long-life pavement seminar cedex, madrid, 25 th february 2008 ellpag - economics of long-life...
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ELLPAGELLPAG
Long-Life Pavement Seminar Long-Life Pavement Seminar CEDEX, Madrid, 25CEDEX, Madrid, 25thth February 2008 February 2008
ELLPAG - Economics of Long-Life ELLPAG - Economics of Long-Life PavementPavement
ByBy
Nicolas Bueche, Nicolas Bueche,
EPFL - LAVOCEPFL - LAVOC
SwitzerlandSwitzerland
ELLPAGELLPAG
Presentation contentPresentation content
1.1. Introduction to economic analysisIntroduction to economic analysis Cost Benefit Analysis (CBA)Cost Benefit Analysis (CBA) Existing models for CBA and model choice for Existing models for CBA and model choice for
long-life pavements long-life pavements First conclusions on CBA modelsFirst conclusions on CBA models
2.2. Economics of semi-rigid pavements Economics of semi-rigid pavements Cost Benefit Analysis (CBA) methodologyCost Benefit Analysis (CBA) methodology Development of scenariosDevelopment of scenarios Output from the CBAOutput from the CBA Conclusions and recommendationsConclusions and recommendations
3.3. Economics aspects of rigid pavementsEconomics aspects of rigid pavements
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Introduction to economic analysisIntroduction to economic analysis
Phase 1: Fully-flexible Phase 1: Fully-flexible pavementspavements
Consideration of economic Consideration of economic aspects through national aspects through national reportsreports
Method developed to Method developed to provide a Europe-wide provide a Europe-wide technique for the CBA of technique for the CBA of LLP, in comparison with LLP, in comparison with determinate life determinate life pavements (DLP)pavements (DLP)
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Cost/Benefit Analysis (CBA)Cost/Benefit Analysis (CBA)
Following aspects must be taken into Following aspects must be taken into consideration:consideration:
Initial (construction) costsInitial (construction) costs Loss of capital value – residual valueLoss of capital value – residual value Maintenance and traffic management costs Maintenance and traffic management costs
(agency costs)(agency costs) Costs due to road user delays at road worksCosts due to road user delays at road works Costs due to accidentsCosts due to accidents Environmental economical aspectsEnvironmental economical aspects
Some of the costs are relatively easy to Some of the costs are relatively easy to determine and calculate but for other types determine and calculate but for other types the exercise may be more difficult…the exercise may be more difficult…
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Construction costsConstruction costs Thickness of LLP could be less than for DLPThickness of LLP could be less than for DLP Not necessarely additional costs for LLP (UK) Not necessarely additional costs for LLP (UK) Some other countries anticipated higher Some other countries anticipated higher
construction costs (BE, DK, PL)construction costs (BE, DK, PL) More careful construction practices that may More careful construction practices that may
increaseincrease the unit costs the unit costs
Agency costsAgency costs No structural maintenanceNo structural maintenance Reduction of maintenance costs not necessarily Reduction of maintenance costs not necessarily
expected (high quality work needed)expected (high quality work needed) No major difference in traffic management costs No major difference in traffic management costs
expected by UK and Belgium (but operations expected by UK and Belgium (but operations quicker that may reduce costs)quicker that may reduce costs)
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Loss of capital valueLoss of capital value FORMAT project:FORMAT project: description of the methodology description of the methodology
for the development of a model for evaluating for the development of a model for evaluating pavement valuepavement value
helps the assessment of the current value of helps the assessment of the current value of pavementpavement
Accident costsAccident costs
Some models existSome models exist Very dependent on the traffic and works Very dependent on the traffic and works
management management Published costs usually available and fairly highPublished costs usually available and fairly high NL: NL: €1.3M in 1997 for a fatal accident €1.3M in 1997 for a fatal accident UK: currently over €1 for a fatal accidentUK: currently over €1 for a fatal accident
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Costs due to road user delayCosts due to road user delay
Environmental costsEnvironmental costs Currently no existing global modelsCurrently no existing global models Difficult to quantify in monetary termsDifficult to quantify in monetary terms Approach not in use currently but some figures Approach not in use currently but some figures
and studies available, especially for noise and studies available, especially for noise appreciation and COappreciation and CO22 emission (micro-simulation) emission (micro-simulation)
Cost of travel time
0.0
10.0
20.0
30.0
40.0
50.0
60.0
50.0 60.0 70.0 80.0 90.0 100.0 110.0 120.0
Mean speed of travel (km/h)
Co
st o
f tr
avel
tim
e (€
)
