCommunities
Communities
 Providing
ProvidingMobility
Mobility

4.
4.Why
WhyTransport
TransportPlanning
Planning&&Economic
Evaluations?
 Main
MainObjectives
Objectivesinindetail
detail
 Prosperity
Prosperity
 Accessibility
Accessibility/ /Better
BetterCommunication
Communication
 Cohesion
Cohesion––Facilitate
FacilitateCommunity
CommunityInteractions
Interactions
 Environment
Environmentand andSafety
Safety
 Creation
CreationofofJobs
Jobs
 Trade Liberalizations
TradeLiberalizations Globalization
Globalization
 Social
SocialServices
ServicesProvisions
Provisions
 Demographic
DemographicDevelopments
Developments
 Urbanizations
Urbanizations
 Technological
Technologicaldevelopments
developments
 Security
Security

4.
4.Why
WhyTransport
TransportPlanning
Planning&&Economic
Evaluations?

 Decision
DecisionMaking
Making
 Accept
AcceptororReject
RejectaaProject
Project
 Accept
Acceptand
andPrioritize
PrioritizeProjects
Projects
 Choose
Chooseor orPrioritize
PrioritizeRoute
Routecorridors
corridors
 Choose
Chooseor orPrioritize
Prioritizeamong
amongthethedelivery
deliverysystems
systems
 Establishing
EstablishingOperation
OperationandandMaintenance
MaintenancePolicies
Policies
 Choose
Chooseamong
amongalternative
alternativeinvestments
investments
 Devise
DeviseImplementation
Implementationand andMonitoring
MonitoringPlans
Plans

4.
4.Why
WhyTransport
TransportPlanning
Planning&&Economic
Evaluations?

 Transport
TransportPlanning
Planning
 To
Toidentify
identifytransport
transportneeds
needs//objectives
objectives
 To
Toidentify
identifyBenefits
Benefitsand
andCosts
Costs
 To
Toensure
ensurefeasibility
feasibilityof
ofinvestments
investments
 To
Tochoose
chooseamong
amongalternative
alternativeinvestments
investments
 To
Todevise
deviseImplementation
Implementationand andMonitoring
MonitoringPlans
Plans

4:
4:Why
WhyTransport
TransportPlanning
Planning&&Economic
EconomicEvaluation?
Evaluation?
IIII--4.
4. Look
Lookinto
into
Identify
Identifythe
theVision,
Vision,Mission
Missionand
andMain
MainGoals
Goals//
Objectives
ObjectivesofofERA
ERAand
andAA
AARoad
RoadAuthority!!!
Authority!!!
Identify
IdentifyIntegrations
Integrationsand
andDifferentiations
Differentiationsof
of
ERA
ERAandandETA!!!
ETA!!!

IIII--5:
5:Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
 Transport
TransportPlanning
PlanningProcess
Process
 Problem
Problem/ /Need
NeedFormulation
Formulation
 Identify
Identifyand
andInvolve
InvolveStakeholders
Stakeholders
 Identify
Identify––Recognize
Recognize––Articulate
ArticulateNeed
Need/ /Problem
Problem
 Prioritize
PrioritizeNeeds
Needs/ /Problems
Problems
 Objectives
Objectives/ /Output
Output--Outcome
OutcomeFormulations
Formulations
 Develop
DevelopAlternatives
Alternatives
 Set
Setup
upPlan
PlanProposals
ProposalsororStrategies
Strategies
 Define Constraints
Define Constraints
 Forecast
ForecastConsequences
Consequences
 Appraise
Appraise/ /Compare
Comparethe theproposed
proposedalternatives
alternatives
 Choose
Chooseand
and/ /ororPrioritize
Prioritizethe
thebest
bestalternative
alternative(s)
(s)
 Prepare
Prepare Action
Action Plan
Plan for
for Implementation;
Implementation; Monitoring
Monitoring and
and
Follow up
Follow up

