Highway Engineering III

CEng 5241
Biruk
LammiiMulu(Msc.)
Gonfaa (MSc)
 Chapter Three
2

I N T R O D U C T I ON T O R O A D M A N A G E M E N T
SYSTEM
 Chapter-Three
3

3.1 Introduction
3.2 Economic evaluation for highway improvements
3.2.1 Costs of highway transportation
3.2.2 Benefits of highway improvements
3.2.3 Present value concepts
3.2.4 Economic evaluation techniques
3.3 Environmental appraisal for highways
3.4 labor-based construction of roads
3.4.1 Introduction
3.4.2 Choice of technology
3.4.3 Technical issues
3.4.4 Implementing methods
3.4.5 Project organization
 3.1 Introduction
4

 Once a transportation plan has been finalized and the

demand along each of its highway links has been
established, each project must be subjected to an
evaluation.
 The aim of the highway evaluation process is therefore to
determine the economic, societal and environmental
feasibility of the project or group of projects under
examination.
 Highway evaluation enables highway planners to decide
whether a project is desirable in absolute terms and also
provides a means of choosing between different competing
project options, all of which have the ability to meet the
stated goals and objectives of the project.
 3.2 Economic evaluation of highway
improvements
5

 Economic evaluation of highways is done for one or

more of the following reasons
- To determine feasibility of a project
- To compare alternative locations
- To evaluate various features of highway design, for
example , the type of surface to be used
- To determine priority of improvement
 Before describing analytical concepts and approaches
for economic evaluation, let us briefly consider the
costs and benefits of highway transportation .
 3.2.1 Costs of highway transportation
6

 HIGHWAY TRANSPORTATION COST : is the sum of

highway investment cost, maintenance and operating
cost, and the highway user costs.
 Highway investment cost: is the cost of preparing
a highway for service, including the cost of rights- of-
way, engineering design, construction, traffic control
devices and landscaping .
 Maintenance cost: is the cost of preserving a
highway and its components and keeping the facility in
a serviceable condition. Operating costs include the
costs of traffic control, lighting and the like.
 Continued…
7

 Highway user costs: include motor vehicle

operating costs (fuel, lubrication, tires), accident cost
(estimated accident rate times unit accident cost)
and travel time (total vehicle hours of travel times
unit value of time).
 3.2.2 Benefits of highway improvements
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 The various benefits which take place due to highway improvements

can be divided into two categories,
1)Direct or quantifiable benefits : These are benefits that result from
a reduction in highway user costs. These benefits result from
-decreased operating costs
-higher operating speeds
-fewer delays and
- decreased accident losses
2) Indirect or non-quantifiable benefits: These are benefits which
can’t be assigned any quantifiable value. Such as,
-reduced suffering and loss of life resulting from reduction in highway
accidents,
-increase in value of adjacent property ,
-increase in social and educational convenience etc.
 3.2.3 Present value(discounted value)
concepts
9

 In order to compare costs and benefits of highway

improvements on a sound basis they must be converted to
equivalent values at some common date. This process is
known as discounting.
 The present value (discounted value) P of some future
single payment F is calculated as,
P=F/(1+i)n …………..eqn.1 where ,
i=interest or discount rate per period
n=number of interest periods, usually years
 Also, the present value Ps of a series of uniform annual end
of period payments A can be determined by

Ps =A[{(1+i)n-1} /i(1+i)n] ……………eqn.2

 Continued…
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EXAMPLE 1: In 20 years the residual or salvage value of a certain

highway will be 250,000 birr. Determine the present
value(discounted value) of that sum, using an interest rate of 6%.
Solution : By eqn.1
P=250,000/(1+0.06)20 =77,951 birr
EXAMPLE 2: The user benefits for a certain highway are estimated
to be a uniform of 85,000 birr per year. Determine the present
value(discounted value) of those benefits assuming an interest rate
8% and an analysis period of 25 years.
Solution: By eqn.2
Ps=85,000[{(1+0.08)25 -1}/0.08(1+0.08) 25 ]
=907,358 birr
 Continued…
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 In many cases the annual values of user benefits (or highway

costs)change from year to year. In those cases, we assume that
the annual values increase (or decrease at approximately an
equal annual percentage , and calculate Ps as a product of present
value factor PVg and A (the first year payment).
Ps=A(PVg)………………….eqn.3
Where, PVg=[e(r-1)n-1]/(r-i)…………eqn.4
i=assumed interest rate(decimal fraction)
n= analysis period(years)
r=rate of growth of annual value=ln α/Y…………..eqn.5
Where,
α=first year value estimate and
Y= number of years
 Continued…
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 EXAMPLE 3: A certain highway has user benefits

