DIFFERENT ASPECTS OF HIGHWAY PROJECT STUDY

PROJECT PURPOSE
Every undertaking has its own purpose and objectives. For road construction, the prime purposes are as follows: 1. To increase agricultural production 2. To induce or create employment 3. Increase commercial complementary and 4. Promote social development Increase Agricultural Production Significant land and water development increases agricultural production. Rural roads are essential development which provides incentives to motivate production and investment due to the reduction of transportation costs. Increase or Create Employment At the time of project construction, labor force will be utilized thereby creating employment in the vicinity of the project. After the completion of the project, employment will be induced again for the maintenance of the road. Farm to market roads will also induce secondary employment, i.e. more drivers and other support services will be created. Increase Commercial Complementary The expanded road networks are expected to provide increased incentives for entrepreneurs, new stores, restaurants, cottage industries, suppliers, buyers, bankers, etc. Requirements and demand for goods and services are expected to increase with more and better roads. Promote social Development Improved road accesses will open up and create new opportunities for residents from the more isolated rural communities. Mobility and interaction is expected to increase between baranggays, and between baranggays and larger towns and cities. The flow of new technology, government support services and commercial services will definitely increase.

CHARACTERISTICS OF PROJECTS
Different types of projects have different kinds of behaviour and characteristics. The following characteristics of projects are in consonance with the concept of project management: 1. Projects are non-traditional, innovative processes for development. The project manager works out independently from the normal chain of command of the organization. He exercises the power of functional departments or divisions in his decisions for given targets. He thus negotiates with the functional departments directly, cutting across staff and line hierarchies common in the classical organization. 2. Projects are complex efforts. A project produces specific results during a fixed schedule within an established budget. It cuts across organizational lines, it is a unique endeavour, not completely repetitious of any previous efforts. 3. A Project is the process of creating specific result. A project is the entire process needed to produce a new product, new system or other definite results. Both the process and the product that is the result of the process comprises the project. 4. A project has a life cycle. The life cycle of a project has an identifiable start and end points which can be related to a time scale. A project passes through several distinct phases as it matures. The life cycle includes all phases from the point of inception to the final termination and evaluation. 5. Projects need multi-disciplinary skills. A project is a complete operation by itself where the project manager acts like general manager. Pooling various skills together in a united assault to achieve objectives within a budget and timetable. These skills vary according to the nature of the project.

FUNCTIONS OF PROJECT MANAGEMENT

There are five functions of project management: 1. Planning Involves selecting objectives, strategies, policies and programs and the procedures of attaining and or achieving the objectives or goals. 2. Organizing Involves the establishing of structures as well as schedules of activities (scheduling tools, such as per-cpm and Gantt charts.) 3. Staffing means hiring of the qualified men to handle the job. Also calls for maintaining these men. 4. Directing This has to do with leadership, but there are two kinds of a leader; one is an autocratic and the other is a democratic leader. An Autocratic Leader is one who dictates and the subordinate has no choice but to follow. A Democratic leader is one who believes in a group process, interactions, and hears the voice of his subordinates. 5. Control Is the regulation and or evaluation of the subordinates in regards to the desired set-up goals or standard.

PROJECT PLANNING AND MANAGEMENT

The management of a development projects is the most critical aspect of an organization. Management is a process of attaining goals through the efficient and effective use of human, financial and technical resources. The following guidelines are presented for an effective management. PROJECT IDENTIFICATION & DEFINITIONS. Projects are conceived, selected or identified through national government planning processes or by an international assistance agency representative working with the government officials. Among the important questions to be asked covering the case history of the project are: 1. What was the primary source of the project idea? 2. Who were the individuals or groups that first initiated and proposed the project? 3. What were the major environmental factors that led to political, economic, social, technical or other considerations? PROJECT FORMULATION, PREPARATION & FEASIBILITY ANALYSIS. Once all the important information of the project were identified. It undergoes appraisals and the desired results plus the requisite resources are defined and related to the basic project formation issues as to size, location, and avail. Funding sources are also identified. Initial contract with the key linkages which will provide support to the project are established. Important information needed for analysis is obtained from the answers of the following questions: 1. Who took primary responsibility for preparing the project? 2. Where other groups or individuals involved in preparation or proposal of the project such as; a. Clients, users or beneficiaries b. Political supporters or opponents. c. Resource suppliers d. Potential project implementers. 3. What were the major variables or factors that influenced the course of the project preparation? Was it political, economic, social, and technical or others? 4. How clearly and explicitly were the purpose and goals of the project stated or defined. 5. Was a formal feasibility analysis conducted it? How comprehensive and detailed were made on: a. Technical feasibility studies. b. Financial and economic feasibility studies.

c. d. e. f.

Market and commercial feasibility studies Location studies Political feasibility assessment Administrative, organizational and managerial studies.

PROJECT DESIGN After project formulation is defined, feasibility studies are conducted and financial resources are tentatively committed. The projects are designed in sufficient detail to permit appraisal by financial, economic and social criteria. The following questions are again analyzed for this stage. 1. Who took primary responsibility for designing the project? 2. What were the major variable factors that influenced the course of the project design? 3. Were potential, social and cultural impacts of the project taken into consideration in the preparation of the design? 4. How well did the project design reflect the initial objectives and targets of the project idea? 5. How many and what kind of design alternatives were considered and analyzed? 6. How were alternatives evaluated and chosen. PROJECT APPRAISAL, SELECTION, NEGOTIATIONS AND APPROVAL. Preliminary analysis and preparation should provide sufficient information to allow selection or projects deemed most feasible for funding. Administrators should be capable of preparing loan documents, obtaining necessary Department approval, negotiating agreements with International Assistance Agencies and bargaining on proposed loan covenants. Critical questions in negotiations include: 1. What appraisals and selection criteria were used? Who was the selection authority? 2. From the source was the project to be financed and funded? 3. What main factors that influenced decisions at each stage of the review? 4. How long did the appraisal, selection, negotiation and approval process take? What were the major causes of delay? PROJECT ACTIVATION AND ORGANIZATION Activation of project resources involves identifying solutions to problems, needs and demand and formalizing commitment of professionals, techniques, resource suppliers and policy makers of the project. Decisions must now be made on the type of organization to be given responsibility for the project execution. Personnel recruitment, selections are established to activate the project. Under this stage, some important questions to be resolved are: 1. What criteria were used in choosing a project implementation unit or executing agency?

2. What variables influenced the choice of organizational structure? 3. How was the project organized internally with respect to: Work and task division Authority, responsibility and supervision Relationship between technical and administrative divisions. Monitoring and reporting Resource procurement and allocation 4. What were the sources of project inputs such as: Financial resources Materials, supplies, equipment and facilities Manpower Political support Technology PROJECT IMPLEMENTATION AND OPERATION This is the actual construction phase of the project where actual solutions to problems are met. Managerial systems and procedures are practiced to achieve the designed projects goals. Again, the following questions shall be considered and evaluated: 1. How work activities and project implementation were scheduled? 2. What techniques were used in the project operations and why where they selected? 3. What arrangements were made for coordination of project activities with supporters, suppliers and clients? 4. Were formal systems or procedures created to: Procure, inspect and inventory raw materials and other resources inputs. Draw down aid funds and budget allocations. Coordinate the work of contractors Re allocate resources to behind-schedule activities PROJECT SUPERVISION, MONITORING AND CONTROL. Project Supervisors must have the ability to coordinate and control functions, assign project tasks and activities to organizational sub-units and assure that proper work procedures are established and implemented. Progress of work is measured by control activities and the livelihood that inputs will adhere to plans and specifications. Relevant questions to be answered are as follows: 1. What methods were used to report progress of work and problems to higher authorities? 2. What type of information was reported and how frequently were reports are made? 3. How were remedial actions initiated and performed when monitoring and control procedures indicated problems? Monthly dialogue with the contractors is necessary.