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
•• Transport
TransportPlanning
PlanningModels
Models
–– Predictive
PredictiveModels
Models
•• Transport
TransportDemand,
Demand,Generation
Generationand
andAttractions
Attractions
–– Descriptive
DescriptiveModels
Models
•• Traffic
TrafficNetworks,
Networks,Capacity,
Capacity,Operation,
Operation,Safety
Safetyand
and
Environmental
EnvironmentalImpacts
Impacts
–– Normative
NormativeModels
Models
•• Economic
EconomicEvaluations
Evaluationsand
andInvestment
InvestmentCriteria
Criteria
–– Technological
TechnologicalModels
Models

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
Predictive
Predictiveand
andDescriptive
DescriptiveModels
Models
•• Transport
TransportSupply
Supplyand
andDemand
Demand
–– Highway
HighwayInfrastructure
Infrastructureas
asthe
theSupply
SupplySide
Side
•• Aggregate
Aggregate measure
measure ofof Traffic
Traffic Volume
Volume (TV),
(TV), Network
Network
Capacity (NC) and Operational Rules
Capacity (NC) and Operational Rules (OR) (OR)
•• NC
NC==f1f1(OR,
(OR,Level
LevelofofInvestment
Investment––LI)
LI)
•• Supply
Supply==f2f2(TV,
(TV,OR,
OR,LI)LI)
–– Desire
Desirefor
forthe
themovement
movementofofpeople
peopleand
andgoods
goodsininthe
theroad
road
network as the Demand Side
network as the Demand Side
•• Aggregate
Aggregate measure
measure ofof Network
Network Distribution
Distribution (ND)
(ND) and
and
Transport Supply (TS)
Transport Supply (TS)
•• Demand
Demand==f3f3(ND,
(ND,TS)
TS)
–– Balancing
Balancing Supply
Supply and
and Demand
Demand isis the
the Principle
Principle ofof
Economic
EconomicEquilibrium
EquilibriumTheory
Theory
•• Supply
Supply
Demand
Demand

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
Predictive
Predictiveand
andDescriptive
DescriptiveModels
Models
•• Transport
TransportSupply
Supplyand
andDemand
Demand
–– ND
ND and
and TVTV isis relatively
relatively constant
constant for
for short
short term
term
considerations
considerations
•• OR
OR and
and LILI are
are then
then the
the determinant
determinant factors
factors for
for Transport
Transport
Supply and Demand Management
Supply and Demand Management
•• Focus
Focuson
onOR OR optimization
optimizationofoftraffic
trafficflows,
flows,reducing
reducingtraffic
traffic
accidents, etc
accidents, etc
–– Short Term Transport System Management
Short Term Transport System Management
•• LILI
Network
NetworkDevelopment,
Development,Increasing
IncreasingNetwork
NetworkDistribution,
Distribution,
Balancing Traffic Volume
Balancing Traffic Volume
–– Long Term Transport System Management
Long Term Transport System Management
•• Balancing
BalancingDemand
Demandand
andSupply
Supply
–– Forecast Traffic Volume; Carry Out Congestion Analysis
Forecast Traffic Volume; Carry Out Congestion Analysis
–– Focus on OR for Optimum Utilization
Focus on OR for Optimum Utilization
–– Forecast LI and Propose Network Development
Forecast LI and Propose Network Development

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
Predictive
Predictiveand
andDescriptive
DescriptiveModels
Models
•• Transport
TransportSupply
Supplyand
andDemand
Demand
Predictive Model Descriptive Model
Transport Demand Transport Supply
Inventory
• Existing land use and socio • Existing Network Characteristics
economic characteristics – OR focus
• Trip generation and pattern
Analysis
• Forecast land use and socio • Origin - Destination (OD) Network
economic characteristics Development
• Forecast trip distributions – LI focus
• Transport mode analysis

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
Descriptive
DescriptiveModels
Models
•• Traffic
TrafficCapacity
Capacityand
andLevel
Levelof
ofService
Service
–– First
FirstLink
Linkand
andJunction
JunctionCapacity
Capacity
•• Link Uninterrupted
Link Uninterrupted
–– TV in number of vehicles / hr = Velocity in km / hr x Density in
TV in number of vehicles / hr = Velocity in km / hr x Density in
number
numberofofvehicles
vehicles/ /km
km
–– Velocity = f (Density) = A – (B x D)
Velocity = f (Density) = A – (B x D)
V TV TV
A A2/4B A2/4B
A/B D A/2B A/B D A/2 A V