17,500 birr during the first year that uniformly
increase at a rate of 4% each succeeding year .
Determine the present value(discounted value) of the
benefits , given a 12 year analysis period. Use an
interest rate of 6%.
Solution: PVg=e(0.04-0.06) -1/(0.04-0.06)=10.67
present value=10.67*17,500=186,725 birr
3.2.4 Economic evaluation techniques for
highways
13

 Economic calculations are intended to demonstrate

-economic justification for a particular project
-to permit comparison of alternative schemes or locations
-to determine priority of improvement etc.
These objectives can be carried out by one of the following methods
1)Benefit –cost (B/C)ratio
2)Net present value(NPV)
3) Annual cost method
4)Rate of return method
Of the four methods mentioned above B/C and NVP methods are
commonly used by highway engineers and thus, discussed in this
chapter.
Assignment: Read and explain annual cost method and rate of
return methods of economic evaluation of highways.
 Benefit-Cost(B/C) ratio
14

 This method utilizes present values(discounted values)

and is frequently used as indicator of project
desirability.
B/C = PV(ΔU)
[PV(Δ I) + PV(ΔM) - PV(ΔR)]
Where, PV=present value
ΔU=user benefits, reductions in highway user costs
Δ I=increased investment cost
ΔM=increase in maintenance and operating costs
ΔR=increase in residual value of the project
 Advantages and disadvantages of B/C method of
economic evaluation of highways
15

Advantages
 The use of the common unit of measurement, money,
facilitates comparisons between alternative highway
proposals and hence aids the decision making process.
 Given that the focus of the method is on benefits
and costs of the highway in question to the
community as a whole, it offers a broader perspective
than a narrow financial/investment appraisal
concentrating only on the effects of the project on the
project developers, be that the government or a group
of investors funding a toll scheme.
 Continued…
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Disadvantages
 The primary basis for constructing a highway project
may be a societal or environmental rather than an
economic one. If the decision is based solely on economic
factors, however, an incorrect decision may result.
 The method doesn’t recognize the importance of costs
and benefits that cannot be measured in monetary terms,
say, for example, the environmental consequences
of the project in question.

 15
 Net present value method(NVP)
17

 The net present value (NPV) of a highway

project is the difference between the present values
of the benefits from the project and the costs of
developing the project.
NPV = PV(ΔU) + PV(ΔR) - PV(ΔI) - PV(ΔM)
B1-C1 B2-C2 Bn-Cn+R
= + 2 +……+ n
(1+i) (1+i) (i+n)
Where, Bn and Cn =the benefit and cost of nth year
R =residual value
I =discount rate
 Decision rules for B/C and NPV methods
18

 Rules of application of the B/C and NPV method depend on the

following two factors
1)whether there are budgetary constraints
2)whether the projects under consideration are independent or
mutually exclusive
CASE 1- No budgetary constraints and independent projects.
* In this case all projects with positive NVP or B/C ratio greater than one
would be economically feasible
CASE 2-When the budget is constrained
*In this case for NPV method- a combination of projects that produces a
maximum NPV value but doesn’t exceed the available budget.
* For B/C method- projects are selected in order of decreasing B/C ratios,
adding projects until the budget is exhausted.
 Continued…
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 CASE 3- When several mutually exclusive

locations or designs are being compared
*In this case for NPV method- the alternative with the
highest NPV would be chosen.
*When B/C method is used to select the preferred
project the selection must be done in increments.
Beginning with the lowest-cost alternative having a
B/C>1, each increment of additional cost is justified
only if the incremental B/C ratio is greater than one.
This is illustrated on the following example.
 Example on B/C and NPV methods
20

 EXAMPLE 4:Three alternative designs (X1,X2,X3) are being

considered for a major interchange. For each of the alternatives,
the present values(discounted values) are shown below for user
benefits, investment costs, maintenance costs and the residual
value. Which is the preferred alternative?
X1 X2 X3 X2-X1 X3-X2

PV(ΔU) 95 127 128 32 1

PV(ΔI) 12 13 20 1 7
PV(ΔM) 7 20 17 13 -3
PV(ΔR) 2 1 3 -1 2
B/C 5.6 4 3.8 1.6 0.2

NPV 78 95 94 17 -1
 Continued…
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 By using the equations for B/C and NPV methods the B/C and
NPV values for each of the alternatives is calculated as shown in
the table below.
 NPV method- since alternative X2 has the highest NPV value.
 B/C method-To make selection by the B/C method, it is
necessary to use incremental ratios. First select the alternative
with the lowest cost i.e. X1.
 The next most costly alternative X2 is then tested by the
calculation of the B/C ratio for the increment X2-X1. Since this
ratio is greater than 1,alternative X2 is selected to replace X1.
 Alternative X3 is then tested by the incremental B/C ratio for X3-
X2. Since that ratio is less than 1, alternative X3 is not justified.
 Thus alternative X2 is selected.
 3.3 Environmental appraisal for highway
projects
22

