ASSIGNMENT

PART A

1) OVERALL OBJECTIVE OF HIGHWAY

In financial aspect means to collect funds to pay for
provision of highway services like the maintenance of the
highway itself. Next one is efficiency, to discourage over
utilization of highway space. Equity or fairness to all
highway users having minimal traffic congestion and increase
in mobility of efficient modes.
2) FINANCING HIGHWAY
There are two principle under financing highway. First is the
benefit principle, it suggest that people should pay
according to the benefits received from highway usage and
anyone who receives more benfits from it should pay more
charges. The second principle is the ability-to-pay
principle. In this principle it states that people should pay
charges in accordance with their ability to pay. People with
greater ability should pay more than those with lesser
capability. But problems exist with this kind of principle
because it is not always easy to compare people in terms of
their abilities to pay only, there are many factors also to
consider.
3) FINANCING HIGHWAY STRUCTURES
TOLL FINANCING
Toll financing of highways as compared to financing from other
sources such as fuel taxes or fiscal instruments depend on the
nature of the economy. The decision should be justified by
economic and financial analyses for example the raising
additional revenue, fairness in terms of the user-pays
principle, optimal pricing and resource allocation) are
seldom achieved. Moreover, the costs of establishing a toll
system, the collection costs, and the diversion of tolls by
collectors can be high.
 EQUITY FINANCING
It is very beneficial for atoll highway project to obtain
domestic financing to avoid the exchange rate risk between
local currency toll revenues and foreign currency debt.
However, sometimes the treatment of equity in a contractor-
driven project in which the contractor tends to limit the
amount of equity, and to sell down its equity as much and as
early as possible after the completion of construction. It is
always an issue as to how much equityshould be injected in
the beginning and how long and to what extent the
concessionaireshould hold it
SUBORDINATED LOANS
It fills the gap between the equity and senior loans in the
original financial structure and also it provide stand-by
financial support in case of revenue shortfalls and cost
overruns. This approach is common but it should be applied
carefully since an excessive use of subordinated loans ay
considerably increase the capital costs and impair the
sponsors’s commitment to the project.
SENIOR COMMERCIAL BANK LOANS AND DEBT SECURITIES
Under this financing tool is by providing long-term loans for
government controlled banks. Shareholders can also get loan
from an off-shore parent company that raises funds on off-
shore capital markets. Domestic bond issues under the
government controlled institutional investors.
Securitization of existing toll highways.
INSTITUTIONAL INVESTORS/INVESTMENT FUNDS
Institutional investors can be a good source offinancing for
toll highway projects since the long-term maturity of their
funds matches the duration of a toll highway concession.
However,since institutional investors in developing countries
are not active in the highway sector in general, foreign
institutional investors from developed countriescan play an
important role in filling the gap.
INITIAL PUBLIC OFFERINGS
An IPO of a single asset company with a Build Operate Transfer
(BOT)arrangement can be difficult as the duration of future
cash flow is limited by the fixed concession period and the
enterprise is affected to agreat extent by general stock
market sentiment at the time of IPO. On the other hand, an
IPO based on multiple assets with a portfolio of stable cash-
generating toll highway projects maybecome an appropriate
solution to fund raising issues in developing countries.
ASSET SEURITIZATION
One innovative approach is the leveraging of existing highway
assets to raise new funds in capital markets. This approach
can be attractive to private investors, since they need to
take only limited construction/completion risks and the
transactions offer the prospect of high returns.
However,thereare some concerns withthe asset securitization
approach such as the possibilityofoverleveraging the asset at
the expense of the obligation to repay the original loan.
PORTFOLIO APPROACH
This structure allowed cross-application of dividends so each
project could support the other. It enabled projected
interest coverage levels to be tighter than they would have
been otherwise, thus lowering the cost of financing. Combining
two different highways diversified the lenders’ risks. It
eliminated the need for two separate financing, minimized the
duplication of documentation and negotiation with financing
parties, and created apublic bond offering large
enoughtobeliquid and to meet demand at the long-end of the
sterling bond-market.

