Introduction and Applications

Transport and Development Transport sector is vital for economic & social development Roads constitute largest component of transport Roads require a balance of: Maintenance (or preservation) Development (or improvement) Road management requires: Consistent and rational policy objectives Sufficient and reliable funding Effective procedures & management tools

The HDM-4 Model Analytical decision-making tool, based on life cycle costs, for: Engineering and economic assessment of road construction and maintenance investments Transport pricing and regulation Physical and economic relationships derived from extensive research on: Road deterioration, The effects of maintenance activities, and Road user costs (VOC, VOT, Crash Costs) Vehicle Emissions & Traffic Noise

HDM-4 Objectives: Economic basis for selecting investment alternatives Alignments Pavement standards Road standards

HDM-4 Objectives: Standard framework for investigating road investments Minimize Road Agency and Road User Costs Traffic congestion Non-motorized transport facilities Travel times Transport costs Vehicle emissions Road accidents

History of the HDM model 2000 ISOHDM RTIM (TRRL) RTIM2 (TRL) RTIM3 The first move towards producing a road project appraisal model was made in 1968 by the World Bank. The first model was produced by MIT following a literature survey and was based mainly on a framework proposed by de Weille. The resulting Highway Cost Model (HCM) highlighted areas where more research was needed to provide a model that was more appropriate to developing country environments with additional specific relationships. Following this, TRRL, in collaboration with the World Bank, undertook a major field study in Kenya to investigate the deterioration of paved and unpaved roads as well as the factors affecting vehicle-operating costs in a developing country. The results of this study were used by TRRL to produce the first prototype version of the Road Transport Investment Model (RTIM) for developing countries. In 1976, the World Bank funded further developments of the HCM at MIT that produced the first version of the Highway Design and Maintenance Standards model (HDMII). Further work was undertaken in a number of countries to extend the geographic scope of the RTIM and HDM models, including; the Caribbean Study by TRRL which investigated the effects of road geometry on vehicle operating costs, the India Study by the Central Road Research Institute which studied particular operational problems of Indian roads in terms of narrow pavements and large proportions of non-motorised transport, and the Brazil Study funded by UNDP, which extended the validity of all of the model relationships.

HDM-4 Technology Set Knowledge Base Software Models SEE RDWE RUE

HDM-4 Series

HDM-4 Concept Predicts road network performance as a function of: Traffic volumes and loading Road pavement type and strength Maintenance standards Environment / Climate Quantifies benefits to road users from: Savings in vehicle operating costs (VOC) Reduced road user travel times Decrease in number of accidents Environmental effects The HDM-4 analytical framework is based on the concept of pavement life cycle analysis. This is applied to predict the following over the life cycle of a road pavement, which is typically 15 to 40 years: Road deterioration Road work effects Road user effects Socio - Economic and Environmental effects Once constructed, road pavements deteriorate as a consequence of several factors, most notably: Traffic loading Environmental weathering Effect of inadequate drainage system

Paved Road Deterioration Model Moisture, Temperature Aging Traffic, Loading Pavement Materials, Thickness Cracking Raveling Potholing Rutting Roughness

Vehicle Characteristics Road User Costs Model Road Geometry, Condition Driver, Traffic Flow Vehicle Characteristics SPEED Fuel & Lubricants Tire Maintenance Parts & Labor Crew Time Depreciation & Interest Passenger & cargo time COMPSUMPTION

Share of Transport Cost Components 50 veh/day 300 veh/day 5000 veh/day Agency Costs User Costs

Optimum Transport Costs Total Optimum Road Works Road User Design Standards

How Credible are HDM-4 Outputs? Depends on Level of Calibration (controls bias) Depends on accuracy and reliability of input data (asset & fleet characteristics, conditions, usage) HDM-4 has proved suitable in a range of countries As with any model, need to carefully check output with good judgement

Approach to Calibration Input data Must have a correct interpretation of the input data requirements Have a quality of input data appropriate for the desired reliability of results Calibration Adjust model parameters to enhance the accuracy of its representation of local conditions 3 3

Bias and Precision 13 13

Data & Calibration Need to appreciate importance of data over calibration If input data are wrong why worry about calibration?

Calibration Focus Road User Effects Predict the correct magnitude of costs and relativity of components - data Predict sensitivity to changing conditions - calibration Pavement Deterioration & Works Effects Reflect local pavement deterioration rates and sensitivity to factors Represent maintenance effects 5 5

Important Considerations Calibrate over full range of values likely to be encountered Have sufficient data to detect the nature of bias and level of precision High correlation (r 2) does not always mean high accuracy: can still have significant bias Primary aim: minimize bias 15 15

Calibration: Hierarchy of Effort

Calibration Levels Level 1: Basic Application Level 2: Verification Addresses most critical parameters ‘Desk Study’ Level 2: Verification Measures key parameters Conducts limited field surveys Level 3: Adaptation Major field surveys to requantify relationships Long-term monitoring

Sensitivity Classes

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Can We Believe HDM-4 Output? Yes, if sufficiently calibrated HDM-4 has proved suitable in a range of countries As with any model, need to carefully scrutinize output against judgement If unexpected predictions occur, check: Data used Calibration extent Check judgment of the expert 23 23

Applications of HDM-4 in Road Management Purpose: To optimise the overall performance of the network over time in accordance with POLICY OBJECTIVES and within budgetary constraints Typical objectives: Minimise transport costs Preserve asset value Provide and maintain accessibility Provide safe and environmentally friendly transport 1. Another way of defining the purpose would be ‘to maintain and improve the existing road network to enable its continued use by traffic in an efficient, safe and environmentally appropriate manner’.