 While the benefit-cost framework or NPV for a

highway project addresses the twin objectives of
transport efficiency and safety, it makes no attempt to
value its effects on the environment.
 Environmental evaluation therefore requires an
alternative analytical structure. And this structure is
termed as environmental impact assessment
(EIA).
 This assessment requires the preparation of an
environmental impact statement (EIS) for any
environmentally significant project undertaken by the
federal government.
 Continued…
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 In the environmental impact statement(EIS),

the developer of the highway is required to assess,
 The probable environmental impact of the proposal
 Any unavoidable environmental impacts
Alternative options to the proposal
 Short-run and long-run effects of the proposal and
any relationship between the two
 Any irreversible commitment of resources
necessitated by the proposal
 Continued…
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 In most design manuals 12 environmental

impacts are identified for assessment for any new
or improved trunk road proposal.
 These, together with the economic assessment,
would form the decision-making framework
used as the basis both for choosing between
competing options for a given highway route.
 Continued…
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The 12 environmental impacts forming the assessment framework are;

 Air quality The main vehicle pollutants assessed are carbon
monoxide (CO), oxides of nitrogen (NOX) and hydrocarbons (HC), lead
(Pb), carbon dioxide (CO2) and particulates. Established models are
used to predict future levels of these pollutants, and the values obtained
are compared with current air quality levels.
 Cultural heritage The demolition/disturbance of archaeological
remains, ancient monuments and listed buildings and the impact of
such actions on the heritage of the locality, are assessed under this
heading.
 Construction disturbance Though this impact is a temporary one,
its effects can nonetheless be severe throughout the entire period of
construction of the proposal. Nuisances such as dirt, dust, increased
levels of noise and vibration created by the process of construction can
be significant and may affect the viability of the project.
 Continued…
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 Ecology/nature conservation The highway being

proposed may negatively affect certain wildlife species and
their environment/habitats along the route corridor in
question. Habitats may be lost, animals killed and
flora/fauna may be adversely affected by vehicle emissions.
 Landscape effects The local landscape may be
fundamentally altered by the construction of the proposed
highway if the alignment is not sufficiently integrated with
the character of the local terrain.
 Land use The effects of the route corridor on potential
land use proposals in the area, together with the effects of
the severance of farmlands and the general reduction, if
any, in general property values in the vicinity of the
proposed route, are assessed under this heading.
 Continued…
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 Traffic noise and vibration The number of vehicles

using the road, the percentage of heavy vehicles, vehicle
speed, the gradient of the road, the prevailing weather
conditions and the proximity of the road to the dwellings
where noise levels are being measured, all affect the level of
noise nuisance for those living near a road. Vehicle
vibrations can also damage the fabric of buildings.
 Pedestrian, cyclist and community effects The
severance of communities and its effect on people in terms
of increased journey time and the breaking of links between
them and the services/facilities used daily by them, such as
shops, schools and sporting facilities, are evaluated within
this category of impact.
 Continued…
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 Vehicle travelers This assesses the proposal from the

perspective of those using it, i.e. the drivers. The view from
the road (scenery and landscape), the driver stress induced
by factors such as the basic road layout and frequency of
occurrence of intersections, are assessed within this
category on the basis that they directly affect levels of driver
frustration and annoyance leading to greater risk-taking by
drivers.
 Water quality and drainage This measures the effect
that run-off from a road development may have on local
water quality. Installations such as oil interceptors,
sedimentation tanks and grit traps will, in most instances,
minimize this effect, though special measures may be
required in particular for water sources of high ecological
value.
 Continued…
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 Geology and soils The process of road

construction may destabilize the soil structure or
expose protected rock formations. These potential
impacts must be identified together with measures to
minimize their effects.
 Policies and plans This impact assesses the
compatibility of the proposal with highway
development plans at local, regional and national
level.
 Some of the above impacts can be estimated in
quantitative terms, others only qualitatively.
 3.4 Labor-based construction of roads
3.4.1 Introduction
30

 Construction methods are characterized as equipment-

based or labor-based depending on the principal source of
motive power used.
 Equipment-based methods are also termed as capital-
intensive methods as they are heavily dependent on foreign
exchange for import of equipment, spare parts and fuel.
 Labor-based methods are often called employment
intensive because they contribute to employment creation.
 Labor-based methods are the favored type of construction
method in most developing countries where problems of
unemployment and lack of foreign exchange are present.
 3.4.2 Choice of technology
31

