Transcript Document

AT Benefit Cost Analysis Model
Presented by Bill Kenny, Director:
Highway Design, Project Management and Training Section
Design,
Project
Technical Standards
Branch Management and Training,
Technical Standards Branch.
Background
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BCA is an analytical tool to provide information to decision
makers on the economic merits of a proposed investment or
alternate investment options.
BCA Model is intended to assist in the economic evaluation
of various projects to determine:
- Which project options are economically viable.
- Which projection option is preferable from an economic
point of view.
Process for updating
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Review existing models currently available and in use to
evaluate road and bridge infrastructure projects.
Evaluate these models against a set of criteria to
determine a preferred approach to either use or modify
one of these models, or modify the Ministry’s current
model.
Findings: it is optimal to update and modify the Ministry’s
current benefit cost model on a regular basis.
Model Development
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Reviewed the types of projects that economic analysis
would be applied to.
Identified the major components of analysis that should
be included in the updated model.
Add model analytical functionality.
Develop an approach for how the user will interact with
the model.
Prepare documentation on how the model can be used
and how to interpret analysis results.
Model Development (Con’t)
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Excel (Microsoft) based
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Long term (80 years)
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Evaluate up to 3
alternatives
Flexibility to define project
and scenarios
User interface
Various result outputs (e.g.
NPV, benefit/cost ratio,
internal rate of return,
payback period)
Model Development (Con’t) – Analysis
Components
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Capital Investment
Rehabilitation Costs
Operating & Maintenance Costs (2 options)
Road User Costs
• Vehicle Operating Costs (2 options)
• Travel Time Costs
• Collision Costs
Environmental Costs
Project and alternative investment costs can be entered for user
defined categories over the expected period of construction for the
project.
Rehabilitation costs can be assigned to each project by type of
project. These costs are specified by the user and will be added to
project costs based on their expected timing.
Maintenance Costs used in the Ministry’s RODA program can
be selected for each project or alternative – Case 1
Maintenance Costs can alternatively be defined for each
project or alternative using customized categories – Case 2
Vehicle Operating Costs based on the Ministry’s original
benefit/cost model taking into account road features
such as surface type, gradient and curvature. – Case 1
Alternatively, vehicle operating costs can be defined as fuel
and non-fuel vehicle operating costs. – Case 2 based on
CalTrans
Travel Time Costs include consideration of the vehicle mix,
vehicle occupancy and work/business and other (non work)
trips.
Collision costs are based on Road Type and whether the road
is in either an Urban or Rural area – 2010
Severities are for illustration only (not real)
The vehicle emission costs are user defined
Emission costs per liter of gasoline
Emission
CO (Carbon Monoxide)
CO2 (Carbon Dioxide)
NOx (Nitrogen Oxides)
PM10 (Particulate Matter)
SOx (Sulphur Oxides)
VOC (Volatile Organic
Compounds)
Cost Per Tonne
$
94.10
$
38.70
$
29,304.20
$
237,746.29
$
99,237.88
$
1,916.12
Gas Emission
Factor (kg/L)
0.927
2.289
0.0241
0.00148
0.00124
Cost Per Litre
of Gas
$
0.09
$
0.09
$
0.71
$
0.35
$
0.12
0.0401 $
$
Sources: 1. CalTrans, 2. Environment
Canada, 3. Environment Australia.
0.077
1.43
Emission costs per liter of diesel
Emission
CO (Carbon Monoxide)
CO2 (Carbon Dioxide)
NOx (Nitrogen Oxides)
PM10 (Particulate Matter)
SOx (Sulphur Oxides)
VOC (Volatile Organic
Compounds)
Cost Per Tonne
$
94.10
$
38.70
$
29,304.20
$
237,746.29
$
99,237.88
$
1,916.12
Diesel Emission
Factor (kg/L)
0.0156
2.6630
0.0725
0.0051
0.0048
Cost Per Litre
of Diesel
$
0.00
$
0.10
$
2.12
$
1.21
$
0.47
0.0053 $
$
0.01016
3.93
BCA Results
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Results for each Alternative (up to 3)
Three Scenarios for each Alternative
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Vary major analysis components (e.g. investment
costs, discount rate, traffic growth, etc.)
Benefit Cost Analysis Results
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Net Present Value
Benefit Cost Ratio
Internal Rate of Return
Payback Period
Net Present Value / Capital Cost (Primary Indicator)
Model Parameter and Value Updates
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All model parameters and values are being updated.
• Decisions about how model parameters are specified
• Identifying reliable sources of data
• Converting all values to current year $
On-going: these parameters will need to be revisited and
values updated – ideally on an annual basis.
Model and Analysis Documentation
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The value and reliability of any analysis depends on
transparency of analysis inputs and calculations.
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All model calculations are traceable in the model.
Standardized input and output results will allow for a
review of any analysis completed.
The model will be accompanied by:
• User Guide
• Technical Report
Implementation
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The Model provides an analytical framework to
consistently evaluate road and bridge projects.
Model does not run automatically.
Quality of the analysis depends on quality of the definition
of the project alternatives and the model inputs.
Veracity of the analysis results will be the responsibility of
analyst.
Interpretation of results will be the responsibility of the
analyst.
QUESTIONS?