4) ANALYSIS OF HIGHWAY PROJECT FINANCING

DEVELOPED COUNTRIES
For financing structure, Highway financing in developed
countries financed their projects primarily through equity
financing, issuing of various kinds of bonds, securities and
debentures. In addition, loans from both international banks
and local banks were made for debt financing. For Institutional
structure, all projects were announced by the respective
 government or ministerial department to private developers
for competitive bidding. Legislation set up relevant
departments and institutes to monitor and cooperate with the
private developer independently of the government. Guidelines
for prequalification of these proposals were also implemented
by government bodies for efficient and better short listing of
proposals obtained. Strict prerequisites such as the financial
performance and relevant domain knowledge and expertise for
the construction of the project were also required to be
submitted as reports to the respective government
departments.

DEVELOPING ECONOMIES
For financing structure, Highway projects were financed mainly
from development banks like ADB, WORLD BANK in the form of
loans. Financesalso came from domestic development banks like
in China, the China Development Bank (CDB) and the government
themselves.

5) WHAT IS ACESS MANAGEMENT?

Access management is simply an application of a concept that
was first identified in the early 1990s. They developed it
depending on the function of the road, access may fully
controlled where priority is given to through-traffic or
partially controlled to preserve a desirable balance between
access and mobility.

a) Develop afunctional system of classification of roadways,

and define the roadways in the system in terms of these
classes.
b) Provide abalanced road circulation system
c) Establish access control to roadways with higher functional
classifications
d) Establish standards on driveways that feed into collector
and arterial roads
e) Plan the location and design of major intersections
f) Promote the development of dedicated turning lanes and
other special turning treatments
g) Consider the application of median treatments including
raised medians and two-way left-turn lanes (TWLTL)
 h) Assess economicimpacts and involvepublic participation in
access management policy initiatives

6) CLASSIFICATION OF ROADWAYS
The lowest level, there is a local road that provides access
to individual housing units in small residential
neighborhood. The local roads feed into collector roads that
link up multiple neighborhoods. The collector roadsfeed into
the minor arterial roads, which in turn link to the major
arterials that provide connections between large scale
community networks. At the highest level there are the
freeways and expressways that carry regional and intercity
traffic.

7) ROADWAY CATEGORY AND CLASSIFICATION

Acording to FHWA, the functional classification system of
roadways distinguishes between the four- local, collector,
minor arterial and principal arterials. Principal arterials
devided into three, intersate highways, freeways, and
expressways.

8) EIA OF HIGHWAY DEVELOPMENT

a) direct and indirect – for direct impact land
acquisition,removal of vegetal cover, and erosion of
productive soils. For indirect, degradation of surface
water quality by the erosion and inreased of deforestation.

b) Cumulative - Cumulative impacts might occur due to the

destruction of vegetation and eventual erosion. The
vegetation usually does not have enough time to recover
because of traffic on the highway and the problem is
exacerbated over time.

c) local and widespread – adverse effects in the immediate

vicinity such as destruction of building

d) short- and long-term - Short-term impacts are those, which

appear during or shortly after the highway construction.
Long-term impacts may arise during the operation and
maintenance phases of the highway and may last for decades
 e) temporary and permanent - Temporaryimpacts are those whose
occurrence is not long lasting and which eventually
reverses. Permanent impacts are irreversible. The affected
ecosystem does not return to its previous state on a human
timescale.

f) random and predictable - For example, the construction of

ahighway through alarge, densely populated area will result
in population displacement and business loss. On the other
hand, incidents such as accidental pollution, fire, or
spillage of toxic products are,bynature,unpredictable.