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
Descriptive
DescriptiveModels
Models
•• Junction Interrupted
Junction Interrupted
–– Incoming / Outgoing Vehicle / hr
Incoming / Outgoing Vehicle / hr
–– Is a function of the movement pattern (non signalized,
Is a function of the movement pattern (non signalized,
Signalized,
Signalized,round
roundabout,
about,etc)
etc)
•• Level
Levelof
ofService
Service
–– Differentiates
Differentiatesvarious
variousstates
statesofoftraffic
trafficoperations
operations
–– Link
LinkUninterrupted
Uninterrupted
•• Operating
OperatingSpeed
SpeedVs
VsTV
TV/ /NC
NCRatio
Ratio
NC Limits  Unstable Flow
Mutually Congestion
TV / NC
Exclusive Forced Flow
Free Flow
Operating Speed

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
Descriptive
DescriptiveModels
Models
•• Generation
Generationand
andAttractions
Attractions
–– Functions
FunctionsofofTrip
TripDistribution,
Distribution,Number
NumberofofResidences
Residencesand
and
Office and Shopping Areas
Office and Shopping Areas
–– Methods
Methods
•• Category
CategoryAnalysis
Analysis
–– Households stratification for future forecast
Households stratification for future forecast
– Data intensive
– Data intensive
•• Regression
RegressionAnalysis
Analysis
–– Causal relationships based on socio economic developments
Causal relationships based on socio economic developments
– Statistical estimations
– Statistical estimations
•• Environmental
EnvironmentalConsiderations
Considerations
–– Noise
Noiseand
andAir
AirPollution
Pollution
–– Damage
DamageVsVsControl
ControlCosts
Costs

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
Descriptive
DescriptiveModels
Models
•• Growth
GrowthFactor
FactorModel
Model
–– Total Traffic ==Present Traffic ++Normal Traffic Growth ++Newly Created
Total Traffic
ororGenerated Present
Traffic + Traffic
Developed Normal
Traffic Traffic Growth Newly Created
Generated Traffic + Developed Traffic
• Normal Traffic Growth is due to increased number of inhabitants and car
• Normal Traffic Growth is due to increased number of inhabitants and car
density
density
• Newly Created or Generated Traffic is due to improved condition of the road
• Newly Created or Generated Traffic is due to improved condition of the road
• Developed Traffic is due to location development
• Developed Traffic is due to location development
•• Gravity
GravityModel
Model
–– Trip Production, Generation and Attraction  Trip Distribution Modal
Trip
Split Production,
Future Generation
Traffic Volume and Attraction  Trip Distribution Modal
Split Future Traffic Volume
•• Logit
LogitModel
Model Modal
ModalChoices
Choicesbased
basedon
onUtility
UtilityTheory
Theory
•• Simultaneous
SimultaneousModels
Models Both
BothSupply
Supplyand
andDemand
Demand
•• Matrix
Matrix Estimation
Estimation Methods
Methods   successive
successive adjustment
adjustment ofof existing
existing
matrix using traffic counts on a segment in the network
matrix using traffic counts on a segment in the network
•• Comprehensive
ComprehensiveTransport
TransportModel
Model
•• GIS
GISbased
basedTransport
TransportModels
Models

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
Normative
NormativeModels
Models
•• Socio
Socio––Economic
EconomicViability
Viabilityof
ofaaHighway
Highway
infrastructure
infrastructureinvestment
investment
–– Positive
PositiveConsequences
Consequences>>Negative
NegativeConsequences
Consequences
–– Benefits
Benefits>>Costs
Costs
•• Prioritizing
Prioritizingfor
foraalimited
limitedbudget
budget
•• Assessment
Assessmentof ofvarious
variousalternatives
alternatives

