CRITERIA FOR ROAD INVESTMENT IN DEVELOPING COUNTRIES

The objectives of road feasibility studies are discussed, comments are made on the selection among mutually exclusive alternatives, observations are made regarding project timing and the losses incurred by deferral. For any given project 2 questions must be answered: which of the competing mutually exclusive alternatives is the best solution to the need? and when should the preferred alternative, perhaps including phasing and stage construction be implemented? Preference is expressed for the criteria of NPV (though this requires a careful study of the appropriate opportunity cost) for the analysis of long term mutually exclusive projects. The correct criteria for timing is that of Annual Incremental Rate of Return (AIRR-defined as the losses incurred by one years deferral divided by the cost). In preparing programme comprising road projects which are not mutually exclusive it is, subject to some qualifications, possible to maximize the net present value of the whole program by scheduling construction starts in each years of those projects with the highest AIRR's leaving all other projects to compete for the following year's funds.

• Supplemental Notes:
  • This paper appears in "Transport Planning in Developing Countries," which is a publication containing the Proceedings of Seminar U of the Summer Annual Meeting at University of Warwick, England during July, 1975.
• Corporate Authors:

  Planning and Transport Res and Computation Co Ltd

  167 Oxford Street
  London W1R 1AH,   England 
• Authors:
  • Spottiswoode, R A
• Publication Date: 1975-7

Media Info

• Features: Tables;
• Pagination: p. 84-90
• Serial:
  • Publication of: IRCOBI SECRETARIAT
  • Publisher: IRCOBI (International Research Council on the Biokinetics of Impacts)

Subject/Index Terms

• TRT Terms: Construction scheduling; Feasibility analysis; Highways; Investments; Programming (Planning); Project management
• Uncontrolled Terms: Projects; Timing
• Old TRIS Terms: Highway programming; Substitutes
• Subject Areas: Administration and Management; Economics; Highways; Society;

Filing Info

• Accession Number: 00148229
• Record Type: Publication
• Report/Paper Numbers: P128
• Files: TRIS
• Created Date: Feb 23 1977 12:00AM