6
Estimation 164
Chapter of Transportation Costs and Benefits
165
Topics: Agency Costs: Capital Costs, Operating Costs, Maintenance Costs. User Costs: Vehicle Operating Costs, Travel Time Costs, Safety (Crash) Costs, Air Pollution Costs, Noise Pollution Costs.
6.1
INTRODUCTION The entire life cycle of any transportation facility (including design, construction, operation,
maintenance, and salvage) is associated with various types of costs and benefits incurred to agency, facility user and facility non-users. Part 1 of this chapter examines how streams of benefits and costs are used for economic analyses of alternative investment options. The present chapter focuses on how to calculate such costs and benefits that are needed for the economic analysis. As shown in Figure 6-2, transportation costs consist primarily of agency costs, user costs and non-user costs. Agency costs are comprised of capital costs, operating costs, maintenance costs. User costs, which are costs incurred by the user of the transportation facility largely consist of vehicle operating costs, travel time costs, delay costs, and safety costs.
6.2
AGENCY COSTS Agency costs refer to the costs that are borne by the owner or operator of the transportation facility.
Agency costs are typically placed into five major categories: advance planning, preliminary engineering, final design, right-of-way acquisition and preparation, construction, maintenance, and operations. In some cases, disposal of physical components of the transportation facility at the end of its service life involves some costs that are referred to as "salvage costs".
Advance Planning Costs Preliminary Engineering Costs Final Design Costs Capital Costs ROW Acquisition Costs
Construction Costs
Maintenance Costs
Cost of Operations
Figure 6-1: Costs at Various Stages of Transportation Project Development Advance Planning Costs: These include the cost of route and location studies, traffic surveys, and environmental impact assessments, and public hearings. Advance planning costs are typically estimated as a lump sum based on the price of man-hours within the transportation agency or from a selected consultant. In evaluating alternatives, costs should exclude any costs of advance planning work done prior to arriving at the alternatives. Preliminary Engineering Costs: These are the costs of carrying out an engineering study of the project, mainly geodetic and geotechnical investigations. Geodetic investigations involve land and aerial surveys, while geotechnical investigations involve and drilling, boring, sampling and filed and laboratory testing to determine soil profiles and other subsurface conditions. If some preliminary engineering has been carried out (especially regarding technical feasibility of competing alternatives), such costs may be excluded from project costs. Estimates of any remaining preliminary engineering work may then be determined as a historical percentage of
166 total engineering design cost for the respective alternative less any sunk costs, and should be included in project costs (AASHTO Red Book). Final Design Costs: These are the costs associated with preparation of engineering plans and working drawings, technical specifications, and other bid documents for the selected alternative design. Estimates of final design costs may be obtained from past records as a fraction of construction costs or total costs. Final deign costs typically account for 10-20% of construction costs (AASHTO Red Book). Right-of-Way Acquisition and Preparation Costs: Acquisition of ROW land typically includes the purchase price, legal costs, costs of obtaining the title, and administrative costs associated with negotiation, condemnation, and settlement. The use of tax assessor valuations or "going" rates for estimating real estates costs is not recommended (AASHTO Red Book). Severance damages are typically significant, and determining the value of remnant acquisitions is often a complex task. In absence of other information, fees and charges associated with ROW acquisition may be assumed as 2% of the purchase price. In preparing the right-of-way, costs incurred include relocation or demolishing of structures, relocating utilities. A rough estimate of the ROW acquisition costs can be made by a "windshield" survey and a count (including rough dimensions) of structures along the proposed new or expanded right of way (AASHTO Red Book). Given the volume of structures slated for demolition, the agency's rates for demolition can be applied to obtain an estimate of the total demolition costs. Where buildings need to be relocated it is necessary to consider the costs of acquiring new land and reconstruction of the building. The basis for residential relocation payments, including costs of temporary rentals may be established by existing policy of the transportation agency or the government. The relocation of existing utility facilities has been a headache for many transportation agencies, especially where the exact existing location of the facilities were not properly documented at the time of their installation and are therefore not known at the time of construction. Such utilities include water, gas, telephone, electricity. It is important that all efforts be made to contact the utility companies concerned, an inventory of their affected facilities taken, and the costs of relocation should be provided by these companies. If this is not done, unexpected utility facilities will be encountered during construction, resulting in disruption of such services to the consumers. This results in poor public relations for the transportation agency and extensive delay to the construction progress. Construction: Costs that are typically encountered during construction are associated with surveying, earthworks (including haulage), drainage, supervision and inspection work-zone management. For each item, there is a cost estimate derived from any one or more of the basic inputs of labor, material, manpower, and duly adjusted for overheads and profit. The engineers estimate for such costs, or a historical record of past successful bids may be used. In some cases, construction costs may be estimated as overall category items (such as cost per lane-mile of an asphaltic concrete pavement) rather than line items. In such cases, it may be useful to employ statistical regression may be used to develop such costs as a function of work attributes, location, etc.
167 Operating Costs: These are costs that are associated with a transportation agency's efforts to sustain a satisfactory level of service, in terms of congestion alleviation, safety enhancement, convenience, and comfort. These costs include charges for utility use (such as electricity for street lighting and traffic signal systems) safety patrols, traffic surveillance, etc. Unlike maintenance costs, operating costs have little no direct bearing on the physical condition of the transportation infrastructure. Operating costs include roadw...
Chapter 6