PROJECT COMPLETION OR TERMINATION Completion involves scaling down the project activities. The completion of a project is a gradual process of diffusing results and returning excess resources to various supporting constituents. Questions are: 1. Was the project completed on schedule within the budget ad performance criteria? 2. If not, what were the major factors that cause the delay or cost overrun? 3. Were project completion reports prepared and reviewed? OUTPUT DIFFUSION AND TRANSITION TO NORMAL ADMINISTRATION This involves transferring outputs to beneficiaries and diffusing project results. The questions to be answered are the following: 1. Was a plan prepared for transition of a successful project to full scale operation? 2. Were project personnel trained for re-assignment on new duties at the projects completion? 3. What kind of arrangements were made to transfer unutilized or excess resources such as human, physical and technical from the project at completion to other projects or organization? PROJECT EVALUATION Project Evaluation includes both financial auditing to ensure that assistance funds were used for the purpose of the loan and post assessment of project results. This also includes examination of the effectiveness of the project in attaining its intended goals. Questions to be asked are as follows: 1. Who evaluated the project after completion? 2. What were the findings of the evaluation committee? FOLLOW-UP ANALYSIS AND ACTION Project administrators or Department officials involved in the project analysis to follow up assistance from the International AID Agencies. The following questions are: 1. Were arrangements made for follow-up investment or multi phased funding? 2. What arrangements were made for credit or loan repayment?

PROCESS OF PROJECT DEVELOPMENT

The different steps of project development cycles are: PRE-INVESTMENT PHASE a. Project identification b. Project formulation or preparation (feasibility study) c. Project appraisal and financing INVESTMENT PHASE a. Project implementation b. Detailed project engineering c. Project construction or installation OPERATIONAL PHASE a. Project operation b. Project evaluation

BASIC ASPECTS OF PROJECT STUDY AS TO MARKET, TECHNICAL, FINANCIAL & ECONOMIC

PROJECT FEASIBILITY STUDY Project feasibility study is the stage in the project cycle which determines a project can and should be undertaken. Feasibility study is a basic requirements in any road project identification as component of development program in order to determine the engineering viability as well as economic feasibility of the project A good feasibility study should cover detailed plans for establishing and operating the project. Feasibility study should include the requirements of the proposed project with respect to: 1. The quantity 2. Quality 3. Specifications of: a. Materials and supplies b. Labor c. Fuel and power d. Water and waste disposal e. Transportation and other inputs needed. 4. Specific Estimate of the total project cost. 5. Detailed estimate of production and overhead coasts for the proposed plant based on the unit cost of each item needed.

BASIC ASPECTS OF FEASIBILITY STUDY Basically, project feasibility studies involve the following considerations which determine the viability of road projects. 1. 2. 3. 4. 5. 6. Market study Technical aspect Financial aspect Financial considerations Economic returns Operational Feasibility

Other factors which also considered giving valuable information about the studies are: 1. Management aspect 2. Social effect environmental considerations 3. Choice of the most feasible alternatives. Feasibility studies are conducted by the combined efforts of two inter-related groups namely: 1. The Engineering or technical group and 2. The Economists, comprising the economic group. The Technical group is assigned the task of working on all details pertaining to the technical and operation aspects. Other engineering factors which may be considered in determining the engineering viability of the proposed project is also assigned to this group. The Economic group is in charged of the market study, the financial, economic and other feasibility of the proposed project.

MARKET STUDY This requires assessment of the past and the present supply and demand situations including their behaviours. Information as to local and regional market trends during the past five years each major product are gathered and correlated to: a. Domestic production, imports and exports, net local consumption and anticipated development of the local market. b. Present per capita consumption in the country in comparison with other countries c. Local laws and regulations affecting the marketing proposed products, including import and export duties, tariff, quotas, restrictions and subsidies.

d. If proposed production is intended for export, show for each product the number of units expected for export; proposed market costs; and cost of transport and import duties. OBJECTIVE OF MARKET STUDY The main objective of a market study is to determine the extent of the goods and services demand. If there is a gap or discrepancy between demand and supply, then there is a need for a market study to gather facts about the following: A. Demand Analysis This is the estimation of the total level of needs which are determined by the following. 1. Identify the demand determinants a. Population-determine the number of people living in the influenced area. b. Prices- determine the actual prices of goods, products or services in the locality. c. Income- the means of livelihood, determining the per capita income of the people living in the area. d. Change in the taste of people- Determine the particular products or goods wanted in a particular time. 2. Estimate of the past and present demand a. Primary data- this done by making the actual survey. b. Secondary data- Based on the actual existing records. c. Interview- interview people living in the area as to the demand of a particular product or goods in the area. d. By econometrics methods and e. By International comparison data 3. Project Demand a. By trend projection b. By the use of coefficients c. By econometrics method B. Supply Determinants Supply determinants are determined by the following factors: 1. Sources- determine available possible sources of goods 2. Products- determine available products being produced in the locality. 3. Economic Policy- determines prevailing prices of the products or goods in the locality.

TECHNICAL ASPECT This aspect answers the questions of whether and how of the project study. Whether the project is technically feasible and how the project will be implemented. The three things to consider in the technical aspect of the feasibility studies are: 1. Alternative ways of carrying out the project influenced by: a. Size and scale of the project determined by: 1. Volume of demand 2. Production process 3. Physical resource base (availability of funding) 4. Location and transport cost. b. Location- Site where the proposed project will be constructed, determined by: 1. Accessibility of transportation cost. The farther the location the higher the cost. 2. Geographical distribution. See if located on low, hilly rolling or mountainous area. 3. Technological or engineering specifications. Adhering as to the conditions of the locality. 4. Layout and design 5. How was the project chosen? What major factors were considered in the location decision? c. Production process is also determined by: 1. Availability of raw materials 2. Level of technology (whether sophisticated or simple.) 3. Cost input to production (cost of raw materials) 4. Size of the project d. Timing and Scheduling- This refers to the implementation and operation of the project determined by: 1. Seasonal variations- Dry and rainy seasons greatly affects timing and scheduling. 2. Funding constraints- Lack of funds is the usual problem which causes delay in any project. 3. Technical factors- this refers to the availability of qualified technical men to handle the project. 2. Corresponding Physical Resource Requirements- This aspect is determined by the basic inputs necessary in the smooth implementation of the undertakings such as: a) Capital- capital always plays a major role in the making of feasibility study, whether proposed project will be financed by the government or through foreign loan scheme.

b) Manpower- determines whether the required or needed labor force is available. c) Utilities- Whether the primary or basic needs, such as water and electricity are available. 3. Plan for Construction, Installation and Operation. Whether there are available technical men who will prepare construction plans, installation of field office buildings, motor pool, bodges, etc., and carry out actual implementation of the project. FINANCIAL ASPECT Financial aspect deals with the commercial analysis accruing to the project such as the estimated profit of the project. This study involves the projection of expected expenditures determined by the following factors: a. Project cash flow- Expected annual movement of cash that goes into and out of the project. b. Profit and Loss Statement- Statement of accounts showing the profit or losses of the project. c. Balance Sheet- summarized statement of the financial status of the project. Financial aspect also includes considerations for different kinds of cost estimate which are involved in any road construction project such as: 1. Estimated Capital Cost- This estimate includes the cost of land (ROW acquisition), engineering and construction costs, beoken down into US dollars and local currency. The amount to be financed by the borrower country and the amount to be financed by the foreign lending institution must be specified. 2. Working Capital Requirements- The amount required to start-up the plant, its mobilization and layout. The amount to purchase raw materials spare parts and others , determines the anticipated occurrence of seasonal peaks in working capital requirements and method contemplated to meet peal financial requirements 3. Production Cost- This is the estimated direct cost of the actual construction of the project, broken down into local and dollar cost.