Existing models based on comparing traffic flow Existing models based on comparing traffic flow and residual road capacities. However, these and residual road capacities. However, these models neglect/underestimate probabilistic models neglect/underestimate probabilistic aspects of traffic demand (PAV-ECO project, aspects of traffic demand (PAV-ECO project, ISOHDM, …)ISOHDM, …)
Statistics usually available in EU countriesStatistics usually available in EU countries NL assessed at NL assessed at €1€13.5/hour per user 3.5/hour per user
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Existing models for CBAExisting models for CBA
Enquiry concerning existing simple models, Enquiry concerning existing simple models, that could be used for CBA on LLPthat could be used for CBA on LLP
Following aspects considered:Following aspects considered: Asset lossAsset loss User costsUser costs Accident costsAccident costs Environmental costsEnvironmental costs Agency costsAgency costs
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CBA model for LLP Economical AssessmentCBA model for LLP Economical Assessment
Only UK considered specifically economic Only UK considered specifically economic aspects of LLP:aspects of LLP:
Pavement maintenance limited to the regular Pavement maintenance limited to the regular replacement of the surfacingreplacement of the surfacing
Underlying layers regarded as permanentUnderlying layers regarded as permanent Surface treatment costs significantly less than Surface treatment costs significantly less than
structural treatmentstructural treatment Estimated benefits for new pavements:Estimated benefits for new pavements:
construction benefits: construction benefits: €50M€50M maintenance costs reduced: €72Mmaintenance costs reduced: €72M
Estimated combined benefits for new and existing Estimated combined benefits for new and existing pavements: pavements: €350M / 10 years for 10.000 km€350M / 10 years for 10.000 km
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Selection of adapted CBA modelSelection of adapted CBA model
Yes / could be extended
No / could not be extended
No objective data /
complicated to be extended
UK SAS
PASI
PASI
FORMAT
Step 1: Initial selection
Asset loss
Agency costs
Users extra costs
Environmental costs
Safety costs
Elem
ent Co
nsidered
Availibility
of data
Exte
nsion to LLP
s
FORMAT
Elem
ent Co
nsidered
Availibility
of data
Exte
nsion to LLP
s
Step 2: Assessment of the contents
Step 3: Final selectionPASI FORMAT
Yes / could be extended
No / could not be extended
No objective data /
complicated to be extended
UK SAS
PASI
PASI
FORMAT
Step 1: Initial selection
Asset loss
Agency costs
Users extra costs
Environmental costs
Safety costs
Elem
ent Co
nsidered
Availibility
of data
Exte
nsion to LLP
s
FORMAT
Elem
ent Co
nsidered
Availibility
of data
Exte
nsion to LLP
s
Step 2: Assessment of the contents
Step 3: Final selectionPASI FORMAT
Review of existing CBA modelsReview of existing CBA models
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Proposed model - PASIProposed model - PASI PProject roject AAnalysis nalysis SSystem ystem IInternationalnternational Developed by OECD - long-life surfacing Developed by OECD - long-life surfacing
group (2002)group (2002) CBA model for long-life pavement economic CBA model for long-life pavement economic
asset valuation and whole life costing: asset valuation and whole life costing:
developed for various environments and developed for various environments and countriescountries
each component (sub-model) is a "simple each component (sub-model) is a "simple model"model"
environmental impact not consideredenvironmental impact not considered
simplistic consideration of some elementssimplistic consideration of some elements
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First conclusions on CBA modelsFirst conclusions on CBA models
Results of the first phase of the projectResults of the first phase of the project Different models identified (PASI, FORMAT, ..)Different models identified (PASI, FORMAT, ..) All significant parameters not considered by these All significant parameters not considered by these
modelsmodels Development of a specific model for economical Development of a specific model for economical
assessment of LLP neededassessment of LLP needed In a first stage, one of the existing model selected, In a first stage, one of the existing model selected,
adapted and used for assessing LLP in comparison adapted and used for assessing LLP in comparison to traditional alternatives (PASI)to traditional alternatives (PASI)
In a second later stage, development is needed of a In a second later stage, development is needed of a new model dedicated to LLP that would consider the new model dedicated to LLP that would consider the environmental aspects as wellenvironmental aspects as well
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Full Cost Benefit AnalysisFull Cost Benefit Analysis
CBA
FORMATEnvironmental costs
LLP economically interestingTotal costs DLP > Total costs LLP ?
CBA selection of
Long-Life Pavements or Determinate Life Pavements
PASI
Construction costs
Asset loss
Users extra costs
Safety costs
Step 1
Yes
No
CBA LLP economically interesting
LLP economically not interesting
Yes
No
Total costs DLP > Total costs LLP ?