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
•• Evaluation
EvaluationFrameworks
Frameworks
–– Cost
CostBenefit
BenefitAnalysis
AnalysisFramework
Framework
•• Denmark,
Denmark,Greece,
Greece,Ireland,
Ireland,Portugal,
Portugal,Spain,
Spain,Germany,
Germany,Italy
Italy
and UK
and UK
–– Multi
MultiCriteria
CriteriaFramework
Framework
•• France,
France,Belgium,
Belgium,Netherlands
Netherlands
•• Operation
OperationResearch
ResearchthanthanEconomic
EconomicBased
Based
•• Use
UseofofMulti-Criteria
Multi-Criteriacomparison
comparisontable
table(France)
(France)
•• Five
FiveWeighted
WeightedCriteria
Criteriawith
withseveral
severalindicators
indicators(Netherlands)
(Netherlands)
resulting
resulting in Project Effects, Weights and Evaluationmatrices
in Project Effects, Weights and Evaluation matrices
•• European
EuropeanEvaluation
EvaluationMethod
Method

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
•• Evaluation
EvaluationFrameworks
Frameworks
–– Combined
CombinedSystemic
Systemic--Systematic
SystematicFramework
Framework
Systemic Systematic
Scanning Soft System Methodology Scenario Techniques
Problem Situation  Root Cause Spectrum of possible future
 Conceptual Models  states
Comparisons  Changes 
Actions
Assessment Multiple Perspectives Weight and Rank

Rational, Organizational and Procedure
Personal Perspectives

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
•• Transport
TransportRelated
RelatedBenefits
Benefitsand
andCosts
Costs
Benefits Costs
Reduced Travel Time & / or Travel Length Resources Used
(70 – 90 %) Construction Costs
Reduced VoC Operation Costs
Fuel, Oil, Tyre, Maintenance, Maintenance Costs
Depreciation, Capital Environmental Damages
Environment Improvement Control Costs
Reduced Noises & Air Pollution Disruptions and Diversions
Visual Impact & Ecological Effects
Reduced Accidents / Traffic Safety
Material and Personal Side
Location / Spatial Benefits
Accessibility, Barrier Effects
Employment Effects

Transport
TransportPlanning
Planningand
andEconomic
EconomicEvaluations
Evaluations
•• Decision
DecisionChoices
Choices
–– Accept
Accept/ /Reject
Reject
–– Ranking
Ranking

5:
5:Highway
HighwayPlanning
Planningand
andInvestment
InvestmentAnalysis
Analysis
IIII--5.
5. Look
Lookinto
into
HOME
HOMETAKE
TAKEEXAM
EXAM(30
(30Points+10
Points+10
presentation+10
presentation+10questions)
questions)
Identify,
Identify,Map,
Map,Diagnose
Diagnosethe
the Highway
HighwayPlanning
Planningand
and
Investment
InvestmentAnalysis
AnalysisProcess
Processof
ofERA!!!
ERA!!!
Hint:
Hint:Check
Checkthe
theSeven
SevenCharacteristics
Characteristicsof
ofPlanning
Planning
Concepts
Conceptsdefined
definedininPart
PartIIand
andthe
theTransport
Transport
Planning
PlanningProcess
Processdescribed
describedhere!!!
here!!!

IIII--6.1:
6.1:Cost
Cost--Benefit
BenefitAnalysis
Analysis
•• Types
Types
–– Financial
FinancialCBA
CBA
• • Concerns
Concerns withwith the
the financial
financial position
position ofof highway
highway
project(s)
project(s)regardless
regardlessofofprice
pricereflection
reflectionfor
fortrue
truevalue
value––
excludes
excludesprice
pricedistortions
distortions
–– Economic
EconomicCBA
CBA
• • Concerns
Concernswith
withthe
thewelfare
welfareofofaadefined
definedgroup.
group.
• • Considers
Considersprice
pricedistortions
distortionsresulting
resultingininshadow
shadowprices
prices
• • Entails
Entailsdirect
directestimations
estimationsthan
thanadjusting
adjustingfinancial
financialprices
prices
–– Social
SocialCBA
CBA
• • Concerns
Concerns with
with subjective
subjective applications
applications ofof value
value
judgments to reflect priorities and policies
judgments to reflect priorities and policies