 The type technology used for labor based

construction of roads depends on the following
factors
 Government attitude
 Economic level;
 Comparative costs;
 Establishment of appropriate administrative and financial
procedures;
 Establishment of relevant management and technical training;
 Labor availability;
 Labor attitude;
 Type and location of projects.
 4.4.3 Technical issues
32

A) Design
labor based method require a somewhat different approach
to the design of roads from that when equipment-intensive
means are used. Attention should also be paid to the
working methods of the laborers.
B)Earth work
For labor-based construction the earth work in the
longitudinal direction should be minimized as much as
possible. High design speeds may not always be required
for rural roads. A reduction in the design speed would
allow the road alignment to follow the terrain contours
more easily, reducing the earth works.
 Continued…
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C) Compaction
labor-based road construction requires light compaction
equipment. Large mechanical compaction equipment is
difficult to move between the many sites being worked by
labor crews on large construction projects, and is usually
under-utilized on smaller projects.
D)Soil stabilization
Hand mixing of lime-stablized soil is used for example in
China. However, hand mixing is inefficient for pulverizing
clayey materials; lime dust may create a health problems
for the labourers.Hand mixing of cement-stablized soil is
not recommended as cement reacts and sets too quickly.
 Continued…
34

E) Surface dressing
Surface dressing may be carried out by labor-based
methods and the quality of work will be almost as good
as by mechanized methods if the works are properly
managed. Material specifications are the same as for
mechanized surface dressing.
 4.4.4 Implementing methods
35

 There are different ways of implementing labor-

based projects, some of these are
- Force account
- Casual labor
- Self-help
- Giving the work to contractors and sub-
contractors
 Continued…
36

Force account
 Force account work is construction undertaken by the
government agency using its own resources(direct
labor).the true total cost of force account construction is
usually above prices bid by well-organized contractors in
a competitive situation.in a non-competitive situation,
contract costs may exceed force account due to poor
management or excessive profit taking.in order to avoid
this it is necessary to maintain a small force account
capacity to set standards, and to carry out emergency
works and maintenance.
 Continued…
37

Casual labor
 Casual labor is a term used to describe temporarily
employed local people. The temporarily employed people
do not become a part of the permanent government labor
force, and their conditions of work are fundamentally
different. This means that, when the project design
includes the use of casual laborers, provisions should be
made to provide them with a minimum of facilities and
security(e.g., first aid provisions on site, clear indications
on workers' rights in case of illness or accident,
availability of basic facilities such as drinking water,
protective clothing, etc.)
 Continued…
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Self-help
 Self-help is a term used to describe works performed by
the local population often with technical assistance from
the government, but with no wages. Self-help projects are
usually initiated by a local population’s interest in
infrastructure improvements for which they will be the
ultimate beneficiaries. Most self-help projects benefit
from some kind of government assistance. The
government’s contribution to community work can vary
from simply supplying tools to the provision of food
incentives, partial financing and complete supervision.
 Continued…
39

Contractors and sub-contractors

 Contractors are private entrepreneurs who
undertake to carry out construction work within a
specified time and for an agreed price. Contract
amounts can be either negotiated or bid.
International lending agencies usually insist that
contracts involving their funds be awarded on a
competitive basis.
 Sub-contractors may be used by the main contractor
to provide labor or materials only or to undertake
specific items of work, such as culverts and bridges.
 4.4.5 Project organization
40

 The organizational structure of labor-based projects

differs from that of equipment based projects.
 The size and structure of the organization will vary
with the size of the project. A typical labor-based
project will have the following personnel
- gang leaders
- supervisors
- senior supervisors
- engineer
 Continued…
41

 For a typical labor based road project the following

number of supervisory staff would be needed for a
project employing about 1000 workers:
-one engineer
- three senior supervisors
- 10 to 12 site supervisors
- 40 to 50 gang leaders
 Continued…
42

Planning and control

 For labor-based works, careful planning is particularly
important. Planning should be done using uniform
procedures on a monthly, weekly and daily basis. Further
more, the progress and the use of resources must be
controlled. The control process will take place at all levels
of the organization hierarchy, and to enable this a flow of
reports must be established. A good reporting system is
particularly essential in a program with many small sites
as the project management cannot visit each site often.as
one moves up the hierarchy of plans and reports, the
information will be more and more condensed.
 Continued…
43

Labor recruitment
The recruitment of labor can be done in various ways.
The involvement of the local administration and
community leadership to the maximum extent possible
is strongly recommended. Recruitment should be
announced formally and well in advance of the start of
the works. If the number of workers applying is greater
than needed, a ballot system(selection by
lottery)should be applied.