It is nowadays normal practice to carry out economic analyses in order tofacilitate the decision-making process concerning road improvement investments. Such analyses are usually undertaken during the feasibility study stage and involve the comparison of various improvement options. In developing and emerging economy countries, road improvement needs are great but resources are scarce and many roads carry low traffic volumes. In such cases, the levels of acceptable investment costs are likely to be fairly low, if such investments were to be justified solely on the basis of vehicle operating costs (VOC) savings, yielding an acceptable economic rate of return of at least 12% per annum. This paper discussed the merits of a simplified economic evaluation method based on the calculation of the First Year Rate of Return (FYRR) as a preliminary economic analysis indicator, prior to embarking on a more comprehensive economic analysis, likely to be more complicated and time consuming (e.g. using HDM4).The methodology outlined in this paper could particularly assist engineers and transport economists to quickly evaluate the economic worth of the upgrading of low-trafficked roads in developing countries. For the covering abstract see ITRD E139491.
Samenvatting