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Evaluation of Low Volume Roads

Evaluation of Low Volume Roads. Rodrigo Archondo-Callao Senior Highway Engineer, ETWTR January 10, 2008. The World Bank. World Bank Technical Paper No. 496. Road Transport. “Tracks”. “Roads”. “Highways”. Functional Classification. Primary Road Network. Roads with 2 or more lanes

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Evaluation of Low Volume Roads

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  1. Evaluation of Low Volume Roads Rodrigo Archondo-CallaoSenior Highway Engineer, ETWTRJanuary 10, 2008 The World Bank

  2. World Bank Technical Paper No. 496

  3. Road Transport “Tracks” “Roads” “Highways”

  4. Functional Classification

  5. Primary Road Network • Roads with 2 or more lanes • Paved roads • Traffic greater than 500 AADT • Long distance traffic • Essentially serves an economic function • Focus is the reduction of transport costs Cost Benefit Analysis (CBA) using the HDM-4 model

  6. Secondary Road Network • Road with 1.5 to 2 lanes • Unpaved roads or paved roads • Traffic less than 500 AADT • Medium distance traffic • Economic and social function • Focus is the reduction of total transport costs, measuring also the social impact Cost Benefit Analysis (CBA) using RED model or HDM-4 model

  7. Tertiary Road Network • Roads with 1 to 2 lanes • Unpaved roads and tracks • Traffic lower than 50 AADT difficult to measure • Short distance traffic • Essentially serves a social function • Focus is the social impact, measuring the efficiency of the investments and/or a multi-criteria index Cost Efficiency Analysis (CEA) or Multi- Criteria Analysis (MCA)

  8. Analytical Instruments • Cost Benefit Analysis (CBA) • Net Present Value • Cost Efficiency Analysis (CEA) • Total Beneficiary Population per Investment • Multi Criteria Analysis (MCA) • Priority Index

  9. Cost Benefit Analysis (CBA) Total Society Costs Road User Costs Government Costs Improve Standard CBA

  10. Comparison of Alternatives with CBA • To compare project alternatives, the Net Present Value is used to select the optimal alternative (the one with higher NPV) and to eliminate project that are not economically feasible (NPV<0) • The Internal Rate of Return (IRR) or the Benefit/Cost and NPV/Investment ratios are not recommended to compare project alternatives Alternatives NPV 0.03.76.75.5 Project Optimal Alternative:Higher NPV CBA

  11. Comparison of Projects with CBA • To compare the economic priority of projects, it is recommend the use of the indicator NPV per Investment or a budget constraint optimization algorithm, such as EBM-32 contained on the HDM-4 and RED models. PRIORITY Selected Alternative OverlayReseal Overlay NPV / Investment 8.45.2 2.1 Projects CBA

  12. Projects Eligibility with CBA • To define if a project is eligible, it is recommended to utilize the NPV (NPV > 0) or the IRR (IRR > x%), at a given x% discount rate. NPV IRR 42.2 25%25.4 17% -5.5 9% Projects Eligible Not Eligible CBA

  13. Cost Efficiency Analysis (CEA) • It compares the cost of interventions with its predicted impacts and it is used in the situations where the benefits cannot be measured in monetary terms, or where the measurement is difficult. • It includes provisions that (a) the objectives of the intervention are indicated and are clearly part of a ampler program of objectives (such as reduction of the poverty); and (b) the intervention represents the smaller cost alternative of obtaining the indicated objectives. • It produces efficiency indicators such as Total Beneficiary Population per Investment. CEA

  14. Comparison of Alternatives with CEA • To compare project alternatives, the investment cost is used to select the optimal alternative • The selected alternative will be the one with the lowest investment cost that will provide the road all-weather access Alternatives Investment 2.03.71.75.5 Project Optimal Alternative:Lower Investment CEA

  15. Comparison of Projects with CEA • To compare the economic priority of projects, it is recommended the use of the efficiency indicator Total Beneficiary Population per Investment Alternative withLowest Cost ResurfaceGrading Resurface Total BeneficiaryPopulation / Investment 2014 5 PRIORITY Projects CEA

  16. Projects Eligibility with CEA • To define if a project is eligible it is recommended to define a minimum acceptable efficiency indicator Total Beneficiary Population per Investment Total Beneficiary Population per Investment 2014 5 Projects Eligible Not Eligible CEA

  17. Projects Eligibility with CEA CEA

  18. CEA Indicators • Investment Cost per Total Beneficiary Population • 100 US$ per person • Total Beneficiary Population per Investment Cost • 0.01 persons per US$ • Total Beneficiary Population per Investment Cost in thousands of dollars • 10 persons per 1,000 US$ CEA

  19. Multi Criteria Analysis (MCA) • It adopts criteria such as traffic, proximity to educative, health, and economic centers, which receive weights (points) concerning their perceived importance. • The added number of the points that each section receives is computed simply adding the points assigned for each criterion, or with the use of a more complex formula. MCA

  20. Multi Criteria Analysis Example • Inhabitants benefited per km • Percentage of extreme poverty • Productive area • Average traffic • Functional classification • Location in the optimal network • Number of health centers • Number of schools • Existence of public transport • Environmental feasibility MCA

  21. Multi Criteria Analysis Example MCA Factor = Value / Maximum Value

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