Highway Engineering Ch3 Appraisal of Highways

HIGHWAY ENGINEERING • Do nothing: comparing their performance
against the current situation

Prepared by GENEROSO, FRANZ of (Group 1-
TEAM MACHO) • Do minimum: low cost upgrading of the
existing facility
Chapter 3: Scheme Appraisal for Highway Cost-Benefit Analysis (CBA)
Projects • This is a fundamental step in the CBA
• Appraisal – judging the value condition, process where the decision-makers
value or importance of something. compile a list of all relevant feasible
• Decision Maker/Personal experience - has options that they wish to be assessed.
broader perspective than • Feasible: refers to options that, on a
financial/investment concentrating on preliminary evaluation and viable courses
effects to developer of action that can be brought to
completion given the constraints imposed
Decision Making Framework of Highway on the decision-maker such as lack of
scheme: time, information and resources.
1. Problem Recognition – the decision- Procedures for identifying project options:
maker determines that a problem exists 1. Personal experience or decision maker
and that a decision must be reflected on. 2. Current problem vs. previous problem
2. Goal Identification – The decision-details 3. Examining relevant literature
the desired result or outcome of the Identifying all relevant cost and benefits:
process. 1. Reductions in vehicle operating costs
3. Identification of alternative highway 2. Savings in time
schemes – different potential solutions are 3. Reduction in the frequency of accidents.
assembled prior to their evaluation. 4. Impacts considered within Highway Cost-
4. Information research – the decision-maker Benefit Analysis (CBA):
seeks to identify characteristics • Positive or negative changes in the
associated with the alternative solutions. environment.
5. Assessment of information on alternative • The loss or improvement of
highway schemes – the necessary for recreational facilities
making a decision regarding the preferred Economic Life, Residual Value and Discount
option together and considered. Rate:
6. Selection of preferred highway schemes – • States that:
a preferred option is selected by the 1. Life of the project
decision maker or implementation in the 2. Substantial cost or benefit
future. 3. Discount rate
7. Evaluation - the decision is assessed a Use of economic indicators to assess basic
period of time after its implementation in economic viability:
order to evaluate it on the basis of its • Methodology for Measures of Worth
achieved results. 1. Net Present Value (NPV)
Economic Appraisal of Highway Schemes: 2. Internal Rate of Return (IRR)
The “Do nothing” and “Do minimum” 3. Benefit/Cost Ratio (B/C)
COBA Computer Program: Co = the initial construction cost of the highway
• 30 year period determines: project
1. Need for improving highway route NAS = net annual savings
2. Level of priority
Environmental Highway Appraisal Scheme:
3. Optimal timing of the scheme
4. Aid in presentation viable highway ❖ The 12 environmental impacts forming the
options assessment framework are:
5. Establish optimal junction and link 1. Air Quality
designs by comparing economic 2. Cultural Heritage
performance. 3. Construction disturbance
Advantage and Disadvantages of Cost-benefit 4. Ecology/Natural conservation
analysis: 5. Landscape effects
❖ Advantages 6. Land Use
• Common unit of measurement 7. Traffic Noise and Vibration
• Has the broader perspective than 8. Pedestrian, cyclist and community
financial/investment concentrating on effects
effects to developer. 9. Vehicle travelers
• Given that the focus of the method is on 10. Water quality and drainage
benefits and costs of highway in question 11. Geology and Soils
to the community as a whole. 12. Policies and plans
❖ Disadvantages The New Approach to Appraisal (NATA)
• Confusions of the original primary purpose ❖ The combination of Cost-Benefit Analysis
with its secondary consequences. (CBA) and Environmental Appraisal
• More suitable for comparing highway
Reference: Highway Engineering by Martin
proposal design, than evaluating the
Rogers ©2003
absolute desirability of one project.
Payback Analysis
States that:
❖ Privately funded highway projects
❖ Recovery of construction cost
❖ Equalization of initial cost and money
earned (playback time)
❖ Speedy payback
❖ Provides investment to other project easily
❖ Lower risk
Payback period Formula:
𝐶
1. 𝑁𝑃 = 0
𝑁𝐴𝑆
Where:
Np = Payback Period

Highway Engineering Ch3 Appraisal of Highways

Uploaded by

Copyright:

Available Formats

Highway Engineering Ch3 Appraisal of Highways

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Highway Engineering Ch3 Appraisal of Highways

Uploaded by

Copyright:

Available Formats

HIGHWAY ENGINEERING • Do nothing: comparing their performance

against the current situation

You might also like