3 Project Appraisal Concerned with the economic justification
of a project defined by other means. Project types New
construction, upgrading Reconstruction, resealing Widening, lane
addition Economic indicators Net Present Value (NPV) Internal Rate
of Return (IRR)
Slide 4
4 Gravel Road with 300 AADT Current Policy (Without Project) -
Routine maintenance - Gravel resurfacing when thickness of gravel
is less than 50mm - Grading every 182 days Proposed Project (With
Project) - Upgrade the road to a paved standard - After upgrading,
routine maintenance, patching 100% of the potholes, and resealing
when damaged area > 20% Paving a Gravel Road Two Project
Alternatives
Slide 5
5 Roughness Progression
Slide 6
6 Evaluation Period = 20 years Discount rate = 12.00 % ----
Present Values ---------------- Internal Construction & Road
Net Rate of Length Maintenance User Total Present Return (km) Alt.
Costs Costs Costs Value (%) 10.0 Without 0.18 5.10 5.28 With 1.75
3.10 4.85 0.43 15.5 Is the project economically justified?
Comparison of Alternatives
Slide 7
7 Net Economic Benefits
Slide 8
8 Project Formulation Concerned with the economic comparison of
project alternatives to better define the project. Compares many
project alternatives, e.g. Surface Types Surface Thicknesses
Geometric standards Timing of intervention Compares alternatives in
terms of net benefits and agency costs (economic efficiency
frontier graph)
Slide 9
9 - Regravel and grading every 182 days - Upgrade in 2006 -
Upgrade in 2007 - Upgrade in 2008 - Upgrade in 2009 Optimal Timing
for Paving Gravel Road with 300 AADT Many Project Alternatives
Slide 10
10 Which is the optimal alternative? Economic Efficiency
Frontier
Slide 11
11 Maintenance Policy Optimization Concerned with finding an
optimal maintenance policy and funding for a given road class. User
defines road classes in terms of condition and traffic A series of
condition responsive road works are evaluated The alternative with
highest NPV is identified along with the recurrent and capital
resources needed to implement the alternative
Slide 12
12 A Paved Road in Fair Condition - Reconstruction when
roughness > 8.0 IRI - 40 mm overlay when roughness > 3.0 IRI
Asphalt Road Maintenance - All include routine maintenance and
patching 100% of potholes - 40 mm overlay when roughness > 4.0
IRI - 40 mm overlay when roughness > 5.0 IRI - 80 mm overlay
when roughness > 3.0 IRI - 80 mm overlay when roughness > 4.0
IRI - 80 mm overlay when roughness > 5.0 IRI - 25 mm reseal when
damaged area > 10% - 25 mm reseal when damaged area > 20% -
25 mm reseal when damaged area > 30%
Slide 13
13 Roughness Progression
Slide 14
14 Which is the optimal maintenance policy? Economic Efficiency
Frontier
Slide 15
15 Road Works Programming Objective: prioritise candidate road
projects in each year within annual budget constraint Annual
budgets obtained from strategic maintenance plan Concerned with the
preparation of single or multi- year road work and expenditure
programmes under specified budget constraints.
Slide 16
16 Procedure Use specified standards to screen network &
identify candidate projects, e.g. road sections which exceed
specified condition roads with inadequate capacity pavements which
need strengthening upgrade pavements with high traffic volumes
Determine maintenance or improvement options Specify budget limits
& periods Optimise using selected objective Produce optimal
list of projects for budget period
Slide 17
17 Evaluation of Road Sections Homogeneous Road Sections Good
Condition Roads - Reseal 25 mm in 2006 - Reseal 25 mm in 2007 -
Reseal 25 mm in 2008 - Reseal 25 mm in 2009 Fair Condition Roads -
Overlay 40 mm in 2006 - Overlay 40 mm in 2007 - Overlay 40 mm in
2008 - Overlay 40 mm in 2009 - Overlay 80 mm in 2006 - Overlay 80
mm in 2007 - Overlay 80 mm in 2008 - Overlay 80 mm in 2009 Poor
Condition Roads - Overlay 80 mm in 2006 - Overlay 80 mm in 2007 -
Overlay 80 mm in 2008 - Overlay 80 mm in 2009 - Overlay 100 mm in
2006 - Overlay 100 mm in 2007 - Overlay 100 mm in 2008 - Overlay
100 mm in 2009
Slide 18
18 Unconstrained Work Program
Slide 19
19 Constrained Work Program
Slide 20
20 Work Program Output 2003 2004 2005
Slide 21
21 Network Strategy Analysis Objectives: Determine budget
allocations for road maintenance and improvement Prepare for work
programmes Determine long term network performance Assess impact on
road users Concerned with the analysis of entire road networks to
determine funding needs and/or to predict future performance under
budget constraints
Slide 22
22 Strategic Planning Forecast scenarios of revenues &
available budget Assess current condition of assets Forecast
traffic demands (from road network plan) Evaluate impact of
strategies on performance and costs - using predictive model
Optimize strategies under alternative budget scenarios - maximize
NPV for each scenario Determine multi-year program allocations
& performance
Slide 23
23 Road Network GFP L M H A.C. Resource Constraints Optimal
Program under Budgetary Constraints Program without Budgetary
Constraints Optimization Module Strategic Planning Approach Matrix
of Road Classes
Slide 24
24 Diagnostic of the Network Condition
Slide 25
25 Diagnostic of Road User Costs
Slide 26
26 Diagnostic of Agency Costs
Slide 27
27 Diagnostic of Road Classes
Slide 28
28 Solution Catalog per Budget Level
Slide 29
29 Consequences to Society
Slide 30
30 Consequences to the Network
Slide 31
31 Consequences to the Agency
Slide 32
32 Consequences to the Users
Slide 33
33 Support Definition of Budget Level
Slide 34
34 Support for Allocation of Resources Maintenance Budget ($m)
Primary Roads FlexibleGravel Secondary Roads FlexibleGravel Region
North East South West 45.918.7 34.613.5 52.121.0 27.220.4 34.521.8
24.911.8 45.021.8 19.512.3
Slide 35
35 Optimal Budget Requirements
Slide 36
36 Support for Programming of Works
Slide 37
37 Standards & Policies Road pricing road use costs (to
define fuel levies) congestion charges weight-distance charges
Vehicle regulations axle load limits energy consumption, vehicle
emissions & noise Engineering Standards sustainable road
network size pavement design and maintenance standards Concerned
with specific studies designed to define rational technical
standards and vehicle policies
Slide 38
38 400300200 What is the optimal traffic threshold for paving?
Technical Standards
Slide 39
39 How much road damage is caused by trucks? Vehicle
Policies