Economic Feasibility Analysis of Highway Project using Highway Development and Management (HDM-4) Model

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Economic Feasibility Analysis of Highway Project using Highway Development and Management (HDM-4) Model

Pratiksha. R. Patil

Dept. of Civil-Construction Management Engineering Rajarambapu Institute of Technology,

Maharashtra, India

Prof. Dhananjay. S. Patil

Dept. of Civil-Construction Management Engineering Rajarambapu Institute of Technology,

Maharashtra, India

Abstract A well-developed transportation system plays vital role in economic development of the country. The huge increase in vehicular population creates traffic congestions on city roads. Thus, to reduce traffic bottleneck, creation of new road infrastructure as well as improvement of existing one has long term economic and social benefits. The economic benefits are calibrated on the basis of Economic Internal Rate of Returns (EIRR). The Mumbai and Pune are the major cities of Maharashtra state, due to economic and industrial development in those cities faces frequent and heavy traffic jam on highway connecting to both cities. The scope of present study consists of evaluating the impact on traffic and checking economic viability of the project. Strengthening and widening for six lanes flexible pavement which named as, Mumbai Pune section of NH-4. The HDM-4 is software used for checking the engineering and economic viability of the investment in this road project. It was observed that results obtained with improvement alternatives are economic viable.

Keywords Traffic congestions; Economic Internal Rate of Returns (EIRR); HDM-4 software; Economic viability; Social benefits.

  1. INTRODUCTION

    Highways are the dominant mode of transportation in India. Due to improvement in transportation network, reduction in transportation costs can be realized in numerous ways, such as reduction in travel time, decrease in vehicle operating costs, increased safety and reduction in the level of environmental pollution. Improvement of highway network bring economic benefits in long-term by raising the productivity, innovation, lower prices, increases the income and overall creates more jobs thus bring more boom to the economy.

    The decision-making process for development of best suitable infrastructure strategy for highway section suffers from lack of customized economic evaluation tools. The Word Banks Highway Development and Management Tool (HDM4), developed by the International Study of Highway Development and Management (ISOHDM) funded by World Bank, presents a good frame work for economic evaluation of road investments on improvements.

  2. OVERVIEW OF HDM-4

    HDM-4 is a computer software for Highway Development and Maintenance Management System. It is a decision-making tool for checking the Engineering and Economic viability of the investments in road projects. The World Bank for the global use has developed it. Following are the three main areas of analysis in HDM-4 which can be undertaken using the following applications: Project analysis, Programme analysis and Strategy analysis:

    World Bank for the global use has developed it. Following are the three main areas of analysis in HDM-4 which can be undertaken using the following applications: Project analysis, Programme analysis and Strategy analysis:

    • Project analysis: Project analysis allows the users to assess the physical, functional and economic feasibility of specified project alternatives by comparison against a base case (do nothing). The project analysis can be done for maintenance of existing roads, improvement of existing roads, new construction, Stage construction, Project evaluation.

    • Program Analysis: Multi-year rolling program for road network through maximization of NPV/Cost ratio. It deals primarily with the prioritisation of a defined long list of candidate road projects into a one-year or multi- year work programme under a defined budget constraint.

    • Strategic Analysis: Analysis of whole network for long term planning under different budget scenarios.

  3. STUDY AREA

General

Mumbai and Pune cities situated at western part of Maharashtra and is a section of NH-4 as shown in Fig. 1, having total length of 111 Kilometre. The project road lies between 18°55' longitude and 72°54' latitude.

Vehicle Fleet Data

The vehicle fleet data included the collection of traffic volume count & growth factors, basic vehicle characteristics and economic cost details of vehicles and as shown in Table III, IV and V respectively.

TABLE III TRAFFIC VOLUME COUNT & ANNUAL GROWTH RATE

Vehicle Type

Traffic Composition (%)

Annual Growth (%)

Two-Wheeler

1.22

2

Car / jeep

29.77

6

LCV

15.35

4

Mini bus

0.98

3.5

Trucks

11.35

4

Govt. Bus

4.56

3.5

Private Bus

5.03

3.5

3 Axle

15.82

5

MAV

14.4

5

Climate

Fig. 1. Google Image of Study Area

Project Analysis

In set up to the analysis, the Base Case (Without improvement) is compare With improvement i.e. strengthening and widening to six lanes with paved shoulder of flexible pavement is confirmed and a discount rate of 12 percent is specified. While running the project analysis, comparison is done against the Base Case, and reports are

Climatic condition parameters are represented in Table I.

Parameters

Value

Temperature range

20.7-35.8

Moisture Classification

Arid

Yearly Precipitations

1445 mm

Typical Moisture Index:

62-70

Parameters

Value

Temperature range

20.7-35.8

Moisture Classification

Arid

Yearly Precipitations

1445 mm

Typical Moisture Index:

62-70

TABLE I CLIMATE PARAMETER VALUES

generated.

  1. SOCIO ECONOMIC BENEFITS

    IV. INPUT DATA

    The input data for HDM-4 Model consists of various parameters which are classified as below,

    Road Network Data

    The road network data included road Inventory data, road geometric details, structural evaluation, pavement condition and evaluation of pavement material as given in Table II.

