1. Introduction and Applications

2. 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

3. 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

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

5. 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

6. 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.

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

8. HDM-4 Series

9. 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

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

11. 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

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

13. Optimum Transport Costs
Total
Optimum
Road Works
Road User
Design Standards

14. 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

15. 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

16. Bias and Precision 13 13

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

18. 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

19. 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

20. Calibration: Hierarchy of Effort

21. 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

22. Sensitivity Classes

23. 21 21

24. 22 22

25. 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

26. 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’.

27. 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

28. 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.

29. 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

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

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

32. 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

33. 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

34. Diagnostic of the Network

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

36. Consequences to the Network

37. Consequences to the Users

38. Impact of Budget Levels

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

40. 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

41. Work Programme Output
2003
2004
2005

42. 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)

43. 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.

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

45. 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

46. 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

47. http://hdm4.piarc.org http://www.bham.ac.uk/isohdm http://lpcb.org
Web sites: