1. Long-Life Pavement Seminar CEDEX, Madrid, 25 th February 2008 ELLPAG - Economics of Long-Life Pavement By Nicolas Bueche, EPFL - LAVOC Switzerland Switzerland

2. Presentation content 1. Introduction to economic analysis  Cost Benefit Analysis (CBA)  Existing models for CBA and model choice for long-life pavements  First conclusions on CBA models 2. Economics of semi-rigid pavements  Cost Benefit Analysis (CBA) methodology  Development of scenarios  Output from the CBA  Conclusions and recommendations 3. Economics aspects of rigid pavements

3. Introduction to economic analysis  Phase 1: Fully-flexible pavements  Consideration of economic aspects through national reports  Method developed to provide a Europe-wide technique for the CBA of LLP, in comparison with determinate life pavements (DLP)

4. Cost/Benefit Analysis (CBA) Following aspects must be taken into consideration:  Initial (construction) costs  Loss of capital value – residual value  Maintenance and traffic management costs (agency costs)  Costs due to road user delays at road works  Costs due to accidents  Environmental economical aspects  Some of the costs are relatively easy to determine and calculate but for other types the exercise may be more difficult…

5. Construction costs  Thickness of LLP could be less than for DLP  Not necessarely additional costs for LLP (UK)  Some other countries anticipated higher construction costs (BE, DK, PL)  More careful construction practices that may increase the unit costs Agency costs  No structural maintenance  Reduction of maintenance costs not necessarily expected (high quality work needed)  No major difference in traffic management costs expected by UK and Belgium (but operations quicker that may reduce costs)

6. Loss of capital value  FORMAT project: description of the methodology for the development of a model for evaluating pavement value  helps the assessment of the current value of pavement Accident costs  Some models exist  Very dependent on the traffic and works management  Published costs usually available and fairly high  NL: €1.3M in 1997 for a fatal accident  UK: currently over €1 for a fatal accident

7. Costs due to road user delay Environmental costs  Currently no existing global models  Difficult to quantify in monetary terms  Approach not in use currently but some figures and studies available, especially for noise appreciation and CO 2 emission (micro-simulation)  Existing models based on comparing traffic flow and residual road capacities. However, these models neglect/underestimate probabilistic aspects of traffic demand (PAV-ECO project, ISOHDM, …)  Statistics usually available in EU countries  NL assessed at €13.5/hour per user

8. Existing models for CBA  Enquiry concerning existing simple models, that could be used for CBA on LLP  Following aspects considered:  Asset loss  User costs  Accident costs  Environmental costs  Agency costs

9. CBA model for LLP Economical Assessment Only UK considered specifically economic aspects of LLP:  Pavement maintenance limited to the regular replacement of the surfacing  Underlying layers regarded as permanent  Surface treatment costs significantly less than structural treatment  Estimated benefits for new pavements: construction benefits: €50M construction benefits: €50M maintenance costs reduced: €72M maintenance costs reduced: €72M  Estimated combined benefits for new and existing pavements: €350M / 10 years for 10.000 km

10. Selection of adapted CBA model Review of existing CBA models

11. Proposed model - PASI  Project Analysis System International  Developed by OECD - long-life surfacing group (2002)  CBA model for long-life pavement economic asset valuation and whole life costing:  developed for various environments and countries  each component (sub-model) is a "simple model"  each component (sub-model) is a "simple model"  environmental impact not considered  environmental impact not considered  simplistic consideration of some elements  simplistic consideration of some elements

12. First conclusions on CBA models  Results of the first phase of the project  Different models identified (PASI, FORMAT,..)  All significant parameters not considered by these models  Development of a specific model for economical assessment of LLP needed  In a first stage, one of the existing model selected, adapted and used for assessing LLP in comparison to traditional alternatives (PASI)  In a second later stage, development is needed of a new model dedicated to LLP that would consider the environmental aspects as well

13. Full Cost Benefit Analysis

14. Presentation content 1. Introduction to economic analysis  Cost Benefit Analysis (CBA)  Existing models for CBA and model choice for long-life pavements  First conclusions on CBA models 2. Economics of semi-rigid pavements  Cost Benefit Analysis (CBA) methodology  Development of scenarios  Output from the CBA  Conclusions and recommendations 3. Economics aspects of rigid pavements

15. Economics of Semi-Rigid (and Flexible) pavements  Phase 2 of the project (under finalisation)  Designs in some European countries  Asphalt layer: functional characteristics and preserve the structural integrity of the structure  Hydraulically bound base layer: primary structural layer primary structural layer Asphalt layer Hydraulically bound base

16. CBA methodology and assumptions  PASI model used  Main objective: Assess the possible economic savings from the use of LLPs rather than DLPs  Indicative exercise  Maintenance schedules and costs provided from UK's experience  Construction costs not considered explicitly  All maintenance treatments occur exclusively in the bituminous layer

