TRANSPORTATION ENGINEERING (CVE 503)

Engr. Stephen Agyeman

Department of Civil Engineering

OUTLINE

EVALUATION OF TRANSPORTATION ALTERNATIVES.

BASIC CONCEPT OF COST AND BENEFITS:

EVALUATION BASED ON ECONOMIC CRITERIA.

EVALUATION BASED ON MULTIPLE CRITERIA.

INTRODUCTION

Once a transportation plan has been nalised and the demand

along each of its highway links has been established,

a process must be put in place that helps identify the best

solution for each individual proposal within the highway network.

Each project must therefore be subject to an appraisal.

The aim of the highway appraisal process is:

to determine the economic, societal and environmental feasibility of the

project or group of projects.

INTRODUCTION CONTD
The process enables highway planners to decide:
Whether

a project is desirable in absolute terms and

Also

provides a means of choosing b/n different competing

project options,
All

of which have the ability to meet the stated goals and

objectives of the project sponsors.
The

reasoned choice model of individual or group decisions

provides a decision-making framework.

REASONED CHOICE MODEL (Zey, 1992)

Steps:
1.Problem

recognition. The decision-maker determines that a

problem exists and that a decision must be reected on.
2.Goal

identication. The decision-maker details the desired

result or outcome of the process.
3.Identication

of alternative highway schemes. Different

potential solutions are assembled prior to their evaluation.
4.Information

search. The decision-maker seeks to identify

xtics associated with the alternative solutions.

REASONED CHOICE MODEL (Zey, 1992)

Steps:
5.Assessment

of information on alternative highway schemes.

The information necessary for making a decision regarding the

preferred option is gathered together and considered.

6.Selection

of preferred highway scheme. A preferred option is

selected by the decision-maker for implementation in the future.

7.Evaluation. The decision is assessed a period of time after its execution

in order to evaluate it on the basis of its achieved results.

SCHEME APPRAISAL PROCESS

The scheme appraisal process for highway schemes is broadly into
two sections:

economic evaluation and

environmental assessment.

ECONOMIC APPRAISAL OF HIGHWAY

SCHEMES
At various points in the development of a highway project, the
developer will require economic assessments of the route options
under consideration.
This involves
comparing

their performance against the current situation of

do-nothing alternative
or

against the do-minimum alternative

Thus,

a low-cost upgrading of the existing facility.

ECONOMIC APPRAISAL OF HIGHWAY

SCHEMES CONTD

Computations are performed on the costs and benets associated

with each highway option in order to obtain one or more measures
of worth for each.

Engineering economics provides a number of techniques that result

in numerical values termed measures of economic worth (MoEW).

MoEWs consider the time value of money, an important concept in

engineering economics that estimates the change in worth of an
amount of money over a given period of time.

ECONOMIC APPRAISAL OF HIGHWAY

SCHEMES CONTD
Some common measures of worth are:
Net

present value (NPV).

Benet/cost
Internal
First

rate of return (IRR).

Year Rate of Return (FYRR).

Payback
Cost

ratio (B/C).

Period (PBP).

Effectiveness Analysis (CEA).

ECONOMIC DECISION

In economic analysis, nancial units (/$/Gh) are used as the

tangible basis of evaluation.

With each of the above measure of worth techniques, the fact

that a quantity of money today is worth a different amount in the
future is central to the evaluation.

In the process of actual selection of the best option in economic

terms, one of the above measures of worth is used to select the
chosen proposal.

When several ways exist to accomplish a given objective, the option

with the lowest overall cost or highest overall net income is chosen.

ECONOMIC DECISION CONTD

While intangible factors that cannot be expressed in monetary

terms do play a part in an economic analysis, their role is secondary.

However,

the options available have approx. the same equivalent cost/value,

the non-economic and intangible factors may be used to select the

best option.

Economic appraisal techniques can be used to justify a scheme

in absolute terms,

in which case, the decision is made on the basis of whether the project is
economically efcient or not.

ECONOMIC DECISION CONTD

Secondary Effects:
Changes

in agricultural output.

Changes

in services.

Changes

in industrial output.

Changes

in consumers behavior.

Changes

in land values.

Changes

in income.
13

ECONOMIC DECISION CONTD

A -NPV or -B/C<1 would indicate an inefcient scheme where

society would end up worse off with the scheme than without it.