ECONOMIC RETURN The objective of this study is ascertained in the desirability of the project in terms of its net contribution to the economic and social welfare of the people. The following are the steps in the Economic Feasibility Evaluation. 1. Identification of a set of development goals with which project feasibility studies are assessed. 2. Identify the cost and benefits as to: a. Investment expenditures b. Technological expenditures 3. Comparison of coast- To measure the economic viability of road projects proposed for construction or improvement. The economic indicators used are: a. Net Present value NP b. Benefit Cost Ratio BCR and c. Internal Rate of Return IRR

NET PRESENT VALUE

The Net Present Value- The NPV of any road project represents the difference between the present worth of the stream of benefits the project is e expected to yield and the present worth of the associated road construction and maintenance cost to incurred. A positive NPV indicates a project is economically feasible. The formula for computing NPV: NPV=-K+b1-c1+b2-c2+...bn-cn 1+r Where: K = Initail investment or Capital b1 = Cost in the first year b2 = Benefit in two year c2 = Cost for year two bn = Benefit in the nth year cn = Cost for the nth year (1+R) = Rate of interest discounted at the present time. CRITERIA: If NPV>0; Go or if NPV >Cost; Go NPV<0; Go and if NB>Cost; Go (1+r)2 (1+r)n

BENEFIT COST RATIO

The Benefit Cost Ratio- The BCR is the quotient of the benefits expected from the construction and or improvement of a project in relation to the cost incurred (all benefits and cost incurred should be discounted at the opportunity and cost of capital prevailing in the country). To be feasible, a project must show a Benefit Cost exceeding 1. Formula for computing Benefit Cost Ratio BC = Annual road user benefits Annual Capital costs + Annual Maintenance Expenses The benefits that can be derived from the improvement of roads are usually in the form of: 1. Savings in vehicle operating costs- Derived by comparing the traffic costs on existing road and the improved road,. 2. Increase in agricultural production- Due to greater accessibility and economy in the processing and utilizing inputs such as fertilizers, modern techniques, etc., as well as marketing the produce. 3. Less road-users costs- With the improves road, expenses by the ordinary commuters will be lessen 4. Time savings- Travel time will be shortened by the improvement of existing old roads. 5. Less maintenance- Maintenance cost will be reduced on improved concrete roads. BASIC VEHICLE OPERATING COSTS Basic traffic costs are defined as the cost the would be incurred by vehicles using roads under ideal conditions, that is with goo surfacing, no gradients or curves, insignificant roadside friction and light traffic volume. The traffic cost maybe divided into the following components: 1. Running costs- Is defined as vehicle operating cost (VOC) which directly with the number of kilometres operated. 2. Fixed cost- is defined as vehicle operating costs which vary with the time required to make the journey for which the cost is being calculated. 3. Time costs- Is he value of passengers time (including the time value for drivers of private cars).

BASIC RUNNING COSTS The running cost consists of fuel, lubrication, tire, maintenance and repair costs and also part of capital costs. 1. Fuel costs- the latest price are gathered then used in computing the fuel costs consumed per vehicle kilometre. 2. Oil costs- The oil cost per vehicle kilometre is calculated by obtaining the average price for lubricating oil. 3. Tire costs- May be calculated n the basis of tire sizes amd prices in the vehicle specifications. The estimated life span of each tire ranges from 50,000 km for a small car to 100,000 km for heavy trucks. 4. Capital cost- The vehicle price minus the tire cost are used in calculating the capital costs. The total life span of a vehicle in kilometres will give the capital costs per kilometre per vehicle type. 5. Maintenance and Repair costs- All maintenance costs are included in running costs. The labor cost per man-hour including basic tools and overhead is assumed to be P25.00 (1996). The cost of parts replacement is related to the original cost of vehicle, 2 percent of the capital cost for cars, 5 percent for trucks and vans and 10 percent for buses and jeepneys. These are charged for spare parts each year. TOTAL BASIC RUNNING COSTS The total basic running cost for each type of vehicle is calculated per kilometre basis. The resultant basic running cost for each vehicle type is tabulated as presented in Table 2-1. TABLE 2-1 BASIC RUNNING COST PER VEHICLE KILOMETER (1995 SURVEY IN PESO) COST ITEM RUNNING COST PER VEHICLE KILOMETER without taxes Fuel Lubricants Tires Maintenance Capital TOTAL Cars .90 .10 .025 .38 .55 P 1.955 Jeepneys 1.00 .10 .03 .24 .22 P 1.59 Buses 1.40 .20 .13 .75 .70 P 3.18 Trucks 1.75 .20 .14 .95 .80 P 3.84

BASIC FIXED COST costs. Fixed cost consists of part of the capital cost, crew costs, overhead and other

The time required for a certain trip includes that spent for loading, unloading, waiting and running. Savings in running time are related to this total time to determine the vehicle productivity improvement. The annual operational vehicle hours assumed are 3,000 for public service vehicles, 2,500 for Vans and Trucks and 2,250 for Cars. A. Capital Cost. There are two types of benefits accruing from a shortened journey time. 1. The vehicle can make more trips per period and total investment at any one time in the vehicle fleet will be reduced. 2. The increased productivity of the vehicle reduces the time deterioration per kilometre and extends the operational life in kilometre. B. Crew Cost. Crew cost is estimated as follows: Truck and bus drivers P 35.00/ hr. Conductors and Jeepney drivers 30.00/ hr. Van and Tricycle drivers 25.00/ hr. Truck guards and loaders 20.00/ hr. C. Other Costs. the cost of overhead and motor vehicle fees per trip will be reduced if vehicle productivity rises. For commercial vehicles, overhead costs are assumed to be P 3,000.00 per vehicle year. ( No overhead cost have been assumed to be saved for cars. ) The motor vehicle fees consist of regulation and science taxes. TOTAL BASIC FIXED COSTS The total basic fixed costs per vehicle type is estimated on a per hour basis. The resultant basic fixed cost is shown on Table 2-2below: TABLE 2-2 TOTAL BASIC FIXED COSTS 1995 SURVEY VEHICLE TYPE Cars Jeepneys Buses Vans and Trucks PESOS PER VEHICLE EXCLUDING TAXES P 8.60 14.65 34.10 30.20 HOUR

BASIC TIME COSTS Time cost is based on the following assumptions derived from past studies: 1) Leisure time...........................................No value 2) Working time ( bus and jeepney drivers and passengers )........................P 25.00/ hr. 3) Working time ( car drivers and Passengers )...........................................P 30.00/ hr. 4) Travel time.............................................One half the value of working time TABLE 2-3 BASIC TIME COST PER VEHICLE HOUR Vehicle type Pesos per Vehicle Hour Cars Jeepneys Buses P 24.00 8.00 48.20

TRAFFIC COST CALCULATIONS A. Running Costs The annual running costs for each type of vehickle are calculated by using the formula. ARC = ( AADT ) 365 ( L + d1 ) Basic running cost/km. Where: ARC = Annual running cost AADT = Annual average daily traffic L + d1 = Theoretical length of road dl = Deviation from ideal condition of level paved road. B. Fixed Cost and Time Cost Fixed and time costs are calculated by the following formula: Fixed Cost = Annual traffic x travel time x basic fixed cost per vehicle. Time Cost = Annual traffic x travel time x basic time cost per vehicle. Travel time is calculated based on the average operating speed of each vehicle type on the different pavement\ent type and conditions.

TABLE 2-4 OPERATING SPEED IN KILOMETERS PER HOUR ROAD Type Paved VEHICLE Type Light vehicle Heavy vehicle Light vehicle Heavy vehicle Light vehicle Heavy vehicle ROAD CONDITIONS Good 60 50 40 30 35 30 Fair 45 40 30 25 25 20 Bad 25 20 20 15 15 15 Very Bad 20 20 15 15 10 10

Gravel

Dirt

Benefits accruing to the proposed projects are quantified and the different costs are evaluated and the quotient of the benefits over the estimated costs to be incurred is the benefit cost ratio, and the criteria for a viable Benefit Cost (BC) ratio are: If BC is > Go; If BC is < 1, No Go or reject. If BC is = 1, Go but delay first until such time when benefits are already greater than the cost by more than one. C. Internal Rate of Return ( IRR ) The internal rate of return (IRR) establishes the discount rate at which the present worth of expected benefits equals the present worth of estimated cost. To be feasible, the computed IRR must be greater than the opportunity cost of capital prevailing in the country. The formula for computing IRR is: ( ) [( ) Criteria for IRR: For instance, the rate of interest of the foreign lending institution is say 18%, if computed IRR is > 18, Go; If IRR is < than 18, No Go; Between projects, the higher the IRR, the better is the offer. 4. The fourth step in the economic feasibility study is selecting the most beneficial alternative, that is, if identifying between two or more alternatives. ( ) ( ) ]

5. Qualitative factors Discuss or describe other factors which will characterize the study in terms of economic situation in relation the following questions: a. Does the project promote national security? b. Does the project promote employment? c. Does the project promote regional growth of development? d. Does the project promote re-distribution of goods or produce? OPERATIONAL FEASIBILITY The proposed project must be acceptable to the political leaders of the locality and more particularly to the people whom the project is intended for. It must also have the support of the national leadership. Organization and management system must be well organized to effectively carry out the planned undertaking. MANAGEMENT ASPECT Management aspect primarily deals with planning, organizing, staffing, directing and control of the project. These factors are already discussed in chapter one. However as guide, the feasibility report should discuss the plan for implementing effectively the project, more particularly the construction organization which will be employed in the management of the work. The staffing or hiring of personnel to run the project, the selection of the project manager and the method of control to be exercised in handling the subordinates should be specified clear to avoid confusion in the implementation of the work. SOCIAL ASPECT Present and discuss how or what will be the effect of the completed project in the society by answering the following questions: Will it bring social upliftment in the area? Will it solve the unemployment problem? Will modern technology will be introduced so as to improve the educational facilities, health and others, or in a general; Will the completed facility bring social development to the people whom the project is intended for? ENVIRONMENTAL CONSIDERATIONS Under the environmental aspect, questions as to what would be the effect of the project with respect to the air, land and water resources should be answered satisfactorily such as: Will there be prospect of land pollution? Will the present water system be improved? With the improved road, there is a greater possibility that those idle land surrounding the vicinity will be developed and transformed into residential, commercial, parks, garden or even recreational areas. Corollary with this development, suburban areas may be developing as a result of the completed road.