6.2:
6.2:Cost
Cost--Benefit
BenefitAnalysis
Analysis
•• Price
Price are
are signals
signals that
that mediate
mediate the
the
optimization
optimizationof
ofresources
resourcesallocation
allocation

6.1:
6.1:Cost
Cost--Benefit
BenefitAnalysis
Analysis
•• Basic
BasicStages
Stages
–– Define
Definethe
thedecisions
decisionstotobe
beconsidered
considered
•• Purpose;
Purpose;with
withororwithout
withoutproject
projectcases
cases
–– Define
DefineStakeholders
Stakeholders
–– Decide
DecideEvaluation
EvaluationCriteria
Criteria
•• Project
Project Life,
Life, Discount
Discount Rate,
Rate, Categories
Categories ofof Costs
Costs and
and
Benefits,
Benefits,Quantifying
Quantifyingand andValuing
ValuingCosts
Costsand
andBenefits,
Benefits,
and
and Adjustments
Adjustments forfor shadow
shadow prices,
prices, omissions
omissions ofof
transfer
transferpayments,
payments,etc.
etc.
–– Calculate
Calculatethe
theBenefits
Benefitsand
andCosts
Costs
–– Determine
Determinethe
theNet
NetBenefit
Benefit

IIII--6.2:
6.2:Highway
HighwayDevelopment
Development&&Maintenance
Maintenance
•• Developments
Developments
–– Highway
HighwayCost
CostModel,
Model,MIT;
MIT;1972
1972
•• Road
RoadWorks
Worksand
andVehicle
VehicleOperation
OperationCosts
Costs
–– Road
RoadTransport
TransportInvestment
InvestmentModel,
Model,TRRL;
TRRL;1977
1977
–– Highway
HighwayDesign
Designand
andMaintenance
MaintenanceModel;
Model;First
First
Version,
Version,MIT;
MIT;1979
1979
–– RTIM2,
RTIM2,TRRL;
TRRL;1982
1982
–– HDMIII,
HDMIII,WB;
WB;1987
1987
–– RTIM3,
RTIM3,TRRL;
TRRL;1993
1993
–– HDM
HDM--QQand
andHDM
HDMManager
Manager
–– HDM
HDM--44

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
HDM
HDM--44
•• Incorporate
Incorporate Vehicle
Vehicle technology
technology impacts
impacts on
on
vehicle
vehicleoperation
operationcost
costafter
after1980s
1980s
•• Additional
AdditionalCapabilities
Capabilities
–– Traffic
TrafficCongestion
CongestionEffects
Effects
–– Cold
ColdClimate
ClimateEffects
Effects
–– Wider
WiderRange
RangeofofPavement
PavementTypes
Typesand
andStructures
Structures
–– Road
RoadSafety
Safety
–– Environmental
EnvironmentalEffects
Effects

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
HDM
HDM -- 44
Highway
Highway Management
Management Process
Process
•• Planning
Planning
•• Programming
Programming
•• Preparation
Preparation
•• Operations
Operations

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
•• Programming
Programming
–– Multi-Year
Multi-YearRoad
RoadWorks
Worksand
andExpenditure
ExpenditureProgram
Program
–– Analysis
Analysis andand Selection
Selection ofof Road
Road networks
networks forfor
Maintenance,
Maintenance,Improvement
Improvementand andNew
NewConstruction
Construction
–– Economic
Feasibility ofof Each
Each SetSet ofof Works
Works areare
determined;
determined;Eg:Eg:Cost
CostBenefit
BenefitAnalysis
Analysis
–– The
The Physical
Physical Road
Road Network
Network isis considered
considered here
here on
on aa
link
link –– by
by –– link
link basis;
basis; Links
Links are
are characterized
characterized by
by
homogeneous pavement sections defined in terms of physical
homogeneous pavement sections defined in terms of physical
attributes
attributes
–– Expenditure
Expenditure Estimate
Estimate for
for different
different road
road types
types and
and
sections
sections
–– Prioritization
Prioritization ofof Road
Road Works
Works due due toto Budget
Budget
Constraints
Constraints

