1. Lecture(4) Instructor : Dr. Abed Al-Majed Nassar 2009-2010

2. Measurement of System performance Infrastructure performance measurement Infrastructure performance measurement must be multidimensional, reflecting the full range of social objectives set for infrastructure system. The performance of infrastructure could be measured by effectiveness, reliability, and cost.

3. Measurement of System performance Infrastructure performance measurement Cost Reliability Effectiveness

4. Capacity and delivery of servicesQuality of services delivered The system’s compliance with regulatory concern The system’s broad impact on the community

5. Reliability A recognition of various uncertainties inherent in infrastructure’s services, is the likelihood that infrastructure effectiveness will be maintained over an extended of time or the probability that service will be available at least at specified levels through the design life Cost The costs are incurred and paid at different times and places, by different agencies and groups(e.g., users, neighbors, taxpayers), and in monetary and nonmonetary terms. When the cost is acceptable and low, this gives indication that the performance is well.

6. Examples of Measures of System Reliability Examples MeasuresType of Indicator, Measure Engineering safety factorsDeterministic Percentage contingency allowance Risk class rating Statistical, probabilistic Confidence limit Confidence probabilities Risk functions Demand peak indicatorComposite(typically deterministic indicator of statistical variation) Peak-to-capacity ratio Return frequency (flood) Fault-tree analysis

7. Examples of Measures of System Cost Planning and design cost Investment, replacement, capital, or initial cost Construction cost Equity Debt Operation cost Recurrent or O&M cost Maintenance cost Repair and replacement cost Depreciation cost Depletion cost Timing of expenditure Timing and source Discount and interest rate Exchange rate and restrictions Sources of fund Service life

8. Losses of Value of Infrastructure Facilitates Due to change in demand or change in amount and type of services requirement. Functional Occurring when better approaches (e.g, better equipment) are available to carry out the functions of the facility. Technological Due to ordinary wear and tear, corrosion from age or use Physical Due to change in the buying power of money Monetary Arising from fires, explosions, earthquakes, etc Casualty-related Resulting from changes in legal requirements related to the serviceability or outputs of machines and structures Legal

9. Cost-Effectiveness Measures for Projects of Routine Nature 1.Minimize the amount of resources required TO Achieve a given level of service Meet other requirements demanded of the particular situation 2.Maximize the level of services Aims of Cost-Effectiveness Measures

10. Methods for comparing and Prioritizing :Infrastructure Alternatives 1 Simple Cost Basis 2 Simple Cost Basis Plus Consideration of Other Specified Engineering Factors 3 Life-Cycle Cost Basis (usually made on a present value basis 4 Cost Basis Including Adjustments Made for Additional Screening Criteria

11. 5 Additional Primarily Cost-Driven Methodologies for State and Local Infrastructure Systems 6 Full Financial Analyses 7 Economic Analyses (or Benefit-Cost Analyses( 8 Multi-Dimensional Analyses 9 Special Studies

12. Parameters commonly used for formulas involving an interest rate Interest rate per interest period. i Number of interest period. n Present sum of money. P Future sum of money at the end of n period (equivalent to P with interest rate i). F Amount of each end-of-period payment or receipt in uniform series of n period. A

13. F P n P A AAAA A AAAA F (F/P, i, n) (P/F, i, n) (P/A, i, n) (A/P, i, n) (F/A, i, n) (A/F, i, n) Sample Cash Flow Diagram

14. Common formulas for equivalency Calculations Single amount

15. Uniform series

16. Examples A project costs $40,000,000 and takes five years to construct. If all of this money is borrowed at the beginning of construction, how much money is owed by the sponsor when the project is ready to operate? If the money is borrowed in five equal installments, how much is owed? In each case, assume 7 percent interest for money borrowed. 40M$ F=?? 8M$ F=F1+F2=38,005,912+11,220,413 =49,226,325M$