Thus, economic benets accruing to the beneciaries of the

highway > economic costs incurred by those losing out as a result of
its construction.

Beneciaries are the road users and the losers are those
funding the scheme.

To differentiate b/n the economic performances of competing

options, the scheme with the highest measure of worth will be
deemed the most efcient, assuming that at least one will have a
+NPV or B/C>1.

COST-BENEFIT ANALYSIS (CBA)

The framework within which this evaluation of the economic consequences

of highway schemes takes place is referred to as cost-benet analysis.

CBA utilises the NPV technique where the costs and benets of the scheme
are discounted over time (20yrs) so that they represent present day values.

Using CBD, any proposal having a +NPV is economically sustainable in absolute

terms.

Where competing project options are being compared, assuming they are
being used in identical capacities over the same period,

the one that is less negative or more positive is chosen.

IDENTIFYING THE MAIN PROJECT OPTIONS

This is a fundamental step in the CBA process where the decision-makers

compile a list of all relevant feasible options that they wish to be assessed.

It includes do-nothing option within the analysis in order to measure those

evaluated against the baseline scenario where no work is carried out.

The do minimum option offers a more realistic course of action where no

new highway is constructed

but a set of

trafc management improvements are made to the existing route in order

to improve the overall trafc performance.

IDENTIFYING THE MAIN PROJECT OPTIONS

Evaluation of the do-nothing scenario ensures that, in addition to

the various live options being compared in relative terms,

these are also seen to be economically justied in absolute terms,

Thus, their benets > costs.

The term feasible refers to options that, on a initial evaluation,

present themselves as viable courses of action that can be brought
to completion given the constraints imposed on the decisionmaker (e.g.: lack of time, info and resources).

IDENTIFYING THE MAIN PROJECT OPTIONS

Procedures for both identification and denition of project options
include:
Drawing

on the personal experience of the decision-maker and other

experts in the highway engineering eld.
Making

comparisons b/n the current decision problem and ones earlier

solved in a successful manner.
Examining

all relevant literature.

Group brainstorming session can be quite effective in bringing viable

options to light (usually in 2 phases - non-critical & screening process).

IDENTIFYING THE MAIN PROJECT OPTIONS

One such method is to compare each new option with an existing, tried-and-tested
option used in earlier similar highway proposals by T-chart (Riggs et al., 1997).

In this Table, the proposed option would be rejected

on the basis that, while it had a lower construction
cost,
its

maintenance costs,

level

of environmental intrusion and

geometric
together

motorists,

design,

with its low level of time savings for

would eliminate it from further consideration.

IDENTIFYING ALL RELEVANT COSTS AND

BENEFITS

The application of cost-benet for project assessment in the highway

area is made more complicated by the wide array of benets associated
with a given road initiative.

Some easier to translate into monetary values than others.

Many of the benets of improvements to transport projects equate to

decreases in cost.

The primary grouping that contains this type of economic gain is termed
user benets.

Benets of this type accrue to active users of the proposed facility.

IDENTIFYING ALL RELEVANT COSTS AND

BENEFITS CONTD
Primary grouping benefits include:
Reductions

in vehicle operating costs (Tyre, Fuel, spare parts,

congestion, high speed etc.)
Savings

in time (congestion, reliability etc.)

Reduction

in the frequency of accidents (property damage easy to

cal., personal injuries and fatal accidents diff to cal.).

IDENTIFYING ALL RELEVANT COSTS AND

BENEFITS CONTD
Secondary grouping of benets those accruing to non-users of
the proposed facility. These include:
1.Positive

or negative changes in the environment felt by those

people situated either near the new route or the existing route from
which the new one will divert trafc.

These can be measured in terms of the changes in impacts such as air

pollution, noise or visual obstruction.

2.The

loss or improvement of recreational facilities used by local

inhabitants, or the improvement or deterioration in access to these
facilities.

IDENTIFYING ALL RELEVANT COSTS AND

BENEFITS CONTD
The costs associated with a proposed highway installation can fall
into similar categories.
However,
in most evaluations sufcient considerations will include:
construction
maintenance

costs incurred during the initial building phase,

costs incurred on an ongoing basis throughout the

life of the project.