Road Management Functions Planning Setting standards and policies Long term estimates of expenditure Programming Medium term work programmes Preparation Detailed project design and work packaging Operations Implementation of works in field 1. These are fairly self explanatory but the trainers should develop typical brief examples from their own countries. Planning - setting standards, broad network, not spatial (e.g. we are concerned with the issue ‘$x spent on the national network over the next y years would result in z% of the network having a roughness less than...’ Programming - works programmes at network level (1,5 year programmes etc) Preparation - detailed designs and work packages Operations - managing the work and scheduling work, monitoring costs etc

Role of HDM-4 1. Will be discussing the details of the different applications of HDM-4 in later sessions, but this provides an overview. HDM-4 is a decision support system and helps us with the above functions. 2. Note that HDM-4 only has its own database developed specifically for the various analyses which it carries out. It is not a road management system, or pavement management system, in its own right although data can be imported from such systems for use in HDM-4.

Standards & Policies Road pricing Vehicle regulations road use costs (to define fuel levies) congestion charges weight-distance charges Vehicle regulations axle load limits energy consumption, vehicle emissions & noise Engineering Standards sustainable road network size pavement design and maintenance standards

What is the optimal traffic threshold for paving? Technical Standards What is the optimal traffic threshold for paving? 200 300 400

How much road damage is caused by trucks? Vehicle Policies How much road damage is caused by trucks?

Strategy Analysis Objectives: The analysis of entire road networks to determine funding needs and/or to predict future performance under budget constraints Objectives: Determine budget allocations for road maintenance and improvement Prepare for work programmes Determine long term network performance Assess impact on road users 2

Strategic Analysis Approach Road Network G F P Matrix H M L Preservation Evaluation Resource Constraints Revenues, Sector budgets Development Candidates Optimal Strategy under Budgetary Constraints Optimization Module

Diagnostic of the Network

Consequences to Society What are the consequences of budget constraints? What is the recommended work program?

Consequences to the Network

Consequences to the Users

Impact of Budget Levels

Impact of Budget Allocations Feeder Roads $30m/yr Secondary Roads $35m/yr Primary Roads $20m/yr

Programme Analysis Preparation of single or multi-year road work and expenditure programmes under specified budget constraints. Objective: prioritise candidate road projects in each year within annual budget constraint Annual budgets obtained from strategic maintenance plan

Work Programme Output 2003 2004 2005

Project Economic Analysis Project types New construction, upgrading Reconstruction, resealing Widening, lane addition Non-motorised transport lanes Economic indicators Net present value (NPV) Economic rate of return (ERR) Benefit cost ratio (BCR), NPV/C First year rate of return (FYRR)

Economic Decision Criteria NPV IRR(3) NPV/C FYRR Project economic validity V.Good V.Good V.Good Poor Mutually exclusive projects V.Good Poor Good Poor Project timing Fair Poor Poor Good Project screening (1) Poor V.Good Good Poor Under budget constraint (2) Fair Poor V.Good Poor Notes: (1) Check for robustness to changes in key variables (sensitivity analysis) (2) With incremental analysis (3) IRR may be indeterminate with NONE or MANY solutions. The slide summarises the main uses of economic decision criteria. It can be seen that each criteria has its strengths and weaknesses.. The NPV’s strength is its ability to choose between mutually exclusive projects. It is however poor in dealing with uncertainty as is the case for initial project screening, when the future planning discount rate or other assumptions are relatively uncertain. Cumbersome continuous recalculations are needed to deal with project timing or budget constraints. The IRR’s strength is its ability rank projects when there is uncertainty about assumptions. It’s weakness is it ability to choose between mutually exclusive projects. The NPV/C’s strength is its ability to deal with budget constraints. It has more good points than the other criteria but it is a little more complicated to use especially with mutually exclusive projects when incremental analysis is required. The FYRR main purpose is to provide guidance on project timing- but even here it is far from being completely reliable. It is weak in all other aspects.

Project Level Outputs Sensitivity analysis results Scenario analysis Road condition indicators Road user cost details Energy & emissions

HDM-4 Limitations The model does not: Software limitations: Perform a network traffic assignment Internally cost environmental impacts such as air or noise pollution Address urban conditions (start/stop) Evaluate all benefits from very low volume roads Software limitations: Not designed as a road management database

Conclusions – Why HDM-4? Transparency of analysis Economic analysis capable of: Short, medium & long term analyses What-if analysis Internationally accepted analysis framework Availability of technical expertise Local calibration

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