MAJOR STEPS
a) perform environmental screening
Identification of possible major adverse environmental
impacts of the road project
Decision on the level of EIA study that the project
must undergo

b) perform environmental scoping or initial environmental

examination
Estimation of magnitudesofadverse environmental impacts and
Identification of areas of major environmental concerns

c) prepare TOR for EIA

Analysis and assessment of environmental impacts
Proposal of mitigation measures for adverse environmental
impacts
Formulation of monitoring plan
Development of environmental management plan
Arrangements for public consultation and public participation

d) review of EIA report

Forming of reviewing panel
Establishment of EIA review criteria
Development of quality control measures
Conduct of formal review
Preparation of review report
e) Approval or rejection of proposed project
Rejection or approval of the project by authority
Preparation of terms and conditions for approved project
Specifying of specific environmental protection measures
Specifying monitoring and evaluation techniques

f) Environmental management plan and monitoring

Implementation of environmental management plan for
mitigation measures
Enforcement of monitoring programs

g) Postconstruction audit and evaluation

Evaluation of the degree ofimplementation of the
environmental management plan
Assessment of effectiveness of monitoring programs
Evaluation of the degree ofsuccess of mitigation measures

9) ROAD/HIGHWAY SAFETY
a) Fundamental concept of road traffic safety?
It is less about providing amenu of engineering solutions
to various road traffic safety problems and moreabout
providing amental map for developing the most effective
solutions for given circumstances.

b) The dimension of the road safety problem

As arough rule of thumb,for everyroad traffic death,
thereare of the orderof15injuries severe enough to require
hospitalization and more than a further 50 injuries
requiring medical treatment, but not hospitalization.
While governments, communities and the media tend to focus
on road traffic deaths, deaths represent only the tip of
the road toll iceberg.

c) Measuring traffic safety performance

Transport safety reflects the risk of serious injury per
unit transport use.
Personal safety measures the rate of death or serious
injury per 100, 000 persons. It is a rate rather than a
risk measure and, as such, its use facilitates direct
comparison with other forms of disease.
 d) Safety of road transport system
The official road safetymantra was “the threeEs” —
Engineering,Education and Enforcement —but there was
typically no co-ordination or integration of effort. The
“Engineering”meant little more than that the civil
engineers were responsible for road building and
maintenance, that the traffic engineers were responsible
for controlling traffic flow and that the vehicle engineers
designed and built vehicles. Neither road nor traffic
authorities were given any substantive accountability for
the level of safety in the road systems they built and
operated; their primary role was to facilitate traffic flow.
Norwere vehicle engineers held accountable for the safety
of the vehicles they put into the traffic stream. There were
certainly no incentivesfor dialogue among the
threeprofessions.

10) ROAD AND TRAFFIC ENGINEERS

Safety engineering Mindset
The most important paradigm shift needed for substantial
futureroad traffic safety improvements is the acceptance by
road and traffic engineers that safety must no longer be a
secondary consideration.

- Abandon the outmoded belief that behavioral control should

be the frontline road traffic safety
countermeasurestrategysimply because human behavior or
error can be identified as acause in
the vast majority of crashes.
- Accept that crashes have multiple causes and that
successful interventions can occur at many
points in the causal chains.
- Acepting that in such a universal, daily human activity,
crashes are inevitable and safe road use must be defined as
road use with minimum probability of death or serious
injury.
- Temper the use of economic rationalist decision-
making,applying it only to choose the most costefficient
treatments and not to justify the “noaction”option.
- Base all program decisions upon systematic analysis of
reliable data and research evidence of likely safety
effectiveness.
- Evaluate all interventions and seek continuously to build
the stock of road and traffic safety engineering knowledge.
- Integrate road and traffic engineering interventions with
the interventions of vehicle engineers, legislators, traffic
police, and others addressing common crash problems.

a) relationship between design and safety

-Influencing the opportuniy for a crash to occur
-Influencing the probability of a crash occuring per
given crash opportunity
-Controlling the process of energy exchange when the
crash does occur

b) Decision making process on road design

Audits should always be conducted as part of the planning
process for new roads and for road improvement programs.
The audit tool can also be used systematically to assess
the “design safety” of the entirenetwork, that is as
apro-active measureto identify roads, or road sections,
that haveinadequate safetydesign —whether or not that
road section is currently on aroad improvement program.
PART B
FUNCTIONAL AND STRUCTIONAL DESIGN OF HIGHWAYS

Design Consideration
-design speed
-design traffic volume
-number of lanes
-level of service
-sight distance
-alignment, super-elevation and grades
-cross section
-lane width
-horizontal and vertical clearance

Design process
-location design
-alignment design
-cross sectional design
-access design