Step 2
LLP = Long-Life Pavements
DLP = Determinate Life pavements
CBA
FORMATEnvironmental costs
LLP economically interestingTotal costs DLP > Total costs LLP ?
CBA selection of
Long-Life Pavements or Determinate Life Pavements
PASI
Construction costs
Asset loss
Users extra costs
Safety costs
Step 1
Yes
No
CBA LLP economically interesting
LLP economically not interesting
Yes
No
Total costs DLP > Total costs LLP ? CBA LLP economically interesting
LLP economically not interesting
Yes
No
Total costs DLP > Total costs LLP ?
Step 2
LLP = Long-Life Pavements
DLP = Determinate Life pavements
ELLPAGELLPAG
Presentation contentPresentation content
1.1. Introduction to economic analysisIntroduction to economic analysis Cost Benefit Analysis (CBA)Cost Benefit Analysis (CBA) Existing models for CBA and model choice for Existing models for CBA and model choice for
long-life pavements long-life pavements First conclusions on CBA modelsFirst conclusions on CBA models
2.2. Economics of semi-rigid pavements Economics of semi-rigid pavements Cost Benefit Analysis (CBA) methodologyCost Benefit Analysis (CBA) methodology Development of scenariosDevelopment of scenarios Output from the CBAOutput from the CBA Conclusions and recommendationsConclusions and recommendations
3.3. Economics aspects of rigid pavementsEconomics aspects of rigid pavements
ELLPAGELLPAG
Economics of Semi-Rigid (and Flexible) pavementsEconomics of Semi-Rigid (and Flexible) pavements Phase 2 of the project (under finalisation)Phase 2 of the project (under finalisation) Designs in some European countriesDesigns in some European countries Asphalt layer: Asphalt layer: functional characteristics and functional characteristics and
preserve the structural integrity preserve the structural integrity of the structureof the structure
Hydraulically bound base layer: Hydraulically bound base layer:
primary structural layerprimary structural layer
Asphalt layer
Hydraulically bound base
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CBA methodology and assumptionsCBA methodology and assumptions PASI model usedPASI model used Main objective: Assess the possible Main objective: Assess the possible
economic savings from the use of LLPs economic savings from the use of LLPs rather than DLPsrather than DLPs
Indicative exerciseIndicative exercise Maintenance schedules and costs provided Maintenance schedules and costs provided
from UK's experiencefrom UK's experience Construction costs not considered Construction costs not considered
explicitlyexplicitly All maintenance treatments occur All maintenance treatments occur
exclusively in the bituminous layerexclusively in the bituminous layer
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Development of scenariosDevelopment of scenarios
Parameters defined before any analyses:Parameters defined before any analyses: Analysis period limited to 50 years in PASI modelAnalysis period limited to 50 years in PASI model Discount rate: rate at which costs and benefits are Discount rate: rate at which costs and benefits are
converted to net present value (NPV) – 3, 5 or 7 %converted to net present value (NPV) – 3, 5 or 7 %
Parameter variation for the development of scenariosParameter variation for the development of scenarios Identification of key factors which affect the results Identification of key factors which affect the results
of the analysisof the analysis Sensitivity analysis on these factors Sensitivity analysis on these factors
combination of parameter values for the combination of parameter values for the development of scenariosdevelopment of scenarios
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Sensitivity cases
Traffic parameters
Type of road
MSA
HGVs
AADT
Growth rate
Maintenance options
Maintenance options
Reconstruction
New Construction
Frequency
Maintenance schedules
LIST OF SCENARIOSLIST OF SCENARIOS
…
Discount rate
Appropriate value
Sensitivity cases
Sensitivity cases
Traffic parameters
Type of road
MSA
HGVs
AADT
Growth rate
Maintenance options
Maintenance options
Reconstruction
New Construction
Frequency
Maintenance schedules
LIST OF SCENARIOSLIST OF SCENARIOS
…
Discount rate
Appropriate value
Sensitivity cases
Development of scenariosDevelopment of scenarios
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Traffic parametersTraffic parameters
Growth rate
(%)
Proportion of HGVs
(%)
AADT
(vehicles/day)
Dual two lane motorway
1 12 75,000
