Explanation

The Queensland Transport Department is trying to figure out how much it will cost to build a new 4-
lane motorway that connects a Lithium mine to a coastal port. There are two different ways they can
design the motorway, and they need to decide which option is more cost-effective in the long run.

The motorway is designed to last for 100 years and is expected to have 10,000 vehicles driving on
each lane every day. Out of these vehicles, 10% will be large trucks carrying Lithium. These trucks
are called B double articulated rigs and they will have a harder time driving on the motorway when
there are hills and sharp turns. This will make them use more fuel and drive slower.

Cars and buses will also drive on the motorway, but they won't be affected as much by the hills and
sharp turns, so we can ignore them for now.

To find out which motorway option is cheaper in the long run, we need to think about three things:

1. How much it will cost to build each motorway in the first place

2. How much it will cost to keep each motorway in good condition for the next 100 years

3. The extra cost of driving the Lithium trucks on one motorway versus the other. This extra cost
is $30 per trip.

You have a choice of 2 options for your Motorway route:

1. M1 – up & over the mountains

Option 1 for the Motorway route is called M1. It goes up and over the mountains, and is the
most direct route. It is 100km long and has 5% grades, which means there are steep hills
going up and down. There are also several tight curves in the road. The speed for heavy trucks
on this route is limited to just over 71 km/hour on average because of the design of the road.
It will cost $10 million for each kilometre of road, including all 4 lanes. The cost for heavy
trucks to travel one way on this route is $330. This cost includes fuel, truck maintenance, and
driver salary. The fuel cost is $200, because the trucks use 2 litres of fuel for every kilometre
they drive. The maintenance cost for the truck is $60, which is calculated based on the
distance driven and a 20% extra cost for the steep and curvy terrain. The driver's salary is $70,
which is based on an hourly rate of $50.
 2. M2 - around the mountains
The second option for the motorway is M2, which goes around the mountains instead of
going over them like the first option, M1. This option is 150 kilometers long, and it has a flat
to 1% gradient which means there are no steep hills. The road has sweeping curves and the
speed limit for heavy trucks is 100 kilometers per hour on average. The build cost for this
option is $8 million per kilometer, which includes all four lanes. The cost for a heavy truck to
travel one way on this road is $300. This cost includes fuel, which is $150 for 1 liter of fuel
per kilometer, truck maintenance, which costs $75 per kilometer for flat terrain, and driver
salary, which is $75 per trip at a rate of $50 per hour

You are to show your calculations for the following in the Table below:

1. The road build cost is the amount of money needed to construct each motorway. It is given in
the problem as $10 million per km for M1 and $8 million per km for M2.

2. The road maintenance cost over 100 years is calculated as 2% of the road build cost per year,
divided by a factor of 6. This means that every year, we need to set aside 2% of the initial
build cost of the road to cover its maintenance for that year. To get the value of this cost in
today's dollars, we divide it by a factor of 6, which accounts for the compound inflation rate
of 2.6%. This formula can be written as:

Maintenance cost = (0.02 x build cost) / 6

3. The extra cost of heavy trucks per year over 100 years for M1 is $30 per trip. To get the value
of this cost in today's dollars, we divide it by a factor of 6, which accounts for the compound
inflation rate of 2.6%. This formula can be written as:

Extra cost for M1 = ($30 x number of trips per year) / 6

4. To determine which motorway is cheaper in the long run, we need to add up the road build
cost, the road maintenance cost over 100 years, and the extra cost of heavy trucks per year for
M1. Whichever motorway has the lower total cost is the more cost-effective option.