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
•• Preparation
Preparation
–– Short
Short -- Term
Term Planning
Planning Stage
Stage where
where Road
Road
Works
Worksarearepackaged
packagedforforimplementation
implementation
–– Design
Design andand Tender
Tender Documents
Documents including
including
detail
detailcost
costestimating
estimatingisiscarried
carriedout
out
–– Detail
DetailCost
Cost--Benefit
BenefitAnalysis
Analysisisiscarried
carriedout
out
–– Works
Works on on Adjacent
Adjacent Road
Road Sections
Sections will
will be
be
packaged
packagedforforcost
costeffectiveness
effectiveness

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
•• Operations
Operations
–– Ongoing
OngoingOperations
Operationsofofan
anOrganization
Organization
–– Continuous
ContinuousDecisions
Decisions
•• Scheduling,
Scheduling, Monitoring,
Monitoring, Recording
Recording Work
Work Completed
Completed and
and
Feed
FeedBack
Back
Time Spatial Data Computer

Stage Horizon Responsible Coverage Detail Application
Planning Long Term Top Mang’t Network Wide General Automatic
Programming Mid Term Mid - Mang’t Network / SN
Preparation Short Term Low - Mang’t Sections
Operations Immediate Low - Mang’t Sub - Sections Detail Interactive

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
Management
ManagementCycle
Cycle
•• Need
NeedBased
BasedApproach
Approach
–– Knowledge
Knowledgeofofthe
theContent;
Content;Structure
Structureand
andCondition
Conditionofof
Roads
Roads
•• Budget
BudgetPeriod
PeriodCycle
Cycle
•• Cycle
Cycle of
of Activities
Activities with
with inin the
the Highway
Highway
Management
ManagementProcess
Process

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
Management
ManagementCycle
Cycle
Policies
Performance
Monitoring Highway Mang’t Info Classification
•Inventory & Standards
•Conditions
•Resources
•Treatments
•Productivity
•Unit Costs
Implementation
•Economic Parameters Needs
Assessment
Finance &
Resources

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
Management Cycle - Management Function
Function Descriptions HDM - 4 Application
Planning Strategic Analysis System
Network Planning System Strategy Analysis
Pavement Management System
Programming Program Analysis System
Pavement Management System Program Analysis
Budgeting System
Preparation Project Analysis System
Pavement Management System
Bridge Management System Project Analysis
Pavement / Overlay Design system
Contract Procurement System
Operations Project Management System
Maintenance Management System None
Equipment Management System Use Others
Financial Management System
6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
Analytical
AnalyticalFramework
Framework
•• Based
BasedononPavement
PavementLife
LifeCycle
CycleAnalysis
Analysis(15
(15--40
40years)
years)
•• Effects
EffectsPredicted
Predicted
–– Road
RoadDeteriorations,
Deteriorations,
–– Road
RoadWorks
WorksEffects,
Effects,
–– Road
RoadUsers
UsersEffects,
Effects,
–– Socio
Socio- -Economic
EconomicEffects
Effects
•• Factors
Factorsfor
forDeteriorations
Deteriorations
–– Traffic
TrafficLoading,
Loading,Environmental
EnvironmentalWeathering,
Weathering,Inadequate
InadequateDrainage
Drainage
Systems,
Systems,Maintenance
Maintenancetotorepair
repairdefects
defects
•• International
International roughness
roughness index
index shows
shows the
the performance
performance ofof
pavements
pavements--Deteriorations
Deteriorations

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
Analytical
AnalyticalFramework
Framework
•• Road
RoadUsers
UsersCosts
Costs
––Vehicle
Vehicleoperation
operationCosts,
Costs,
––Travel
TravelTime
TimeCosts,
Costs,
––Road
RoadAccidents
AccidentsCosts,
Costs,
––Costs
Costsfor
forSocial
Socialand
andEnvironmental
Environmentaleffects
effects
•• For
Forboth
bothmotorized
motorizedand
andnon
non––motorized
motorizedtransport
transport
•• Economic
EconomicBenefits
Benefits
––Costs
CostsofofConstruction
ConstructionVs
VsBase
BaseCase
Case

