Highway Costs

Spring 2015

Highway Transportation Costs

Type of Cost Examples

Highway investment cost Engineering design, ROW, grading, drainage, pavement

Highway maintenance cost Mowing, lighting, care of roadside parks

Highway user costa) Motor vehicleb) Travel timec) crashes

a) Fuel, lubrication, tiresb) Vehicle-hours unit value of timec) Crash rate versus unit crash costs

Transit capital costs Terminals, shops, administrative offices

Transit operating costs Driver’s wages, maintenance of buses

Transit user costsa) Transit money costsb) Transit travel time

costs

a) Auto running costs to get to terminals, sum of fares

b) Time waiting for bus, time riding buses

HIGHWAY USER COSTS

Severity Cost (Y2009)Death $1,290,000Non-Fatal Injuries

$68,100

PDO $8,200

Direct Crash Costs (per person)

Type Cost (late 70s)Person-hour $2.40*Persons-vehicle 1.25Total $3.00

Value of Time

* $7.00 per single-unit trucks, $8.00 for combination trucks (include wage and benefits for drivers)

HIGHWAY USER COSTSValue of Time

$21.73 for PC and $31.71 for trucks

Comprehensive Crash Costs (per person)Type Cost (Y2012)

Death $4,538,000Injury A $230,000Injury B $58,000Injury C $28,000No injury $2,500

http://www.nsc.org/news_resources/injury_and_death_statistics/Pages/EstimatingtheCostsofUnintentionalInjuries.aspxhttp://www.nsc.org/NSCDocuments_Corporate/Estimating-the-Costs-of-Unintentional-Injuries-2014.pdf

USER BENEFITSUnit highway user cost:

Where,HU = Highway user costs in dollars per 1,000

vehiclesB = basic section costs (travel time, vehicle running

costs as a function of highway geometric characteristics)

A = Crash costsL = length of section T = Transition section costs due to change in speed between adjacent sectionsD = additional costs caused by delay at

intersections

( )HU B A L T D= + + +

USER BENEFITSUser Benefits (between two alternatives):

Where,U0 = user cost per unit of traffic without the

improvementU1 = user cost per unit of traffic with the

improvementV0 = traffic volume without the improvementV1 = traffic volume with the improvement

1oU HU HUD = -Induced and Diverted Traffic (may need to take average traffic volumes between alternatives):

( ) ( )11user benefits

2o

o

V VHU HU

é ù+ê ú= - ê úë û

Wright & Dixon (2004) Figure 4-1

Basic Section Costs (B)

Wright & Dixon (2004) Figure 4-2

Section Transition Costs (T)

Wright & Dixon (2004) Figure 4-3

Intersection Related Costs (D)

Wright & Dixon (2004) Figure 4-4

Intersection Related Costs – Idling (D)

Important Economic Equations

1 n

FPi

Present Value of some future single payment:

1 1

1

n

s n

iP A

i i

Present Value of a series of uniform annual end payment:

Present Value Factor when user benefits change from year to year:

( ) 1r i n

gePWr i

ln

rY

r = average growth rate, = future annual value estimate/first year value,Y = number of years between estimates

Benefit-Cost Ratio

PV UBC PV I PV M PV R

Where,

PV = Present value

ΔU = user benefits, the reductions in highway costs

ΔM = increase in annual maintenance, operating and administrative cost due to investment

ΔR = increase in residual value due to the project at the end of the project life

ΔI = increase in investment costs due to the project

EXAMPLE

A highway agency is considering eliminating an S-Sharp curve on a multilane highway. The total construction cost for the improvement is estimated to be $2 million and will be incurred at the inception of the project. Annual maintenance costs are anticipated to be $2,000 less after the improvement because the elimination of the curve reduces pavement and guardrail damage.The characteristics of the proposed alternatives:

Key Assumptions• Two curves have same geometry: can be

analyzed together• There is no speed differential for passing one

curve to the other• The design speed increases from 50 mph to 60

mph for the alternative design (#1)• One-way hourly volume is equal to the ADT

divided by 18 (the number of hours used for the analysis)

• The capacity is reduced in year 20 to reflect normal deterioration of the roadway

TRAFFIC DATA

CALCULATION OF USER COSTS

Basic Section Costs – Alternative 0 Year 1

3

71 20

B = 3 + 71 + 20 + (27.8 x $3/hour) = $177.4

27.8

CALCULATION OF USER BENEFITS

Assuming a 25-year analysis period and a 4-percent discount rate, the present value of benefits is then PWg x first year of project:18.7 x $172,827 = $3,231,865For two-way traffic:2 x $3.231,865 = $6,463,730

Note:

$232,190 $172,827 1.34 ln(1.34) (20 1) 0.0155r (0.0155 0.04)25 (0.0155 0.04) 18.7gPW e

CALCULATION OF PROJECT-RELATED COSTS

NET PRESENT VALUE OF PROJECT

NPV = $6,463,730 – $1,718,198NPV = $4,745,532BENEFIT-COST RATIOB/C = $6,463,730 / $1,718,19NPV = 3.62 > 1

UPDATING USER COSTS

Wright & Dixon (2004) Table 4-9

UPDATING USER COSTS

Wright & Dixon (2004) Table 4-10

UPDATING USER COSTS

Wright & Dixon (2004) Example 4-6

Construction Unit Costs

http://www.fao.org/docrep/T0579E/t0579e06.htm

Some useful websites:

http://www.dot.state.tx.us/insdtdot/orgchart/cmd/cserve/bidprice/s_0101.htm

http://www.bookmarki.com/index.asp?PageAction=VIEWPROD&ProdID=45