CHOICE OF THE MOST FEASIBLE ALTERNATIVE After gathering all data and information of the project studies, careful assessment is made on the several projects that are recommended for study, and the most feasible projects are selected for implementation. TRAFFIC CONSIDERATIONS In road feasibility studies, traffic is also an important factors to be considered. The volume and composition of traffic in the area are among the controlling factors in determining the type of improvement and the benefits to be realized from it. The questions that are invariably asked about the requirements of the expected traffic on a proposed road are: Is the proposed travel way widely enough to cope up with the expected vehicles that will be using the road? What strength should the pavement structures have in order to carry the load of the traffic? Comparing the traffic costs on the old road with the proposed improvement, will the expected traffic volume be sufficient enough to justify the cost of the proposed improvement? These questions should be weighed carefully so that a maximum benefits could be derived out of the proposed project. TRAFFIC COUNT Traffic count is another important undertaking in a feasibility study. An 8 hour traffic count per day for one week or for any number of weeks or months as may be desired is conducted on the project for each vehicle type, i.e., cars, jeepneys, buses and trucks in order to determine the traffic pattern for passengers and commodities in the area. The traffic count stations are located at the strategic places along the proposed road, such as on road intersections, at the junctions connecting the proposed road to a major secondary or national road, or on such other places along the road where there is an unusual increase or decrease in traffic. The traffic on secondary roads may be seasonal; hence the results of the traffic count may not represent the correct AADT. It is necessary therefore to make adjustments on the results of the traffic counts. During the survey, the average passenger capacity of each type passenger vehicle should be noted. The total passenger travelling along the road per day can be estimated. The generated passenger trips per thousand populations per day can be calculated by relating it to the total population within the influence area. With several road sections, there will be great variations of the calculated generated passenger trips per thousand populations on all projects were adopted to take care of the seasonal variations on lower trip generation, the results of the actual count can be used. For commodity traffic, the annual agricultural production in tons and a portion of the population within each of the road influence area are used to establish the daily truck trips per day using the formula:

Truck Trips = 0.002 Population + Annual Agricultural production per 300 This empirical formula is based on the IBRD/UNDP Road Feasibility Study conducted somewhere in the year 1998. The formula means that there are two truck trips generated per 1000 population and one truck trip per 300 tons of annual agricultural production. ROAD INFLUENCE AREA There are two types of road influence area, namely: Immediate or direct influence area Intermediate or indirect influence area. In the feasibility studies, it is always the immediate or direct influence area which is considered because the main objective of the study is to facilitate the movement of the passengers and goods of the proposed project within the influence area of 5 kilometres on both sides of the proposed road. Road influence area can be defined to include the points where agricultural and economic activities are directly affected by the proposed road. This means that produce within the influence area will be transported via the road. This can be delineated as the area served for which the road facility provides the shortest route and entails the least transport costs. In the selection of road projects for construction, the following criteria based on the influence area are considered: 1. The road influence area should be large enough to justify the improvement and construction of the project. 2. The road should pass through existing or proposed irrigation projects. 3. The road should traverse potential agricultural areas. 4. It should lead to Samahang Nayon Masagana 99 areas and Agricultural Cooperatives. 5. It must constitute the shortest route to market areas. 6. It should serve at least ten farm units with less than three hectares within the influence area per kilometre length of the road. The selection of the proposed project should be designed to effectively service the whole influence area by utilizing the existing trails and traversing populated centers to the extent practicable. With the completed facility, there will be a subsequent reduction in transport costs which will greatly change or improve the economic condition of the people living on the influence area of the project.

FEASIBILITY OUTLINE FOR A ROAD PROJECT STUDY Present a general introduction or overview of the proposed project before going directly to the basic factors which determines the viability of the road projects, discussing among others the following: 1. The position of the project in the overall program of development by: a. Description of the present highway system. b. Description of the present transport system other than the highway such as airport, ports, and piers if there is any. c. The extent to which inadequacies of highway transport are retarding economic growth. d. Relation of the project to the regional development plan. 2. Relation to the other transport system determined by: a. Present distribution of traffic among the various types of transport in the project area. b. Relative availability of vehicles, operating personnel, fuel servicing etc. 3. Vehicle fleet characteristics a. Describe the vehicle fleet, its size and composition over the last ten years. b. Regulation on vehicle weights and dimensions and extent to which they relate to fleet characteristics. TRAFFIC 1. Transport generating sources presented by: a. Description of the influenced area as to its size, physical, economic geography, its land use such as agriculture, mining, manufacturing and also about tourism, centers of population, topography, vegetative cover and its climate. b. Economic activities and growth trends or population with emphasis on main population centers. c. Nature, size and growth trends of agricultural, mining and manufacturing products which are imported into, exported from and passing through from the area. d. Estimated growth for transport demand over the project life. 2. Traffic Patterns a. Present traffic volumes, their composition and growth over the last ten years. b. Describe the origin-destination patterns of passengers, goods and vehicles. c. Fare cost of traffic volumes.

3. Traffic Capacities a. Describe the capacity of present highway as to its number of vehicles, tonnage and maximum loads and the level of service. b. Describe the capacity and level of service required to accommodate present and future loads and volumes. ENGINEERING ASPECT 1. The present road condition is determined by: a. Description of route as to its terminal points, length, major population centers traversed, land use, terrain etc. b. Major geometric features such as alignment, width of the road roght of way, width of pavement and shoulders. c. Conditions of pavement, shoulders, base and sub base. d. Drainage conditions. 2. Alternative technical solutions a. Basic geometric design standards for highways of various categories in flat, rolling and mountainous terrain for different design volumes of traffic. b. Description of the major design features for the following alternatives: Alternative routes Alternative design standards Alternative timing during construction stage. c. For each alternative, the following informations has to be presented: Route Geometric features including the number of lanes, width of lanes, shoulder and right of way, maximum grade, minimum and maximum side slopes for cuts and fills. Traffic capacities and design speed Maximum height of embankments and Other features. 3. Preliminary surveys and plans to include the following: a. Preliminary alignment map of the proposed location based on ground surveys, aerial surveys, topographic map and other resources. b. Preliminary plan and profile drawings with established grades and general drainage schemes and typical cross sections sufficiently enough to permit reasonable firm estimates of earthwork quantities. c. Rainfall and run-off data calculations of stream flow sufficiently enough to permit rational design for drainage structure. d. Sketches, diagrams or photographs of typical existing drainage works, bridges, retaining walls, tunnels and other significant structures.

4.

5.

6.

7.

e. Preliminary plans for modification of existing structures and for construction of typical new structures, culverts, drainage ditches, etc., in sufficient detail to permit reasonably close estimate of work quantities. f. Results of soil and sub surface investigations to determine the quality of foundations for fills and major structures and for location of quarries and borrow pits of construction materials. Construction Standards Outline specifications, defining the proposed standards of quality of construction affecting the cost of the construction. Availability of local resources a. Skilled and unskilled labor b. Technical and supervisory personnel c. Major construction materials such as cement, aggregates and water, reinforcing steel, base course materials, culvert pipes etc. d. Housing, food, fuel and lubricants, repair shops etc. e. Suitable sites for construction camps or yards. f. Availability of local sub-contractors g. Construction equipment. Special Construction problems foresee. a. Climate conditions, particularly the time length of wet and dry seasons which affect construction schedules, equipment use and labor force. b. Probable detours of traffic during construction c. Evaluation of possible major causes of delay such as earthquakes, slides, floods,political disturbances, etc. d. Provide specialized tools, test equipments, service vehicles with associated spare parts for continuous satisfactory operations. Plan for project execution and project scheduling a. General sequence of construction operations including identification of major element that control time and costs. b. General plans for grading operations as related to equipment requirements, haul distances, requirements for haul roads and access roads to quarries of borrow pits, etc. c. Construction methods, particularly the use of manual labor versus equipment. d. Propose methods for engineering and construction supervision. e. Phased engineering and construction schedule, possibly in the form of PERT / CPM network.