1 12 50,000
1 12 100,000
1 5 75,000
1 20 75,000
0 12 75,000
2 12 75,000
Dual three lane motorway
2 12 100,000
Design traffic: 60msa of 80kN standard axlesDesign traffic: 60msa of 80kN standard axles Annual growth rate: Annual growth rate: 0%, 0%, 1%1%, 2%, 2% Heavy goods vehicles proportion: Heavy goods vehicles proportion: 5%, 5%, 12%, 12%,
20%20% Traffic flow (AADT): Traffic flow (AADT): 50.000,50.000, 75.000 75.000 and and
100.000100.000
Different combinationsDifferent combinations
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Maintenance optionsMaintenance options
Initial maintenance schedules for LLP1 and Initial maintenance schedules for LLP1 and DLP1 DLP1 LLP: maintenance through regular replacement of LLP: maintenance through regular replacement of
the wearing coursethe wearing course DLP initially designed for 20 years lifeDLP initially designed for 20 years life
Further maintenance schedules for determinate Further maintenance schedules for determinate life pavements (DLP) to investigate the effect of life pavements (DLP) to investigate the effect of different maintenance optionsdifferent maintenance options
LLP2 and LLP3: Effect of maintenance optionsLLP2 and LLP3: Effect of maintenance options LLP4 and LLP5: replace upper layer more LLP4 and LLP5: replace upper layer more
frequently than for DLPfrequently than for DLP
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Maintenance schedulesMaintenance schedules Maintenance schedule
Determinate life pavements
DLP1 Year in service 0 10 20 30 45 - -
Maintenance task NC IN40 OL IN40 RC - -
DLP2 Year in service 0 10 22 31 45 - -
Maintenance task NC IN40 P/O 100 IN40 P/O 200 - -
DLP3 Year in service 0 10 20 30 40 50 -
Maintenance task NC IN40 IN100 IN40 OL IN40 -
Long life pavements
LLP 1 Year in service 0 10 20 30 40 50 -
Maintenance task NC IN40 IN40 IN40 IN40 IN40 -
LLP 2 Year in service 0 10 18 26 36 44 -
Maintenance task NC TS TS IN 40 TS TS -
LLP 3 Year in service 0 10 20 30 40 50 -
Maintenance task NC IN40 IN40 IN100 IN40 IN40 -
LLP 4 Year in service 0 8 16 24 32 40 48
Maintenance task NC IN40 IN40 IN100 IN40 IN40 IN100
LLP5 Year in service 0 8 16 24 32 40 48
Maintenance task NC IN40 IN40 IN40 IN40 IN40 IN40
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Scenarios for the analysisScenarios for the analysis
Scenario Traffic parameters Maintenance schedule
1 Base conditions DLP1, 2, 3 and LLP1, 2, 3, 4, 5
2 Discount rate = 3% DLP1 and LLP1
3 Discount rate = 7% DLP1 and LLP1
4 AADT=50.000 DLP1 and LLP1,4,5
5 AADT=100.000 DLP1 and LLP1,4
6 HGVs=5% DLP1 and LLP1,4,5
7 HGVs=20% DLP1 and LLP1,4,5
8 Growth rate = 0% DLP1 and LLP1,4,5
9 Growth rate = 2% DLP1,2,3 and LLP1,4,5
10 3DM AADT = 100.000 DLP1 and LLP1,4,5
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Output from the CBAOutput from the CBA
Scenario
Maintenance schedule
Works cost [€k]
User costs [€k]
Total cost [€k]
Variation from parameter base value
1 DLP1 1,496 18,404 19,899 None
DLP2 1,545 18,492 20,037 (Base conditions)
DLP3 1,404 14,727 16,131
LLP1 1,310 7,004 8,313
LLP2 953 6,699 7,652
LLP3 1,359 10,272 11,631
LLP4 1,827 14,696 16,523
LLP5 1,755 8,586 10,341
Base conditions Discount rate: 5%AADT: 75.000HGVs: 12%Growth Rate: 1%
User costs AccidentTime delaysVehicle operation
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Total costs for the base conditionsTotal costs for the base conditions
0
5,000
10,000
15,000
20,000
25,000
30,000
DLP1 DLP2 DLP3 LLP1 LLP2 LLP3 LLP4 LLP5
Maintenance schedule
Co
st
(NP
V)
Eu
ros
(k
)
WORKS COSTS (€k)
USER COSTS (€k)
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Ratio of total cost for DLP1, 2 and 3 to LLP1Ratio of total cost for DLP1, 2 and 3 to LLP1Scenario Parameter Parameter
valueRatio of total
costRatio of total
costRatio of total
costDLP1/LLP1
DLP2/LLP1DLP3/LLP1
1 All Base 2.4 2.4 1.9
2 Discount rate 3% 2.7 - -3 7% 2.2 - -
4 AADT 50,000 2.2 - -5 100,000 2.4 - -
6 HGVs 5% 2.4 - -7 20% 2.4 - -
8 Growth rate 0% 2.2 - -9 2% 2.5 2.5 2.0
10 3DM 100,000 7.3 - -
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Variation in total cost with changes to the Variation in total cost with changes to the AADTAADT
0
5,000
10,000
15,000
20,000
25,000
30,000
Annual average daily traffic (standard axles)
Co
st
(NP
V)
Eu
ros
(k
)
50,000 75,000 100,000 100,000 3DM
LLP1
WORKS COSTS (€k)LLP4
LLP5DLP1
USER COSTS (€k)
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Variation in total cost with discount rateVariation in total cost with discount rate