ECONOMIC LIFE, RESIDUAL VALUE AND

DISCOUNT RATE

A highway project is often complex and long term,

Costs and benets associated with it occurring over a long time

frame which we term the life of the Project.

It is usually 20, 25, 35 or even 50 years or more.

It is related, in principle, to the expected lifetime of the

project under analysis.

ECONOMIC LIFE, RESIDUAL VALUE AND

DISCOUNT RATE CONTD

The costs and benets occur at different times over this time horizon.

Hence, they cannot be directly combined until they are reduced to a

common time frame.

This is achieved using discount rate, which translates all costs and
benets to time equivalent values.

The actual value used is the social discount rate, given that the
decision-maker is interested in the benets and costs to society as a
whole not to any individual or group of individuals.

ECONOMIC LIFE, RESIDUAL VALUE AND

DISCOUNT RATE CONTD

The discount rate is opportunity cost of capital in the

public sector.

I.e., the rate of return on marginal public sector

investments.

The discount rate to be used are given by the planning

authority responsible for the project.

The World Bank has not calculated a discount rate for

each project but has used 10 to 15% as a notional
opportunity cost of capital in developing countries.

ECONOMIC INDICATORS AND BASIC

ECONOMIC VIABILITY

The NPV will estimate the economic worth of the project in terms of
the present worth of the total net benets.

The IRR will give, for each option under consideration, the rate at
which the NPV = 0

B/C ratio based on the ratio of the present value of the benets to
the present value of the costs.

For IRR and B/C ratio, if the options under consideration are mutually
exclusive, an incremental analysis must be carried out to establish
the best performing one in economic terms.

All three methods depend on discounting to arrive at a nal answer.

ECONOMIC INDICATORS AND BASIC

ECONOMIC VIABILITY CONTD
Assuming a discount rate of 10%, the project will be economically
acceptable if
the

NPV of the net benets at 10% > 0,

the

IRR > 10% or

the

B/C ratio at 10% > 1.

For independent project where choosing one does not exclude the
possibility of proceeding with one or all of the others where all
techniques yield the same result, the determinant should be choice of
discount rate.

ECONOMIC INDICATORS AND BASIC

ECONOMIC VIABILITY CONTD

In choosing b/n mutually exclusive projects where choice of one

immediately excludes all others,

the most straightforward method involves choosing the option with

the maximum NPV of net benets.

Some time decision makers are required to rank order a number of

highway projects, on the basis that there is a set quantity of
resources available for developing a certain category of project.

The decision-maker uses this sequence to approve and construct these

projects until the allotted resources are exhausted.

ECONOMIC INDICATORS AND BASIC

ECONOMIC VIABILITY CONTD

In these cases, ranking based on NPV may be of limited assistance,

since high cost projects with slightly greater NPV scores may be given
priority over lower cost ones yielding greater benets per unit cost.

It is better to rank these different project options based on their

benet/cost ratio.

The one with the highest B/C score is given the rank 1, the 2nd
highest score is given the rank 2, and so on.

MERITS AND DEMERITS OF CBA

Note:
Students are to make conscious effort to research into the
advantages and disadvantages of CBA.

ECONOMIC DECISION CRITERIA (2)

Net Present Value/ Investment Cost

NPV/ C = NPV/Ci

First Year Rate of Return

FYRR
= (B1- C1) / Ci
B1 , C1
Ci

= Benefits and Costs in year 1 after construction

= Road investment costs

Payback Period = C0/NAS, Where NAS= net annual savings

32

WORK EXAMPLES - PBP

Example Comparison of toll-bridge projects based on payback analysis
A

developer is faced with a choice b/n two development alternatives for a toll
bridge project: one large-scale proposal with higher costs but enabling more
trafc to access it, and the other less costly but with a smaller trafc capacity.
Details

of the costs and revenues related to both are given in Table 2.

Calculate

the payback period and check this result against the NPV for each.

Project Details

Option A

Option B

Initial cost (Gh)

27

50

Annual profit (Gh)

10

Discount rate (%)

Life (years)

20

20

SOLUTION 1.1

Solution 1.1

SOLUTION- NPV
Decision:
On

the basis of its present worth valuation, option B is preferred,

having a NPV over twice that of option A.
Thus,

while payback is a useful preliminary tool,

primary

methods of economic evaluation such as NPV or IRR should

be used for the more detailed analysis.