    Pavement Type

    Asphalt Mix on Stabilised Base (AMSB)

    Surface class

    Bituminous

    Length (km)

    111

    Carriageway Width (m)

    24

    MT AADT

    44940

    Rise Fall (m/km)

    30

    Avg.horizontal curvature (deg/km)

    15

    Pavement Type

    Asphalt Mix on Stabilised Base (AMSB)

    Surface class

    Bituminous

    Length(km)

    111

    Carriageway Width (m)

    24

    MT AADT

    44940

    Rise Fall (m/km)

    30

    Avg.horizontal curvature (deg/km)

    15

    TABLE II ROAD NETWORK DATA

    The main of objective of the project is to improve the performance of the highway network. Some of expected socio-economic benefits of the project are being enumerated out as below:

    • All the road users will benefit from the proposed improvement through increased comfort and reduced travel time.

    • The society will benefit economically from the saving in vehicle operating costs due to enhanced speed and better geometric.

    • The project also will open up the areas adjacent to the project road to increased economic activity.

    • Local communities will have greater access to public infrastructure and increased mobility through enhanced transport facilities.

      TABLE IV VEHICLE FLEET BASIC CHARACTERISTICS

      Vehicle Type

      Two- Wheeler

      Car / jeep

      LCV

      Mini bus

      Trucks (2 Axle)

      Govt. Bus

      Private Bus

      Trucks (3 Axle)

      MAV

      No. of Wheels

      2

      4

      4

      4

      6

      10

      10

      10

      18

      No. of Axle

      2

      2

      2

      2

      2

      3

      3

      3

      4 to 6

      Tyre Type

      Radial

      Radial

      Radial

      Radial

      Radial

      Radial

      Radial

      Radial

      Radial

      Service Life (Years)

      10

      10

      10

      8

      10

      10

      10

      10

      10

      Annual Working hours

      400

      550

      1300

      850

      1200

      1750

      1700

      2050

      1650

      Annual Km

      10000

      23000

      30000

      34000

      40000

      70000

      72000

      86000

      81000

      No. of Passengers

      1

      3

      0

      20

      0

      40

      40

      0

      0

      Private-Use percentage

      100

      75

      50

      25

      0

      0

      25

      0

      0

      Work-Related passenger trip

      0

      25

      50

      75

      100

      100

      75

      100

      100

      ESAL factor

      0

      0.000442

      0.01

      0.04

      1.25

      0.8

      0.8

      2.28

      4.63

      The Operating Weight (Ton)

      0.2

      1.2

      1.5

      2.5

      7.5

      10

      10

      13

      28

      TABLE V ROAD USER ECONOMIC COST DATA FOR REPRESENTATIVE VEHICLES

      Name

      Two-Wheeler

      Car / jeep

      LCV

      Mini bus

      Trucks

      Govt. Bus

      Private Bus

      3 Axle

      MAV

      New Vehicle Cost

      50000

      600000

      400000

      1000000

      1200000

      1800000

      2200000

      1500000

      2000000

      Tire Cost

      1500

      5000

      3500

      10000

      14000

      20000

      25000

      18000

      18000

      Fuel (per liter)

      76

      76

      70

      70

      70

      70

      70

      70

      70

      Lubricating Oil (per Liter)

      100

      150

      150

      150

      150

      150

      150

      150

      150

      Crew Wages (per hr.)

      0

      50

      70

      70

      70

      70

      70

      70

      70

      Annual Overhead

      1400

      240000

      120000

      450000

      360000

      540000

      660000

      450000

      600000

      Cargo Holding (per hr.)

      0

      0

      8.42

      0

      26.31

      0

      0

      58.34

      58.34

      Passenger Working (per hr.)

      75

      218.7

      0

      145.8

      0

      121.48

      130

      0

      0

      Passenger Non-working (per hr.)

      20

      49.35

      0

      32.9

      0

      27.4

      32.5

      0

      0

  2. RESULTS & CONCLUSION

This research paper deals with checking economic feasibility of highway project. As it is important to evaluate economic efficiency of road construction for decision maker to decide whether the proposed is credible of investment keeping in view of social benefits. The proposed project road strengthing and widening from 4 lane flexible pavement to six lanes of Mumbai-Pune section of NH-4. In order to find results both options of Without improvement and with improvement are compared with each other. However, economic analysis is also recommended that analysis period should not be too long, that it may find inaccurate results, so 20-year analysis period is considered. The summary of Economic Internal Rate of Return (EIRR), as investment option for life cycle cost analysis is presented in Table VI and output summary of economic analysis is as shown in Fig. 2.

TABLE VI RESULTS OF ECONOMIC ANALYSIS

Section Name

Net Economic Benefit (12% Discounted Rate)

Economic Internal Rate of Return (EIRR)

Mumbai Pune Section of NH-4

23,834.62

24.5%

As generated results shows Economic returns are acceptable for all components and calculated Economic Internal Rate of Return (EIRR) is more than 12% which is benchmark for rate comparison and substantially proves the project is economically viable for proposed improvement. Furthermore, the Highway Development & Management (HDM-4) tool can forecast budget allocation over entire analysis period and plays important role in selection of optimum budget constraints.

Fig. 2. Output Summary of Economic Analysis

ACKNOWLEDGMENT

I take this opportunity to thank my research guide cum Head of the Program Prof. D. S. Patil and Head of the Department. Dr. P. D. Kumbhar for their valuable guidance and for providing all the necessary facilities, which were indispensable in the completion of this research work.

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