FINANCIAL 1. Construction capital cost, determined by cash flow: a. Estimates of construction costs broken down into major work pay items such as land acquisition if there is any, engineering base courses, pavements, etc., and showing the unit prices of each item. b. Breakdown of costs into local currency and foreign exchange into economic and financial costs. c. Schedule of investments. 2. Maintenance and operation costs a. Basic road maintenance and operation costs for major work items and for labor, supervision, equipment operation, operating supplies and repair parts and administration. b. Breakdown of costs into local currency and foreign exchange components and into economic and financial costs. c. Total annual maintenance and operation costs. 3. Revenues ( for directly income producing projects ) a. Present and proposed schedules of tolls and other direct fees and the basis thereof. b. Estimated annual revenues based on traffic forecasts over project life. 4. Financial profitability (for directly income producing projects). a. This is the financial feasibility evaluations of the project from the operating agencys viewpoint using accepted indicators such as BC ratio, net present value, internal rate of return, etc. MANAGEMENT 1. Construction organization a. Prepare organizational plan for implementing the project indicating the following: Work to be done by force account Work to be done by contract b. Determine the adequacy of construction organizations especially the personnel, equipment and finances to be used in the project. 2. Maintenance and operational organization a. Description and acceptability of present and proposed maintenance and operation organization. b. Ability to provide personnel and finances for the necessary level of maintenance and operation for the highway facility when completed. c. Availability of equipment and trained maintenance personnel.

ECONOMIC 1. Savings in transport costs a. Determine the basic transportation costs b. Total annual savings in transport cost for normal, diverted and generated traffic over the project life as a result of the project. 2. Other project benefits a. Savings due to increased axle load b. Reduction in accidents c. Other tangible and intangible benefits, quantified to the extent possible. 3. Economic feasibility a. List down summary of economic benefits and costs of the project b. Prepare economic feasibility calculations using accepted indicators such as net present value, benefit cost ratio, internal rate of return, etc. c. Conclusions as to economic feasibility of the project SOCIAL ASPECT 1. Provide a more balanced distribution of income and wealth. 2. Acceptability of the project to the people for whom it is intended. 3. Promote social development, in terms of improved health and nutrition, educational facilities, public safety etc. 4. Generates significant employment.

ENVIRONMENTAL Discuss possible effects of the projection air, land and water resources and the prospect of land pollution

Sample Problem: The initial investment cost for a proposed project with a four year life is P 10,000.00. the expected benefits operating and maintenance cost streams are indicated in the Table 3-1. At 15 percent discount rate, compute the NPV, BC ratio and the IRR. Table 3-1 Period Initial Investment Annual benefit Annual operating & maint. Costs Annual Net Flow Solution: 1. Solve for the NPV: The opportunity cost of capital is 15% o c r ( c r) n cn ( r)n t P 10,000 t1 P 3,000 1,000 2,000 t2 4,500 1,500 3,000 t3 6,500 2,200 4,300 t4 9,000 3,000 6,000

10,000

= -10,000 + 2,000(0.87) + 3,000(0.76) + 4,300(0.66) + 6,000(0.57) NPV = -10,000 + 10,278 = 278 Criteria for NPV: if NPV is > 0, Go; If NPV is < 0, No Go. Therefore: the project passes the criteria for NPV.

2. Solve for the BC ratio: BC nnua road user enefits nnua capita costs nnua aint expenses

B = 3,000(0.87) + 4,500(0.76) + 6,500(0.66) + 3,000(0.57) = 2,610 + 3,420 + 4,290 + 5,130 = 15,450 C = 10,000 + 1,000(0.87) + 1500(0.76) + 2,200(0.66) + 3,000(0.57) = 10,000 + 870 + 1,140 + 1, 452 + 1, 710 = 15,712 BC = = 1.018 say 1.02

Criteria for BC ratio: 3. To solve for the IRR

If BC is > 1, Go; If BC is < 1, No Go.

( ) ( ) so ute va ue of

IRR = Discount rate of (+) NPV +

X Interval between Discount rate Note: To get a negative value for NPV, assume a bigger Growth Rate than the opportunity cost or capital. Assume a Growth rate of 20 % NPV = -10,000 + 2,000(0.83) + 3,000(0.69) + 4,300(0.58) + 6,000(0.48) = -10,000 + 1,660 + 2,070 + 2,494 + 2880 = (-) 896
( )

= 15.95

Criteria for IRR: If the computed IRR is greater than the opportunity cost of capital, Go or between two projects, the higher the IRR, is the better. Therefore, accept the construction of the proposed project.

ENGINEERING INVESTIGATION AND SURVEY PROCEDURES

PRELIMINARY PLANNING AND DESIGN
Preliminary planning and design for a selected project is undertaken after the Feasibility Study. Preliminary engineering for these studies is carried out to a degree of accuracy that will permit estimates of principal quantities of the construction with an accuracy of + or 20% of final quantities. The principal quantity of construction includes: 1. 2. 3. 4. 5. 6. Common excavation Rock excavation Base and sub-base materials Surface materials Number and size of principal drainage structures Major bridges and other structures

Preliminary survey also includes the undertaking of all necessary field investigations including: 1. 2. 3. 4. Topographic survey Sub-surface explorations Determine principal quantities of excavations and construction materials Prepare preliminary engineering design and locate suitable sources of materials

PROCESS OF ENGINEERING INVESTIGATIONS

Before conducting any survey, it is first necessary to study the condition of the road to be surveyed and decide what kind of standards would be incorporated in the detailed design such as: 1. 2. 3. 4. Class of road Level of improvement, whether gravel, asphalt or concrete road The road speed to be adopted Super elevations, etc.

Preliminary survey should comprise the staking-out at the ground of the center line of the proposed road alignment. After establishing the general alignment, a detailed topographic survey is immediately prepared. The road center line is marked and set out using wooden pegs at 50 meters interval which may be increased to 100 meters for a flat terrain. Cross sections shall be taken at intervals not exceeding 50 meters distance or at a closer intervals when necessary to enable calculation of earthwork volume to an accuracy of (+) or (-) 10%. The widths of the cross section also vary according to the engineering requirements.

SURVEY PROCEDURES
1. Reconnaissance- A reconnaissance survey should be carried out on the existing road or tract in order to plan the most possible horizontal and vertical alignment of the proposed rock. Road cut, water logged ground, expensive buildings and crops should be avoided as far as possible. During the reconnaissance, the traverse stations should be located in such a way that they will with few exceptions become the horizontal intersection points IP in the final design. 2. Monumenting- The traverse stations should be monumented as soon as possible after they have been located. These monuments should be 10mm steel pins approximately 700mm in length normally rounded by concrete of not less than 0.01 cubic meters. Each traverse stations should be referenced by at least three reference marks which may be established on adjacent fixed objects such as trees, rocks, buildings or any object not likely to be removed before or during the construction. 3. Traversing- The traverse party will be responsible for the following undertakings: a. The measurement of angles at each traverse stations b. Measuring the distances of each traverse by either steel tape or SDM. c. The fixing at the reference marks for each traverse station d. To indicate the clear description of the reference marks in the field book. 4. Horizontal Alignment- The traverse should be plotted at a scale of 1:1000 on a rolled graph paper. The horizontal geometry is then designed on this plan and produced through stationing using this information. The center line can now be established on the ground including the lay-out of the curves. The necessary stationing which is normally at every 25 meters should be marked for the convenience of the cross section and parcellary survey parties. 5. Bench Mark Levelling- The leveling party should established accurate eve s on ench arks (BMs) a ong the route These BMs ay e the traverse stations. All bench mark is to be levelled in closed circuits, independent of the longitudinal or cross sectional levelling. Bench marks are established along the route at intervals of about one half kilometre located near the right way and at points readily accessible for use and reasonably close to the center line.

