(C10) 4.3 is affordable (R1–3) A State task or problem B List options
and select best Stage in
project C Design chosen option
Check each
constraint Verify and test design Confirm feasibility
D Revise project If a check is not passed, a new option must be
selected or the project abandoned.
E Build chosen
design
Check performance of completed project For T1 etc., refer to Table 5.1.
Stage B in Table 5.2 implies that the full range of reasonable options, or courses of action, will be examined. The general assessment of proposals will first be conducted using the broad techniques discussed in Chapters 31 and 32. In particular, a transport systems analysis in the terms of Section 31.3, and the subsequent application of Criteria 1 and 2 to its results, will mean that the problem or task to be addressed and its proposed solution are both clearly defined. These cover the engineering, economic, social, environmental, and planning aspects of the proposal. Criteria 3 and 4 then determine whether the proposed solution is appropriate and rely on procedures described in Chapters 6 and 30.
When a set of acceptable proposals for a suite of future projects has been established, the next road planning requirements are to determine the priorities for these projects and the funds to be allocated to them. This is done in terms of the overall objectives described in Table 5.1 and the specific needs of the local road network. Next, a benefit–cost analysis is commonly used to make monetary comparisons between specific proposed projects. This process is described in Section 5.2.3 below. If only incremental changes to the road network are being considered, Section 33.5.8 will show how their economic aspects can be explored by a comparison of marginal benefit–cost ratios.
Whilst all these processes are in train, every effort should be made to reduce the period of community uncertainty, concern, and conflict, and to minimise the effects of planning blight (Section 6.3).
Road Needs 53 5.2.2 The assessment system
Having tentatively selected a proposed road scheme, its merits can be assessed by modelling its operations over its intended life (Sections 14.6.2 & 26.5.2) and predicting the cash flows needed to maintain and operate it over that life. The question that can then be addressed is:
‘During its intended life, will the proposed road and its associated regime of operations, maintenance, rehabilitation, and improvement:
* deliver its intended traffic and economic benefits and stay within the given social and environmental constraints, as measured by pre-defined evaluation criteria (or performance standards),
* satisfy the Road Administration’s policy directives, * be within budget,
* be insensitive to possible changed circumstances (e.g. how would the outputs vary if the underlying assumptions varied within feasible limits), and
* address new issues raised by external parties during the proposal stage, particularly via the environment impacts process (Section 32.1)?’
This is a broad scope and to be useful, assessments need to focus on the key issues and objectives involved (Section 31.1) and on the specific decisions that will face the relevant decision-maker. In addition, the evaluation must somehow draw together all the disparate issues discussed above — methods for doing this are outlined in Sections 5.2.3, 32.1.2 and 32.1.3.
A flow chart for resolving these questions and processes within a governmental structure is shown in Figure 5.1. The chart provides a logical path for policy decisions and, importantly, includes a mechanism for the adjustment of the performance standards. Note that the chart is for a specific road proposal and presupposes that the system, network, corridor, and route decisions discussed in Section 5.1 have already been made.
In particular, Figure 5.1 shows how the basic decisions stem from Government setting policy directives and funding levels for its Road Authority. An annual suite of road proposals will spring from these directives and funding levels. A model corporate structure would allow the Road Authority to proceed with a proposal that meets directives and funding levels. The Authority would only return to Government if it found that the funds allocated did not match the objectives and policy directives given. Government may also act at a project level as well as at a policy level. Many governments are more interventionist than the above model. For example, for pragmatic electoral reasons many governments will be concerned to see, and perhaps influence, the projects in the annual road program. It is essential that such Governments be presented with all the relevant factors, the viable options, and the implications of action and inaction. The next Section describes a framework for doing this.
5.2.3 Assessment methods
Assessments must address the issues raised in Section 5.2.2. Many of these are not quantifiable and decisions must be based on judgement rather than calculation. However, whether a road proposal is economically warranted can be assessed in a numerate manner by a benefit–cost analysis (BCA), usually performed by the Road Authority in selecting projects (Figure 5.1). The theory behind BCA is discussed in detail in Section 33.5.8. Basically, it compares the benefits and costs of a project over its life, calculated using the
Handbook of Road Technology
54
Figure 5.1 Government / Road Authority / Engineering decision-making process.
net present value (NPV) method. Benefit–cost analysis provides a powerful method for ranking and prioritising proposals in order to ensure the optimum economic allocation of the available resources. Because BCA focuses on monetary factors, it is a single criterion method using the benefit/cost ratio (BCR) as the criterion. Following Figure 5.1, the standards adopted can also be set via a benefit–cost analysis.
The first task in applying a BCA is to identify the appropriate benefits and costs. For a typical road project, these are given in Table 5.1. The next major task is to measure the identified benefits and costs, particularly the more intangible ones, and assign money values to them. The listing of benefits and costs in Table 5.1 reveals the major distributional problem associated with BCA in that those who gain the benefits (e.g. passing motorists) are usually a different group from those who pay the costs (e.g. local residents). Distributional factors cannot be properly included in a benefit–cost analysis and must therefore be separately assessed for each project. Another more general distributional problem is that the benefits may not be distributed in a manner consistent with the principles of welfare economics — that is, the benefits may go to people considered relatively undeserving in the eyes of the community. This can partly be
Road Needs 55
overcome by weighting the benefits and costs to give constant marginal utility (Section 33.5.1) to all recipients. The weights would be determined in accordance with income utilities and the community’s views of equity (Stanley et al., 1973).
If a benefit–cost analysis is either not done (typically because of either the assessment, quantification or distributional issues mentioned above), or considered inadequate (typically because it struggles to cover social and environmental factors), then the ranking and prioritising process must rely on the decision-maker’s judgement alone or on that judgement aided by defined processes known as multi-criteria (or sufficiency or deficiency) analyses (MCA). Sufficient information must be presented to allow the selection of a proposal to be based on adequately informed decision making. Nevertheless, the MCA process will still usually require the decision-maker to exercise considerable judgement and perception (see also Section 32.1.3).
An MCA begins by tabulating all the proposals and all their associated objectives. The objectives will include positive performance targets, assessment criteria, and the degree of minimisation of issues, impacts, and consequences (Table 5.1). The goals achievement analysis version of an MCA then lists how well each proposal meets the various objectives. A second MCA method is the elimination procedure which uses the tabulated objectives to compare individual proposals progressively and in pairs, to determine which projects tend to naturally dominate the others. Projects which are clearly out-performed by other projects are eliminated, leaving a smaller list for final selection.
One sub-method then gives a score between 0 and 10 to indicate how well each performance target is met. The planning balance sheet (or decision framework, Section 32.1.3) method then assigns relative weights to each objective. The scores are multiplied by these weights to give an overall rating of sufficiency. A pavement example of the method is given in Section 14.5.1. A social audit (or social impact study) can be conducted to check how well the project has met non-quantifiable targets such as:
* social, distributional, and equity issues, * environmental issues,
* wider policy issues (e.g. defence and national development),
* externalities such as pollution, congestion, and subsidies (Section 33.5.2), and * local issues such as significant changes in a community’s well-being or concern
(Section 32.5).
An approach for remote regions accepts that roads in these areas provide a social service and assumes that a certain amount of money is available to meet this social obligation. It then ranks the road schemes in order of their priority for the use of that money. The ranking can be based on such objective criteria as the resident and tourist populations served, the perishables saved and the freight tonnage moved. For example, the technique could positively weight the accessibility that the road provides for social, recreational and medical services and deliveries, the benefits from tourism, and the value of the export of perishable produce.