EXAMPLE: UNEQUAL LIVES

Project A costs 3000 and then 1000 per annum for

the next four years.

Project B costs 6000 and then 1200 for the next

eight years.

Required rate of return for both projects is 10%.

Which is the better project?

37

EQUIVALENT ANNUAL VALUE METHOD

(EAV)

What amount, to be received each year for n years, is equivalent

to receiving the net present value of a project whose life is n
years?

The project with the higher EAV is preferred to the project with
the lower EAV.

NPV0
EAV
A n, k

SOLUTIONPROJECT A
NPV C PVIFA 4, 0.10 C0

$1000 3.1699 $3000

$3170 $3000
$6170

PV of costs
Equivalent annual cash flow
PVIFA 4, 0.10
$6 170

3.1699
$1 946

SOLUTIONPROJECT B
NPV C PVIFA 8, 0.10 C 0
$1 200 5.3349 $6000
$6402 $6000
$12 402
PV of costs
Equalivant annual cash flow
PVIFA 8, 0.10
$12 402

5.3349
$2325

SolutionInterpretation
Project A is better because it costs $1946 per year
compared to Project Bs $2325 per year.

WORK EXAMPLE 1.2

Cash flow
project

Year 1

Year 2

Year 3

Year 4

Initial cash
outlay
-70 000

9250

24100

29122

40000

-60 000

40000

20420

10520

5000

Ps: Cost of capital of 12% is used for estimating NPV

Solution 1.2: NPV and IRR Calculations

Project
A
Initial cash outlay -70000
Year 1
9250
Year 2
24100
Year 3
29122
Year 4
40000
Total
32472
NPV
3620

B
-60000
40000
20420
10520
5000
15940
2659

i
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%

NPVA
32472
26629
21258
16310
11746
7527
3620
-2
-3367
-6497
-9412

NPVB
15940
13375
10967
8703
6570
4559
2659
861
-841
-2455
-3987

Solution 1.2
Project

NPV

Rank

IRR

Rank

$3620

14%

$2659

15%

Economic Decision Criteria (3)

NPV

IRR3

NPV/C

FYRR

Project economic validity

V.Good V.Good

V.Good

Poor

Mutually exclusive projects

V.Good

Poor

Good

Poor

Project timing

Fair

Poor

Poor

Good

Poor

V.Good

Good

Poor

Fair

Poor

V.Good

Poor

Project screening

Under budget constraint

Notes:
1.Check for robustness to changes in key variables (sensitivity analysis)
2.

With incremental analysis

3.

IRR may be indeterminate with NONE or MANY solutions.

ENVIRONMENTAL APPRAISAL OF HIGHWAY

SCHEMES

While the cost-benet framework for a highway project

addresses 2 objectives of transport efciency and safety.

It makes no attempt to value its effects on the environment.

Environmental evaluation therefore requires an alternative

analytical structure.

The structure developed within the last 30yrs is termed EIA.

ENVIRONMENTAL APPRAISAL OF HIGHWAY

SCHEMES CONTD
The developer must assess the impact of the proposed project using
the following format for the EIS:
The

probable environmental impact of the proposal.

Any

unavoidable environmental impacts.

Alternative
Short-run

b/n the two.

Any

options to the proposal.

and long-run effects of the proposal and any relationship

irreversible commitment of resources necessitated by the

proposal.

ENVIRONMENTAL APPRAISAL OF HIGHWAY

SCHEMES CONTD
Details minimum information that must be contained within the EIS
include:
1.A

physical description of the project.

2.A

description of measures envisaged to reduce or remedy the

signicant adverse environmental effects of the project.
3.The

data required to both identify and assess the main effects

on the environment of the project in question.

ENVIRONMENTAL APPRAISAL OF HIGHWAY

SCHEMES CONTD
12 environmental impacts forming the assessment framework are:
1.

Air quality.

2.

Cultural heritage.

3.

8.

Pedestrian, cyclist & community

effects.

Construction disturbance.

9.

Vehicle travellers.

4.

Ecology/nature conservation.

10.

5.

Landscape effects.

11.

6.

Land use.

12.

7.

Trafc noise and vibration.

Water quality and drainage.

Geology and soils.
Policies and plans.