6. Longitudinal and Cross Sectional Levelling- The cross sectioning party follows the levelling party and takes cross sections at the required intervals along the proposal center line established by the center line marking party. The longitudinal profile is also levelled at this time. Cross sections at right angles to the proposed center line are normally taken at intervals of 25 meters except that when the terrain is flat. They may be taken at intervals of 50 meters. Cross sections usually extend 15 meters on each side of the center line or such farther distance as the design requires. 7. Plotting of Profiles and Cross Sections- The existing longitudinal profile shall be plotted to a scale of 1:1000 horizontal and 1:1000 vertical. The existing cross sections shall be plotted to a scale of 1:50 except in undulating or mountainous terrain where they may be plotted to a scale of 1:100. 8. Parcellary Survey- This survey shall include details of all fences, cashcrops, large trees, buildings, drainage features, marshes and all other information required for the detailed design and right way of plans. Detailed surveys are carried out for all bridges sites, to a sufficient length of more or less 200 meters upstream and downstream as required for the hydraulic design of the structure. 9. Soils and Materials Investigation- All existing relevant data shall be reviewed followed by a general study of the soils and materials along the route. A detailed soils investigation shall be made along the road alignment to identify the varying soil types. A disturbed sample is taken from the site at intervals of about250 meters and at such other places to determine the changes in soil type. At bridge sites and for other major structures, sub-surface conditions are investigated by trenching, hand auguring and or drilling by Calyx drill. Explorations for sources of construction materials are also carried out. Sites of suitable construction materials are surveyed and shown in the engineering plans. Different laboratory tests to determine the quality of soil samples includes the following: a. Soil classification test b. Liquid limit test c. Plastic limit test d. California Bearing Ratio test (CBR) e. Special method of soil stabilization 10. Drainage and Bridge Site Investigation- Hydrological studies will be carried out on all drainage structures with careful analysis of all available data, including rainfall, flood records and detailed field inspection reports.

STANDARDS / GUIDELINES AND SPECIFICATIONS OF HIGHWAY DESIGN

PROCESS OF FINAL SURVEY
Normally, the proposed road follows the existing route or track. The alignment is determined after the preliminary survey reconnaissance and additional refinement may be incorporated. The design should attempt to improve the existing alignment without necessarily increasing the cost of the project. Final survey is conducted on all topographic and geological studies. Soils and materials survey are needed to implement the design of the project. Topographic surveys should be performed to such accuracy that final design construction quantities are calculated to a near accuracy to permit construction tendering. Field sampling and laboratory testing is also necessary to supplement preliminary soils investigation already undertaken in the preliminary engineering works. Investigations and testing is completed for the final design of road way embankment and pavement sections. Sources of suitable borrow and construction materials are identified including the sufficiency of its deposit. Detailed foundations investigation including laboratory tests for all bridges and culverts sites are made before the final design of the foundation. On the basis of field survey and investigation report, final engineering design, contract plans with sufficient details necessary for tendering and construction are prepared to a final plan to which includes the following items: 1. 2. 3. 4. Horizontal and vertical alignment of the roadway. Cross sections, related earthworks and mass haul diagrams, Pavement, Detail of bridges and drainage structures, connecting with the existing roads plus other miscellaneous items of the construction.

The final report on the preliminary studies also includes all plans, profiles and typical cross sections plus the right of way at appropriate scales and a realistic program and time schedules for detailed design and construction.

DESIGN OF HORIZONTAL ALIGNMENT

The horizontal alignment is generally pre-determined after the preliminary survey. Additional refinement may be necessary and the design is undertaken through the following guidelines: 1. The horizontal alignment should be simple as possible. 2. Compound curves should be avoided whenever possible. 3. Long straights of new alignment should be avoided to alleviate driver fatigue. 4. Short length of straights between two curves following the same direction should be avoided because this results to a very poor visual appearance. 5. The plan should be plotted with scale of 1:1000 and with contour of one meter interval and should extend at least 20 meters, 40 meters and 50 meters for each side of the centerline in flat terrain, rolling and mountainous area respectively. 6. In designing horizontal alignment, the existing centerlines shall be maintained as much as possible. 7. The topography in the plan must be consistent with the one in the cross section and longitudinal profile. 8. For transition spirals, the length of the spiral is generally governed by the super elevation to be run-off at a gradient of between 0.5 and 1.0% along the edge of the pavement relative to the gradient of the center line. 9. For circular curves, the minimum radius for each class of road and terrain are as follows: a. Flat terrain 125 m to 400 m b. Rolling terrain 125 m to 400 m c. Mountainous terrain 50 m to 180 m 10.For super elevations, the maximum rate of super elevation is 8%.

DESIGN OF VERTICAL ALIGNMENT

The vertical alignment of road is determined by first considering the crosssections. These are used to establish the position of the finished road level giving minimum earthworks commensurate with a satisfactory drainage design for each section. The guidelines for designing the vertical alignment of a road as follows: 1. The scale of a longitudinal profile shall be 1:1000 for horizontal and the vertical. 2. For mountainous section, it is recommended for convenience a vertical scale of 1:2000 to prevent too many shifting of profiles. 3. In designing vertical alignment, the grade should consider the utilization of the existing surface base or the sub-base. 4. In flooded areas, the proposed height of the new pavement should be sufficiently high to about 50 centimeters above the maximum flood level. 5. The rolling of grades to avoid heavy earthwork is permissible where proper sight distance is to be maintained. 6. The secondary dips in the profile where vehicles may be hidden from view should be avoided. 7. The maximum grade on thru-cuts should be at least 0.50% to provide longitudinal drainage. 8. The lowest point of vertical curve should be located on embankment section and not in cut section to provide easy construction of drainage structures. 9. The minimum depth of bank fill materials between the finished grade and the top of pipe culverts should be 60 centimeters. 10.The maximum gradient for each class of road is: a. Flat terrain 7 to 8% b. Rolling terrain 7 to 5% c. Mountainous terrain 10 to 7% 11.Stopping sight distance. The road must be designed to permit forward visibility throughout its length at least equal to the minimum stopping sight distance. 70 to 80 meters for flat and rolling terrain and 50 to 90 meters for mountainous terrain. 12.Passing sight distance. Under normal conditions, for flat and rolling terrain, the passing sight distance should be provided. Whereas, in mountainous terrain, a reduced passing sight distance may be adopted.

DESIGN OF CROSS-SECTIONS
In designing cross section of a road, the following guidelines are presented: 1. Prepare a cross section to a scale 1:100 2. Interval distance of section a. 50 meters in flat terrain b. 20 meters in rolling and mountainous areas. 3. Layout the cross section drawings from bottom to top and from left to right. 4. The manner of templating the cross sections are: a. Show the sub-grade lines and side slopes b. Indicate the proposed finished grade elevation by broken lines in conformity with the required cross section slope. c. Indicate types and layers of materials, encountered within the limits of the templating in cut sections. 5. Thickness of Aggregate base. For concrete pavement, the thickness of the base shall be 15 centimeters of crushed stone or 20 cm in case of ordinary gravel. For bituminous asphalt pavement, provide 20cm thick crush stone or 25 cm ordinary gravel. 6. Thickness of Aggregate sub-base. The thickness of aggregate sub-base should be in accordance with the CBR of sub-grade soil as shown in the following table. Thickness of Sub-base for PCC Pavement CBR of Sub-grade Soil Less than 5 cm 5 to 10 More than 10 Thickness of Sub-base (cm) 20 cm 15 cm 0

Sub-base Thickness for Bituminous Pavement CBR of Sub-grade Less than 5 5 to 10 More than 10 Thickness of Sub-base (cm) 40 cm 30 cm 20 cm

In case of rock excavations, the base course shall be designed as a leveling course. The minimum thickness is 10 centimeters. In both types of pavement, the sub-base shall be eliminated. 7. Existing and proposed right way of limits should be clearly shown in the cross section. 8. Detailed description of existing structures should also be clearly shown in the cross section.