17. Development of scenarios Parameters defined before any analyses:  Analysis period limited to 50 years in PASI model  Discount rate: rate at which costs and benefits are converted to net present value (NPV) – 3, 5 or 7 % Parameter variation for the development of scenarios  Identification of key factors which affect the results of the analysis  Sensitivity analysis on these factors  combination of parameter values for the development of scenarios

18. Development of scenarios

19. Traffic parameters Growth rate (%) Proportion of HGVs (%) AADT (vehicles/day) Dual two lane motorway 11275,000 11250,000 112100,000 1575,000 12075,000 01275,000 21275,000 Dual three lane motorway 212100,000  Design traffic: 60msa of 80kN standard axles  Annual growth rate: 0%, 1%, 2%  Heavy goods vehicles proportion: 5%, 12%, 20%  Traffic flow (AADT): 50.000, 75.000 and 100.000  Different combinations

20. Maintenance options  Initial maintenance schedules for LLP1 and DLP1  LLP: maintenance through regular replacement of the wearing course  DLP initially designed for 20 years life  Further maintenance schedules for determinate life pavements (DLP) to investigate the effect of different maintenance options  LLP2 and LLP3: Effect of maintenance options  LLP4 and LLP5: replace upper layer more frequently than for DLP

21. Maintenance schedules

22. Scenarios for the analysis ScenarioTraffic parametersMaintenance schedule 1Base conditionsDLP1, 2, 3 and LLP1, 2, 3, 4, 5 2Discount rate = 3%DLP1 and LLP1 3Discount rate = 7%DLP1 and LLP1 4AADT=50.000DLP1 and LLP1,4,5 5AADT=100.000DLP1 and LLP1,4 6HGVs=5%DLP1 and LLP1,4,5 7HGVs=20%DLP1 and LLP1,4,5 8Growth rate = 0%DLP1 and LLP1,4,5 9Growth rate = 2%DLP1,2,3 and LLP1,4,5 103DM AADT = 100.000DLP1 and LLP1,4,5

23. Output from the CBA Base conditions Discount rate: 5% AADT: 75.000 HGVs: 12% Growth Rate: 1% User costsAccident Time delays Vehicle operation

24. Total costs for the base conditions

25. Ratio of total cost for DLP1, 2 and 3 to LLP1 ScenarioParameter value Ratio of total cost Ratio of total cost Ratio of total cost DLP1 / LLP1 DLP2 / LLP1 DLP3 / LLP1 1AllBase2.4 1.9 2Discount rate3%2.7-- 37%2.2-- 4AADT50,0002.2-- 5100,0002.4-- 6HGVs5%2.4-- 720%2.4-- 8Growth rate0%2.2-- 92%2.5 2.0 103DM100,0007.3--

26. Variation in total cost with changes to the AADT

27. Variation in total cost with discount rate

28. Conclusions of CBA  Maintenance schedule DLP1 (base case) is:  2.4 time more expensive than LLP1  Almost 2.0 times LLP5  20 % more than LLP4  The use of LLPs may generate considerable savings  Degree of saving could be up to 60 %  High potential not compromised by traffic fluctuations  LLP not appropriate in every situation (poor ground,…)  Results and conclusions broadly relevant to both fully flexible and semi-rigid constructions

29. Limitations of the analytical CBA  Model derived for DLPs and does not take full advantage of LLPs  Residual worth of DLP and LLP not considered  Elaboration of the maintenance scenarios  Frequency of resurfacing (inlay) for LLPs assumed to be similar as for DLPs  CBA conducted with typical UK costs

30. Recommendations  Disseminate the knowledge of potential benefits of LLPs  Similar studies to be carried out for other European countries with their own costs  Practical experience needs to be developed - for example through full scale trials

31. Presentation content 1. Introduction to economic analysis  Cost Benefit Analysis (CBA)  Existing models for CBA and model choice for long-life pavements  First conclusions on CBA models 2. Economics of semi-rigid pavements  Cost Benefit Analysis (CBA) methodology  Development of scenarios  Output from the CBA  Conclusions and recommendations 3. Economics aspects of rigid pavements

32. Economics aspects of rigid pavements  Quality of construction has a big influence in concrete pavements  Similar analayis procedure to be used as for semi-rigid pavements  CBA will be largely based on the experience in UK and France Poorly constructed Well constructed

33. Elaboration of scenarios  Pavement designed for 50 years life duration  Consideration of two rigid pavement types:  Jointed unreinforced concrete (URC)  Continuously reinforced concrete (CRCP)  Traffic parameters will be subset of those used for semi-rigid pavements  Different maintenance options:  Joint treatments  Surface treatments  Structural treatments  Elaboration of maintenance scenarios and PASI simulation yet to be completed

34. Thank you for your attention… nicolas.bueche@epfl.ch