ENVIRONMENTAL APPRAISAL OF HIGHWAY

SCHEMES CONTD

Some of the above impacts can be estimated in quantitative terms,

others only qualitatively.

It is vital that the environmental info is presented in an explicable

format so that both members of the public and decision-makers at
the highest political level can mix. their use of the info.

One such format is to use the environmental impact table (EIT).

A tabular presentation of data summarising the main impacts of a

proposed highway scheme.

At the early stages of the highway planning process, the EIT format
can be used to consider alternative route corridors.

Appraisal groupings and Sample EIT

for local people and their
communities

TRAFFIC CATEGORIES

Normal traffic: Existing traffic and growth that would occur on

road, with and without the investment.

Diverted traffic: Traffic diverted from another road with same

origin and destination to as the project road as a result of the
investment.

Generated traffic: Traffic associated with existing users of the

road driving more frequently or driving further than before.

Induced traffic: Traffic attracted to the project road due to

increased economic activity in the roads zone of influence brought
about by the project.

DEVELOPMENT BENEFITS

NPV AND IRR CALCULATION (1)

NPV AND IRR CALCULATION (2)

NPV Versus IRR

- The IRR and NPV will not necessarily rank the alternatives by the same order
- Always use NPV to compare project alternatives

Multiples Rates of Return

No Rate of Return

Same Rate of Return

Incremental Rate of Return

IRR Reinvestment Assumption

Modified Internal Rate of Return

BENEFITS & COST

120

100

Alternative B

Benefits

80

60

40

20

Alternative A
0
0

20

40

60

Costs

80

100

120

NET BENEFITS & COSTS (EFFICIENCY FRONTIER)

8
7
Alternative B

Net Benefits (NPV)

6
5

Alternative A

4
3
2
1
0
0

20

40

60

Costs

80

100

120

COMPARISON OF ALTERNATIVES

When comparing project-alternatives, the NPV is used to select

the optimal project-alternative (alternative with highest NPV).

The IRR or the B/C ratio are not recommended to compare

alternatives of a given project.

Projec
t

Alternatives NPV
0.0
3.7
6.7
5.5

Optimal
Alternative:
Highest NPV

RANKING PROJECTS
When comparing the economic priority of different projects, a
recommended economic indicator is the NPV per Investment ratio

Project
s

Selected
Alternative

NPV/Investment

Overlay

8.4

Reseal

5.2

Overlay

2.1

P
R
I
O
R
I
T
Y

BUDGET CONSTRAINTS SIMPLE METHODOLOGY

Projects

NPV
Selected
Alternative
Overlay
Reseal

Available Budget Overlay

Reseal

16.8
15.6
20.0
3.0
5.0

Investment

NPV per
Investment

2.0

8.4

3.0

5.2

5.0

4.0

1.5 Off
Budget2.0
Constraint Cut

P
R
I
O
R
I
T
Y

BUDGET CONSTRAINTS OPTIMIZATION

Projects Alternatives

NPV
0.0
3.7
6.7
5.5
0.0
2.0
1.0
3.5

Available Budget

0.0
5.4
2.1
3.2

Evaluates all possible combinations

of project-alternatives to find the
combination that maximizes the NPV
of the overall network for the given
budget constraint.
P = Number of projects
A = Number of alternatives
C = Number of possible combinations
C=A^P

APPRAISALS & POST EVALUATIONS (1)

An

Appraisal is carried out before an investment is made.

Everything is uncertain.

Post evaluation may be made say 5yrs after the

investment.

The

investment is known and 5yrs of with case are known.

The without case is unknown as is the remainder of the

with case.
70

APPRAISALS & POST EVALUATIONS (2)

In

Both Cases forecasting and evaluation models are

required to come to an answer.

Hence

we can never be certain about the viability of an

investment !

71

SENSITIVITY ANALYSIS
Consequences

of changes on inputs

Investment

Costs (e.g. +15%)

Traffic Growth Rate (e.g. = zero)
Generate Traffic (e.g. = zero)
Value of Time (e.g. = zero)
A

= Investment Costs Increase (e.g. +15%)

B = Road User Benefits Decrease (e.g. -15%)
C = A and B together

SWITCHING VALUES ANALYSIS

Inputs

that yield a NPV equal to zero

Investments

Costs
Normal Traffic
Traffic Growth Rate
Generate Traffic
Investment

Cost
Road User Benefits

RISK ANALYSIS

Inputs vary at the

same time following
some defined
distributions

74

Rural Transport Infrastructure

Tracks

Roads

Highways

Rural Transport
Infrastructure
Focus on social evaluation (cost effectiveness indices, community
priorities and multi-criteria analysis)

SOCIAL BENEFITS: WHY THE CONCERN ?

