Economic and Risk Assessment of Accelerating the ROC52 Design and Construction Process

Decision makers have always been skeptical about expediting highway construction projects, as project acceleration might lead to increases in failure risks and higher mobilization costs. However, recent trends of rapidly increasing right-of-way acquisition costs and material prices (among others) have pushed transportation and planning agencies to reconsider project acceleration as an effective mechanism to reduce overall project costs. In addition, project acceleration may generate real economic returns to highway users and communities, by bringing direct and indirect benefits (such as travel time savings or safety improvements) sooner. The question, however, remains as to whether the benefits of project acceleration out-weigh its costs, within an acceptable level of risk. It is this question that the Minnesota Department of Transportation (Mn/DOT) intends to answer using the Highway 52 reconstruction through Rochester (ROC 52) project as a case study. This study intends to: develop a comprehensive methodological approach to estimating the economic impacts of transportation project delivery acceleration, within a risk analysis framework; cast the framework as a computer model to be used for various projects by Mn/DOT; estimate the macro-economic and micro-economic impacts of ROC 52 project acceleration, as a case study; and assess whether the benefits of project delivery acceleration in general, and of design-build in particular, are sufficient to justify the “risk premium” (the extra costs) paid by a project’s sponsor to obtain a guaranteed completion date and/or price from the contracting firm.

• Record URL:
  http://www.dot.state.mn.us/designbuild/roc52/docs/economic_study.pdf
• 
• Corporate Authors:

  HDR/HLB Decision Economics Incorporated

  8403 Colesville Road, Suite 910
  Silver Spring, MD  United States  20910

  Minnesota Department of Transportation

  395 John Ireland Boulevard
  St Paul, MN  United States  55155
• Authors:
  • Bekka, Khalid
• Publication Date: 2006-3-16

Language

• English

Media Info

• Media Type: Web
• Edition: Final Report
• Features: Appendices; Figures; References; Tables;
• Pagination: 80p

Subject/Index Terms

• TRT Terms: Benefit cost analysis; Case studies; Construction; Economic impacts; Planning and design; Risk analysis
• Uncontrolled Terms: Accelerated construction
• Geographic Terms: Rochester (Minnesota)
• Subject Areas: Construction; Highways; I50: Construction and Supervision of Construction;

Filing Info

• Accession Number: 01445992
• Record Type: Publication
• Files: TRIS, STATEDOT
• Created Date: Sep 14 2012 11:14AM