HDM-4 System Architecture
Data Managers Analysis Tools
Road Vehicle Road HDM Project ProgramStrategy

Network Fleet Works Config.
Core Models
Import/Export CoreData
Data
Import/Export Vehicle Fleets
Vehicle Fleets HDM-4 model
Road Networks
Road Networks libraries can be
Road Works
Road Works used in other systems
transfer data Projects RDWE RUC SEC
transfer data Projects
with external Programmes
with external Programmes
systems Strategies
systems Strategies
External
Systems
Databases,
PMS, etc.
Sponsors
Department for International Development (DFID)
Asian Development Bank (ADB)
Swedish National Road Administration (SNRA)
The World Bank (IBRD)
Steering Committee
(The World Bank)
Other Technical
Contributors Secretariat Advisors
The University
of Birmingham
DFID ADB SNRA FICEM

The University N D Lea Int. SweRoad ICH (Chile)
of Birmingham IKRAM VTI Catholic Univ.
6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
HDM
HDM--44Applications
Applications
Step
Step1:1:Strategic
StrategicAnalysis
Analysis
–– Entire
EntireRoad
RoadNetwork
NetworkAsset
Asset
–– Road
RoadNetworks
Networks(Fundamental
(FundamentalUnit
UnitofofAnalysis)
Analysis)
• • Main or Trunk Road Network
Main or Trunk Road Network
• • Municipal or Town Road Network
Municipal or Town Road Network
• • Rural or Feeder Road Network
Rural or Feeder Road Network
–– Sub
SubNetworks
Networks
• • Motor Ways, Paved, Regions, Other classes, etc
Motor Ways, Paved, Regions, Other classes, etc
–– Individual
IndividualRoads
Roads
–– Sections,
Sections,Links
Linksand
andNodes
Nodescan
canbe beused
usedasasdata
dataentries
entriesfor
forRoad
Road
Networks
Networks
–– Sections
Sections are
are considered
considered homogeneous
homogeneous for for uniform
uniform strength,
strength,
geometry, and traffic and condition characteristics
geometry, and traffic and condition characteristics

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
HDM
HDM--44Applications
Applications
Step
Step1:1:Strategic
StrategicAnalysis
Analysis
–– Road
RoadNetwork
NetworkMatrix
Matrix
• • Pavement Performance against Users Costs
Pavement Performance against Users Costs
• • Typical categories can be
Typical categories can be
– Traffic Volume or Loading (High, Medium, Low)
– Traffic Volume or Loading (High, Medium, Low)
– Pavement Types (AC, A, Gr)
– Pavement Types (AC, A, Gr)
– Pavement Conditions (Good, Fair, Poor)
– Pavement Conditions (Good, Fair, Poor)
– Environment or Climatic Zone (Wet/cold, Normal/Temperate, Dry/ hot)
– Environment or Climatic Zone (Wet/cold, Normal/Temperate, Dry/ hot)
– Functional Classification (Trunk, Municipal, Rural)
– Functional Classification (Trunk, Municipal, Rural)
–– Includes
Includes
• • M - LT forecast of funding Requirements
M - LT forecast of funding Requirements
• • LT forecast of Road network Performance
LT forecast of Road network Performance
• • Optimal Allocation (Development Vs Maintenance - Periodic and
Optimal Allocation (Development Vs Maintenance - Periodic and
Routine)
Routine)

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
HDM
HDM--44Applications
Applications
Step
Step2:
2:Program
ProgramAnalysis
Analysis
––Prioritization
Prioritizationalong
alongone
oneor
ormulti
multiyear
yearwork
workprogram
programusing
using
Incremental
IncrementalNPV NPV/ /Cost
Costratio
ratio
––Road
Road links
links and
and sections
sections are
are physically
physically identified
identified and
and
considered
considered
––Optimizing
Optimizing an an objective
objective functions
functions under
under budget
budget
constraint
constraint
––Selection
Selectioncriteria
criteria
• • Development
DevelopmentStandard
Standard- -upgrade
upgradefor
for200
200traffic
traffic/ /day
day
• • Maintenance
Maintenanceimprovement
improvement
• • Periodic
PeriodicMaintenance
MaintenanceThreshold
Threshold––reseal
reseal@@20 20%%damage
damage
• • Improvement
ImprovementThreshold
Threshold––volume
volume/ /capacity
capacityratio
ratio