There is unease with conventional appraisal based primarily on

transport cost savings to traffic

There is a strong desire at community and national levels for

better access and mobility which is frequently not matched by
standard measured economic benefits

The rich world governments subsidise rural transport.

Should the same happen for developing countries ?

Isolation is a recognised characteristic of poverty

SOCIAL BENEFITS: WHY THE CONCERN ?

There is a feeling that a minimum degree of access and mobility is

a basic human right

Development has moved away from a narrow definition of economic

development towards concern with livelihoods and meeting
Millennium Development Goals

The issue is particularly important when roads are impassable to

motor traffic

ECONOMIC & SOCIAL BENEFITS

Consumers and producers surplus approaches are very economic in

orientation.

Yet roads provide social benefits including improved access to

health and education facilities and improved social mobility that
cannot be easily translated into conventional economic benefits.

Although they may have important long term economic

consequences.

Improved health and education and more secure social networks

increase long term earning capabilities but so far the economic
forecasting framework does not include this.

ECONOMIC & SOCIAL BENEFITS

When roads are impassable to motorized traffic we know that the

quality of health care and schooling falls.

Drug supply and supervision drops.

Likewise no NGO, government agency or commercial enterprise

will establish or support a service which cannot guarantee all year
round access.

INDICES AND RANKING

Widely

used for feeder road planning; there are many

different approaches, e.g.:
cost

of improvement/population.

estimated

trips/cost.

Advantages: Speed, simplicity, transparency, many factors

can be incorporated.

INDICES AND RANKING

Disadvantages:

How do we value widely different factors ? (adding up apples and

pears);

Weightings are not stable ;

Cannot easily address questions of road standards,

Timing etc.;

Possible double counting

EXAMPLE OF TWO INDICES

i) Andhra Pradesh (India)
cost effectiveness = cost of upgrading/ population served
But no measure of condition change and no importance to traffic
ii) Airey & Taylor
1st for impassable roads
rank
= cost per head of establishing basic access
2nd when access is there:
prioritization index

estimated trips x access change

= -----------------------------------------rehabilitation cost per km

COMMUNITY PRIORITIES

Community priorities now often form an important part of feeder

road appraisal.

It is possible just to ask communities to rank the investments they

prefer- both within the road sector or between roads and other
investments.

Advantages: Community acceptability, use of community knowledge

Disadvantages: Sectional interest groups may dominate voting,

community knowledge of area or road impact may be poor.

COST EFFECTIVENESS ANALYSIS (CEA)

Compares the cost of interventions with its predicted impacts and it is

used where the benefits cannot be measured in monetary terms, or
where the measurement is difficult

It includes provisions that

a.

b.

the objectives of the intervention are indicated and are clearly

part of a ampler program of objectives (such as reduction of the
poverty);
the intervention represents the smaller cost alternative of
obtaining the indicated objectives

It produces effectiveness indicators, such as Total Beneficiary

Population per Investment or Investment per Beneficiary Population.

CEA COMPARISON OF ALTERNATIVES

To compare project-alternatives, the investment cost is used to

select the optimal alternative.

The selected alternative is the one with the lowest investment

cost that will achieve the objective of the program.

Project

Alternatives Investment
2.0
Optimal Alternative:
3.7
Lower Investment
1.7
5.5

PROJECTS ELIGIBILITY WITH CEA

To assess if a project is eligible, an acceptable effectiveness

indicator threshold is defined
Investment per
Population
(U$/person)
Projects

50
150
500

Effectiveness
Indicator
Threshold
Example
Eligible
Not Eligible

Effectiveness
Indicator Threshold

Evaluate Universe of
Projects and Available
Budget

88

POSSIBLE CEA INDICATORS

Investment Cost per Total Beneficiary Population

100 US$ per person

Total Beneficiary Population per Investment Cost

0.01 persons per US$

Total Beneficiary Population per Investment Cost in thousands of

dollars
10 persons per 1,000 US$

Etc.