METHODS AND PROCEDURES IN ESTIMATES, FINANCING, SPECIFICATIONS & ADVERTISEMENT

ESTIMATE AND SPECIFICATIONS
ESTIMATE An estimate in engineering work may be defined as a process of calculating and evaluating the quantities, quality and costs of a project be it proposed or existing. Estimate is a rough tentative determination of the work to be done including its cost. The estimated amount is only probable cost of the materials and labor and the accuracy of the estimate depends upon who is estimating and how it was done. A good estimate however, are those prepared by one who has experienced and knowledgeable of the work basing his estimate on more detailed p an and specifications for How good is your esti ate if it is not ased on a detailed plan and specifications Estimate classified as into the following types: a. Project Estimate. Refers to the total cost needed to finance an undertaking based on an evaluation of all items involved on the Bid Schedule of the project. b. Detailed Estimate. Is a careful calculation of the quantity and costs of everything that is stipulated in the contract? Detailed estimate can be made in two ways: 1. The Unit-Quantity or Unit-Cost method. 2. The Gross-quantity or Total-Cost method. The Unit-Cost method. Under this method, the unit cost of an item of work is first determined, then the total cost is found by multiplying the unit cost by the total quantity or volume. For instance, if the quantity of road materials required as computed is 4,000 cubic meters and the unit price is P50.00 per cu.m., the total cost will be multiplying 4,000 by 50.00 which is P200,000.00. The Total-Cost method. Under this method, the quantity of each kind of materials plus the labor were added together to determine the total cost. For instance, the cost of all the materials, labor, rental of equipment, transport and handling, light, water, etc are computed separately and then added together to get the total cost. c. Approximate or Short-Cut Estimate. This is a rough estimate made to obtain an approximate cost in a short time conversation. One example of this short cut estimate which is not reliable is the per kilometer methods of estimating the cost of a constructing a roadway or the like structures.

d. Complete Estimate. Is one that includes the calculation of all costs relative to the project in addition to those included in the main contract. For instance, a complete estimate for a road concreting project would include the following items: land acquisitions, legal fees, main contract. Sub-contracts, financing, interests, insurances and taxes during construction. e. Engineering Estimate. Is an estimate made by the engineers employed or commissioned by a client for the purpose of financing the work for checking the bids submitted by the contractors. f. Contractors Estimate. Is a detailed estimate carefully prepared by a contractor for his bid amount to a project advertised for bidding either by the government, private organizations or corporations. g. Government Estimate. Is an estimate prepared by the government agency estimating committee for a particular project subject for public bidding. h. Progress Estimate. An estimate made by the owner or government engineers at periodic intervals (usually monthly) during the progress of the work for determining the amounts of partial payments to be made to the contractor. Normally, 10% of the amount due to the contractor every partial payment is retained by the owner to ensure the satisfactory completion of the project by the contractor. This is retention fund reserved to cover expenses for correcting defects and completion of the work if abandoned by the contractor. i. Final Estimate. Estimate by the owner or by government engineers after the completion of the work. The purpose of this estimate is to determine the amount of the final payment due the contractor and also to determine the exact quantities that have been used. THE ESTIMATOR Estimating is an art. An art which could not be learned easily. An estimator on the other hand, could not be taught of experience and judgment. He has his own practical ability to develop his own faculties of judgment. Some have learned rapidly through their own initiative and observations while others learn slowly or nothing at all. The prospect of a contractor in winning bid projects largely depends on a good estimator that possesses the following qualifications: 1. Know how of construction procedures. 2. Experienced in construction work. 3. Knowledge of information relative to materials, man-hours, equipment, overhead and other related construction costs. 4. With systematic methods preparing an estimate. 5. With good judgments in regards to location, conditions, labor and job conditions.

6. Ability to do painstaking work to make an accurate to estimating. 7. Ability to visualize step by step procedures during the process of construction.

COLLECTION OF DATA

The collection, classification and evaluation of data relative to estimating is an important work of the estimator. He takes notes and keeps records of various project costs. These data are filed systematically in an orderly manner for future references. These are: 1. 2. 3. 4. 5. 6. 7. 8. Quantity and updated unit price of various construction materials Labor conditions Work conditions Salaries and wages Equipment and rentals Weather and work conditions Causes of probable delays Conditions relative to overhead costs

PRELIMINARY SITE INVESTIGATION

Prior to the preparation of the estimate, the estimator has to visit the site personally and make a study of the existing condition of the place. For instance, on large road construction project, the estimator should take note of the location site, the geometric conditions, and soil conditions. In addition, he decide on the location of the field office, batching plant, motor pools, bodegas, bank houses, stock piling of construction materials, information concerning light, power and water. Also take note of the existing road conditions particularly those that are leading to probable source of borrow pits and construction materials. Investigate availability of private suppliers cost of hauling, prevailing prices of construction materials, local labor conditions with respect to wages, supply and general efficiency of the local workmen.

SUBDIVISIONS OF ESTIMATING
Estimating for costs for road construction may be divided into five essential parts, they are: 1. Labor. Estimating man-hour or man-delays and its equivalent costs. 2. Materials. Estimating different quantities and costs. 3. Plant and or Equipment. Estimating of number, kind and rental costs including fuel, oil and other parts required. 4. Overhead. Determine items included and its equivalent costs. 5. Profit. Estimating contractors profit in percentage. 6. Other costs. These may include cost of testing fees, gravel fees, permit fees and BIR taxes etc.

ESTIMATING LABOR, MATERIALS, PLANT AND EQUIPMENT, OVERHEAD PROFIT AND OTHER COST OF HIGHWAY CONSTRUCTION PROJECT
In estimating labor and cost, the different kinds of work involving the use of man-power should be classified first. The duration, time and number of skilled and unskilled laborers for a particular job should be determined. Two methods are being adopted by estimators in determining the cost labor: 1. Labor cost by piece work. This is popularly known as pakyaw labor wherein a price is established for a certain unit of accomplishment. For instance, the amount of P50.00 is to be paid for excavating one cubic meter, if labor accomplished 20 cubic meters, then they are entitled P1,000 for the labor. Another example is labor cost per meter or by square meter wherein the agreed unit price is multiplied to the quantity of the accomplishment. 2. Man-hour or Man-days. Using the above example, the number of days to finish excavating 1,000 cubic meters is 50 men-days. To get the estimated labor cost of the work, multiply 50 days by their daily wage is P150.00 per day, the labor cost will be P7, 500.00. Another procedure adopted by experienced estimator is the use of equipment instead of the labor base. Labor cost by using equipment is compared with manual labor cost plus the time elements involved. Whichever to his judgment is more economical at the shortest time will be recommended. 3. Estimating Materials. To have a fair and reasonable estimate of various types of materials for a particular construction, the estimator must have an update unit price of each kind of materials from a wide available sources and information. The different kinds of materials are indicated on plans and or specified in the specifications. Thus, becomes the basis of information for the estimator to prepare the bill of materials indicating the unit price for each item and the total cost involved. The major materials to estimate in road construction are: a) Earthworks comprising the roadway and the drainage excavations. Excavations for the structures, rock if any, borrow, sub-base and base course materials. b) Surfacing materials, such as sand, gravel, cement, asphalt etc. c) Standard structures d) Bridges e) Minor structures such as retaining walls, box culverts, reinforced concrete pipes, etc. f) Auxiliary works such as head walls, wing walls etc.

4. Estimating Plant Structures. For a large road construction project, construction plant includes all temporary buildings and structures for machinery and tools necessary in the implementation of the work. The temporary building structures is necessary for weather protection of the works such as: Machinery and tools for making forms; bending and cutting of steel bars; storage and handling of materials for mixing; transporting and placing o0f concrete etc. Construction plant may be located at the job site or to other convenient places. Plant costs usually include cost of transportations, installations, maintenance and repair, operations, removal, interests on investment and depreciation. Costs also include labor costs of equipment operators and supervisors. To a contractors who has deficiency of the required number of equipment for a particular job, will require his estimator to include the rentals of equipment to be rented from other contractors or from the government equipment depot. Estimate of this kind should further include the necessary fuel, oil and spare parts of the equipment to the basic rental fees. Number 1 1 1 1 3 2 10 2 1 1 1 1 2 1 1 1 2 1 1 1 1 Kind Batching plant Link belt crane Clamp shell Rock crusher Transit mixer Bulldozer Dump trucks Road grader Road roller Vibratory roller Pneumatic roller Sheepsfoot roller Pay loader Backhoe Water truck Power generator Concrete vibrators Electric generator Water pump Concrete diamond saw Vibratory screed Rental Cost (1995) P4,000 per day 3,500 per day 2,500 per day 5,000 per day 9,000 per day 4,000 per day 25,000 per day 6,500 per day 3,500 per day 4,000 per day 4,000 per day 2,000 per day 7,000 per day 2,500 per day 2,500 per day 2,000 per day 1,000 per day 1,800 per day 500 per day 1,000 per day 1,000 per day

The unit cost for this equipment may be based on working time or on output basis. For instance, the cost per hour may be computed by dividing the total equipment cost by the number of hours that the equipment is used on the job site

or by dividing the number of hours that the equipment is actually operated on the job. When cost is based on the output, the total estimated equipment cost is divided by the total number of units produced. Example, for a concrete paving work, the total Equipment cost would be divided by the total number of cubic meters of concrete mixed to obtain the equipment cost per cubic meter of concrete. 5. Estimating Overhead Cost. Overhead cost is the co panys operating expenses and other labor costs which are not considered as direct productive labor on the job such as: a. b. c. d. e. f. g. h. Office rentals, and telephone bills Insurances Office equipment and stationary Interests Legal expenses Expenses for plan and specifications Travelling expenses and sundries Salaries of managers, inspectors, timekeepers clerks, stenographer, draftsman and watchman all chargeable to the project.

