Uncertainty in Economic Evaluation of Upgrading Gravel Surface Roads

by Yinyin Cai, Univ of Waterloo, Waterloo, Canada,
Ralph Haas, Univ of Waterloo, Waterloo, Canada,

Document Type: Proceeding Paper

Part of: Infrastructure: Planning and Management


Many highway links in the world are still gravel surfaced. As traffic volumes increase, the demand for upgrading these surface also increases. The challenge to highway infrastructure management is how to upgrade unpaved roads using very limited capital. It involves economic evaluation of major projects on a project level basis, and selecting between many small projects at the network level. At the project level, the economic evaluation of paving usually follows a standard approach. It involves estimating costs and benefits in advance, comparing them, and justifying the project if benefits are greater than costs. At the network level, the common practice is to use traffic volume, in terms of ADT (Average Daily Traffic), as the criterion whether to pave or not. Little attention is given to the issue of uncertainty. However, like other engineering problems, the economic evaluation of upgrading a gravel surfaced road has to deal with uncertainty in a variety of areas involving natural, technical economic, environmental and operational factors. In this study, uncertainty has been applied to errors in forecasting and the variation of several sensitive factors. Sound and rational investment decisions should take uncertainty into account so that limited fund can be used in a cost-effective way.

Subject Headings: Traffic volume | Construction costs | Highway and road management | Highways and roads | Infrastructure | Assets | Economic factors | Forecasting

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