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Discount Rate (%)
Co
st
(NP
V)
Eu
ros
(k
)
LLP1 WORKS COSTS (€k)
DLP1 USER COSTS (€k)
3% 5% 7%
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Conclusions of CBAConclusions of CBA
Maintenance schedule DLP1 (base case) is:Maintenance schedule DLP1 (base case) is: 2.4 time more expensive than LLP12.4 time more expensive than LLP1 Almost 2.0 times LLP5Almost 2.0 times LLP5 20 % more than LLP420 % more than LLP4
The use of LLPs may generate considerable savingsThe use of LLPs may generate considerable savings Degree of saving could be up to 60 %Degree of saving could be up to 60 % High potential not compromised by traffic fluctuationsHigh potential not compromised by traffic fluctuations LLP not appropriate in every situation (poor ground,…)LLP not appropriate in every situation (poor ground,…) Results and conclusions broadly relevant to both fully Results and conclusions broadly relevant to both fully
flexible and semi-rigid constructionsflexible and semi-rigid constructions
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Limitations of the analytical CBALimitations of the analytical CBA
Model derived for DLPs and does not take full Model derived for DLPs and does not take full advantage of LLPsadvantage of LLPs
Residual worth of DLP and LLP not consideredResidual worth of DLP and LLP not considered Elaboration of the maintenance scenariosElaboration of the maintenance scenarios Frequency of resurfacing (inlay) for LLPs Frequency of resurfacing (inlay) for LLPs
assumed to be similar as for DLPsassumed to be similar as for DLPs CBA conducted with typical UK costsCBA conducted with typical UK costs
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RecommendationsRecommendations
Disseminate the knowledge of potential Disseminate the knowledge of potential benefits of LLPsbenefits of LLPs
Similar studies to be carried out for other Similar studies to be carried out for other European countries with their own costsEuropean countries with their own costs
Practical experience needs to be developed Practical experience needs to be developed - for example through full scale trials- for example through full scale trials
ELLPAGELLPAG
Presentation contentPresentation content
1.1. Introduction to economic analysisIntroduction to economic analysis Cost Benefit Analysis (CBA)Cost Benefit Analysis (CBA) Existing models for CBA and model choice for Existing models for CBA and model choice for
long-life pavements long-life pavements First conclusions on CBA modelsFirst conclusions on CBA models
2.2. Economics of semi-rigid pavements Economics of semi-rigid pavements Cost Benefit Analysis (CBA) methodologyCost Benefit Analysis (CBA) methodology Development of scenariosDevelopment of scenarios Output from the CBAOutput from the CBA Conclusions and recommendationsConclusions and recommendations
3.3. Economics aspects of rigid pavementsEconomics aspects of rigid pavements
ELLPAGELLPAG
Economics aspects of rigid pavementsEconomics aspects of rigid pavements
Quality of construction has a big influence Quality of construction has a big influence in concrete pavementsin concrete pavements
Similar analayis procedure to be used as Similar analayis procedure to be used as for semi-rigid pavementsfor semi-rigid pavements
CBA will be largely based on the CBA will be largely based on the experience in UK and France experience in UK and France
Poorly constructedPoorly constructed
Well constructedWell constructed
ELLPAGELLPAG
Elaboration of scenarios Elaboration of scenarios Pavement designed for 50 years life durationPavement designed for 50 years life duration Consideration of two rigid pavement types:Consideration of two rigid pavement types:
Jointed unreinforced concrete (URC)Jointed unreinforced concrete (URC) Continuously reinforced concrete (CRCP)Continuously reinforced concrete (CRCP)
Traffic parametersTraffic parameters will be subset of those used for semi-rigid will be subset of those used for semi-rigid pavementspavements
Different Different maintenance options:maintenance options: Joint treatmentsJoint treatments Surface treatmentsSurface treatments Structural treatmentsStructural treatments
Elaboration of maintenance scenarios and PASI Elaboration of maintenance scenarios and PASI simulation yet to be completed simulation yet to be completed