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
HDM
HDM--44Applications
Applications
Step
Step3:
3:Project
ProjectAnalysis
Analysis
––Evaluating
Evaluating one
one or
or more
more road
road projects
projects or
or investment
investment
options
optionstotodetermine
determineeconomic
economicindicators
indicators
––Economic
Economicor orEngineering
Engineeringviability
viabilityincluding
including
• • Structural
Structuralperformance
performance
• • Life
Lifecycle
cyclecosts
costs(deterioration
(deteriorationand
andworks
workseffects)
effects)
• • Road
Roadusers
userscost
costand
andbenefits
benefits
• • Comparisons
Comparisons
––Typical
Typicalprojects
projects
• • Maintenance
Maintenance and
and Rehabilitations;
Rehabilitations; Widening
Widening oror Geometric
Geometric
improvements; Pavement Upgrading and New Constructions
improvements; Pavement Upgrading and New Constructions
––Road
Roadusers
userscosts
costsinclude
includeimpacts
impactson
onroad
roadsafety
safety

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
HDM
HDM--44Modules
Modules
•• Overall
OverallStructure
StructureData
DataManagers
Managers
––Road
RoadNetwork
Network
• • Defines
DefinesPhysical
PhysicalCharacteristics
Characteristics
––Vehicle
VehicleFleet
Fleet
• • Defines
DefinesVF
VFCharacteristics
Characteristicson
onthe
theroad
road
––Road
RoadWorks
Works
• • Defines
Definesmaintenance
maintenanceand
andimprovement
improvementstandards
standardswith
withtheir
theirunit
unit
costs
costs
––HDM
HDMConfiguration
Configuration
• • Define
Defineunique
uniquedata
databy
bymodifying
modifyingdefault
defaultones
ones

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
HDM
HDM--44Modules
Modules
•• Technical
TechnicalAnalysis
AnalysisModels
Models
––Road
RoadDeterioration
Deterioration(RD)
(RD)
• • Predict
Predictfor
forPavement,
Pavement,Concrete
Concreteand
andUnsealed
UnsealedRoads
Roads
––Works
WorksEffects
Effects(WE)
(WE)
• • Determine
DeterminePavement
PavementConditions
Conditionsand
andtheir
theirCosts
Costs
––Road
RoadUser
UserEffects
Effects(RUE)
(RUE)
• • Determine
DetermineVehicle
VehicleOperation,
Operation,Road
RoadAccidents
Accidentsand
andTravel
TravelTime
Time
––Social
Socialand
andEnvironmental
EnvironmentalEffects
Effects
• • Determine
DetermineVehicle
Vehicleemissions
emissionsand
andEnergy
EnergyConsumption
ConsumptionCosts
Costs

6.2:
6.2:Highway
HighwayDevelopment
DevelopmentModel
Model
HDM
HDM--44Modules
Modules
•• Interfaces
Interfaces
––Databases
Databases
• • Import
Import/ /Export
ExportInterfaces
Interfaces
––Technical
TechnicalModels
Models
• • External
ExternalSystems
Systems
•• Vehicle
VehicleFleet
FleetData
DataRequirements
Requirements
––Vehicle
VehicleSpeed
Speed
––Operating
OperatingCosts
Costs
––Travel
TravelTime
TimeCosts
Costs
––etc
etc

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10/21/20 Jekale CM Consultancy 1

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Objectives Inputs Activities Outputs

Utility and Sustainability

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Greater Quantity is demanded

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–– Nominal (other than a year) Vs Effective Interest  ieff = (1+r/m)mm- 1

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Decision Choices Dependency Budget Constraint Criteria

One out of Several Max NB in PV

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Motor Ways Other Roads

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Urban Roads Rural Roads

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Arterial / Trunk Collectors / Local / Feeder

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