OPTIONS FOR BENEFICIARY POPULATION

Rural beneficiary population

Poor beneficiary population

Effectiveness = (poor beneficiary population)/Investment

Mixed beneficiary population

Effectiveness = (rural beneficiary population)/Investment

Effectiveness = (poor persons + 0.3 non poor persons)/Investment

Etc.

TOTAL BENEFICIARY POPULATION (1)

Total Beneficiary Population = Directly Benefited Population +
Indirectly Benefited Population.

The Directly Benefited Population is the one that lives next on

the road, defined for example to 2.0 km at each side of the road,
and the population in the ends of the road, depending on its
characteristics and the use of the road.

The Indirectly Benefited Population is the population that lives in

other roads near the road in consideration, who use the project
road to arrive at the main population center of the region or at a
main road.

TOTAL BENEFICIARY
POPULATION (2)
For example, for the road section B-C:
Directly Benefited Population = Population along section B-C plus on towns B & C
Indirectly Benefited Population = Population along section A-B plus on town A

MULTI CRITERIA ANALYSIS (MCA) (1)

It adopts criteria such as traffic, proximity to educative, health,

and economic centers, etc.

To each section, a number of the points is assigned to each

criteria that correspond to the fulfillment of the criteria.

The added number of the points that each section receives is

computed simply adding the points assigned for each criteria, or
with the use of a more complex formula,

for example, weighting the criteria by their perceived importance.

MULTI CRITERIA ANALYSIS (2)

It produces a priority indicator.

The indicators used in a MCA reflect implicit economic and subjective

evaluations.

If the weights and the points are decided and assigned on a

participative way,

the MCA has the potential to be a good participative method for

planning based on implicit a socioeconomic estimates.

Nevertheless, it tends to be applied by planning consultants or in

isolation without the consultation with the users and communities
affected by the project.

MULTI CRITERIA ANALYSIS (3)

The result of the MCA, is often, unfortunately, not

transparent, specially if many factors are considered and a
complicated formula is also applied

Therefore, if it is adopted, this method must be used very

carefully and to be maintained simple, transparent, and
participative.

MULTI CRITERIA ANALYSIS EXAMPLE (1)

Level of poverty of the influence area (Low, Medium, High).

Potential for economic development of the influence area (Low,

Medium, High).

Importance of the road given by local consultation process (Low,

Medium, High).

Provision of access of social services of the road (Low, Medium,

High).

Problems of transitability of the road (Low, Medium, High).

Functional classification level of the road (Low, Medium, High).

Existence of public transport (Low, Medium, High).

Multi Criteria Analysis Example (2)

Population
Beneficiary
Population
per km

Factor

9,889
520
1,237
564
344
503

Agricultural Area

Poverty
Poverty
Percent

1.00
0.05
0.13
0.06
0.03
0.05

99%
99%
99%
97%
97%
97%

Percent
of Area of
Influence

Factor

1.00
1.00
1.00
0.98
0.98
0.98

0%
0%
0%
14%
36%
18%

Priority Index
Functional
Location on Basic
Classification
Network

Traffic
Daily
Traffic
(AADT)

Factor

0.25
0.64
0.32

20
20
15
80
15
35

A=4 B=3
C=2 D=1

Factor

0.25
0.25
0.19
1.00
0.19
0.44

1
2
2
3
3
3

Yes = 1
No = 0

Factor

0.33
0.67
0.67
1.00
1.00
1.00

1
1
1
1
1
1

1.00
1.00
1.00
1.00
1.00
1.00

Priority Index
Health Centers

Factor = Value /
Maximum Value

Yes = 1
No = 0

0
0
0
0
0
0

Factor

Public Transport

Schools
Yes = 1
No = 0

0
0
0
1
1
1

Factor

1.00
1.00
1.00

Yes = 1
No = 0

1
1
1
1
1
1

Factor

1.00
1.00
1.00
1.00
1.00
1.00

Environment
Feasibility
Yes = 1
No = 0

1
1
1
1
1
1

Factor

1.00
1.00
1.00
1.00
1.00
1.00

Factor

Priority
Index

5.6
5.0
5.0
7.3
6.8
6.8

Hea

The End