Overhead costs may be divided into: a. General overhead (main office expenses) b. Job overhead (field office expenses) Overhead is usually programmed at 10% of the total project cost. For a medium scale project, only part of the salaries and wages of personnel and part of other of overhead cost are charged to the project not to exceed 10%. The excess overhead costs are apportioned to other ongoing projects of the company or from the general or revolving fund of the company. 6. Estimating Profit. The amount of profit is usually expressed in percentage of the total estimated cost of the project. Government estimates usually provides 15 percent of the total project cost for contractors profit. To the contractors, the percentage of their profit varies to 20% for small job, 15% for medium and 10-12% for large construction. 7. Other Costs. These are costs incurred which are not considered as overhead costs. Example of which are project testing fees, gravel fees, BIR tax and SOP which is sometimes the biggest of them.

FINANCING Financing calls for the need of funds to sustain the required logistics for the full execution of the work. Most of the private and corporation projects are finance through commercial loan borrowings. Similarly, most of the special infrastructure projects of the government are finance by grants or borrowing from foreign and international assistance agencies. The government creates loan committees to prepare loan documents that are required for negotiations with foreign lending institutions. The contents and scope of the proposed projects will be the subject for bargaining on the proposed loan covenants. A sufficient source of funds is necessary to cover up the estimated cost of the project including its maintenance and operational costs. SPECIFICATIONS Specifications varies depending upon the number of specification writers and the type of construction being referred to However, in this study we will adopt the standard highways and bridges as defined by the Department of Public Works and Highways (DPWH) which states: Specifications is the directions, provisions and requirements contained in the government standard specifications for highways and bridges. And to which may e added as supplemental specifications or as special provisions prepared for the project together with all documents at any description and written agreements made or to be made pertaining to the methods or manner of performing the work or the quantities and quality of materials and labor to be furnished under the contract, the method of measurements and the basis of payments. TYPICAL ITEMS FOR CONCRETE PAVING CONSTRUCTION OF A HIGHWAY PROJECTS ITEM NO. 100 105 106 107 108 110 316 405 406 413 DESCRIPTION Clearing and Grubbing Roadway and Drainage Excavation Excavation for Structures Borrow Aggregate Sub-Base Foundation Fill Portland Cement Concrete Pavement Concrete Reinforcing Steel Reinforced Concrete Culvert Pipes

CLEARING AND GRUBBING This item shall consist, of the removal and disposal of trees, stumps, brush, roots, vegetation, logs, rubbish and other objectionable matters as directed by the engineer.

ROADWAY AND DRAINAGE EXCAVATION This item shall consist of excavating and grading the roadway, including ditches, approaches and private entrances, excavating unsuitable sub-grade materials and or metalling found in the roadway and ordered reserved later placement in the improvement; excavating for removal of slide materials; removing and utilizing or disposing of all excavated materials, all in accordance with this specifications in conformity with the plans or as staked by the engineer. It shall include, when directed by the engineer, the widening of the roadway cuts and flattening of cuts slops over the widths and slopes shown on the plans, where necessary to obtain the material needed for the construction of embankment and backfilling, to prevent opening of unsightly borrow pits to increase stability or slopes. EXCAVATION FOR STRUCTURES Excavation for Structures shall consist of the removal and disposal of all excavation materials required for the construction of structures, water pipes, culvert pipes and under drains, including the work of backfilling, compacting, sloping, disposing of surplus materials and cleaning up of the sites. It shall include all necessary clearing and grubbing within the area defined by lines connecting the extremities of the end substructure units; all necessary draining, pumping, bailing, sheeting and shoring; the construction of cribs and cover dams and their subsequent removal; and the removal of old structure or parts thereof as required, except where the contract includes a separate unit price for such item or items. BORROW When sufficient suitable materials is not available from the roadway excavations, additional materials shall be obtained from sources situated beyond the right way limits, at locations designated by the engineer. The materials so obtained shall be called Borrow, and shall be of quality satisfactory for the purpose intended. Borrow shall include the clearing and grubbing of the sites not included in the areas indicated and classified on plans as Clearing and Grubbing and the removal and satisfactory placing the additional materials necessary to complete the roadbed, embankment, sub grade, shoulders, interactions, entrances, etc. The widening of roadway cuts and ditches will not be considered as borrow. AGGREGATE SUB-BASE This item shall consist of materials obtained from sources suggested on the plans or in the special provisions or authorized sources supplementary thereto and place as indicated on the plans or as directed by the engineer. Materials. Aggregate sub-base shall consist of pit run gravel, talus rock, disintegrated granite, sand, shale cinders, coral or other similar materials; or addition filler for blending, selected under the direction of the engineer. The maximum dimension of any particle shall not be greater than two thirds of the required thickness of the layer in which it is to be placed. Oversize material if

present shall be removed at the pit by screens, grizzlies, or hand picking. If necessary to obtain proper uniformity additional filler shall be blended by mixing on the roadway. The fraction of the aggregate sub-base material including any additional filler passing the no. 200 sieve shall not be more than two thirds of that passing the no. 40 sieve but not to exceed 20 percent. The fraction of the material passing the no. 40 sieve shall have a liquid limit not greater than 25 and plasticity index of not more than G. FOUNDATION FILL This item shall not consist of special approved rock or gravel backfill material furnished and placed as required to replace materials encountered and found unsuitable below the foundation elevation of the culverts, bridges and other structures and shall be constructed in accordance with these specifications and where shown in the plans or directed by the engineer in writing. Materials. Foundation fill shall consist of suitably graded gravel or rock as required by the engineer. PORTLAND CEMENT CONCRETE PAVEMENT This item shall consist of a one course Portland cement concrete, constructed on an approved prepared road in accordance with the plans and specifications and in conformity with the lines, grades and typical cross sections as shown in the plans. Portland concrete cement shall consist of the property proportioned intimate mixture of Portland cement, coarse and fine aggregates and water. Concrete shall be considered of satisfactory quality provided it is made of materials accepted for the job, is of approved job-mix, and is in complete accordance with the requirements of the standard specifications. CONCRETE This item shall consist of cement concrete for structure made from approved portland cement, water, fine aggregate, coarse aggregate, in accordance with these specifications and placed as shown on the plans or in a manner approved by the engineer. REINFORCED CONRETE CULVERT PIPES This item shall consist of reinforced concrete culvert of the sizes and dimensions required on the plans furnished and installed at such places as are designated on the plans or by the engineer, in accordance with specifications and in conformity with the lines and grades given. This item shall include the furnishing and construction of such joints and such connections to other pipes, catch basins and walls etc., as may be required to complete the structure as shown on the plans.

ADVERTISEMENTS After the preparation of the documents such as the quantity and cost estimates, contract drawings, specifications, conditions of contract and bidding documents, the project is to be advertised for bidding. An advertisement is a paid public announcement or notice for an invitation to bid for a proposed project. An advertisement for a proposed road construction project should include the following: 1. Name of the owner (office name) 2. Name or description of the project 3. Location of the project 4. Length or limits of the project 5. Level of improvement of the project 6. Cash requirements 7. Credit line requirements 8. Date of submission of Pre C-1 and Pre C-2 9. Date of bidding 10.Name and signature of the head office