TO LEASE OR TO BUILD? - THAT IS THE QUESTION

The Maryland State Highway Administration (MSHA) in the USA had to decide whether to lease or build its Intelligent Transport System (ITS) infrastructure. After its second attempt to obtain fibre optic cabling was unsuccessful, it considered building its own fibre optic infrastructure to support a large expansion of its existing CHART programme. But several questions had to be answered first, and MSHA asked Computer Sciences Corporation (CSC) to analyse the lease versus build options quickly. The results of this analysis were startling. It was estimated that it would cost MSHA US$119M to build a fibre network, and that it could take up to 88 years to break even on this investment. It was much more complex than first imagined to answer the lease versus build question. The least cost approach, which was recommended, was to build a hybrid network using existing fibre, and to lease the remainder for a cost of US$68M. CSC recommended MSHA to explore or watch technologies, such as asynchronous digital subscriber line (ASDL), that could reduce lease charges, but not to pursue long-term leases. MSHA decided to use leased services, but also produce resource-sharing initiatives. It is now testing an asynchronous transfer mode (ATM) network. In general, it is advisable to examine the different possibilities before acting. For the covering abstract, see IRRD E101232.

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    UK and International Press

    120 South Street
    Dorking, Surrey RH4 2EU,   England 
  • Authors:
    • Moore, A
  • Publication Date: 1998

Language

  • English

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Filing Info

  • Accession Number: 00766856
  • Record Type: Publication
  • Source Agency: Transport Research Laboratory
  • Files: ITRD
  • Created Date: Aug 2 1999 12:00AM