SCHEDULING OF HIGHWAY IMPROVEMENTS

ALTHOUGH A SHOWING THAT BENEFITS EXCEED COSTS INDICATES THAT A PROJECT SHOULD BE CONSTRUCTED SOMETIME IT DOES NOT NECESSARILY INDICATE THAT THE OPTIMUM TIME FOR CONSTRUCTION IS NOW. LIKEWISE, THE HIGHEST PRIORITY PROJECTS ARE NOT NECESSARILY THOSE WITH THE HIGHEST BENEFIT-COST RATIOS OR THE HIGHEST INTERNAL RATES OF RETURN. INSTEAD, FOR MOST HIGHWAY PROJECTS THE OPTIMUM TIME OF CONSTRUCTION IS WHEN ANNUAL BENEFITS MINUS MAINTENANCE COSTS FIRST EXCEED THE PRODUCT OF THE DISCOUNT RATE AND THE CAPITAL COST OF THE PROJECT. IF FUNDS ARE NOT AVAILABLE TO BUILD ALL DESIRED PROJECTS NOW, THE PROJECTS TO BE BUILT FIRST SHOULD BE SELECTED IN ORDER OF THEIR RPIORITY RATIO. IN THE SIMPLEST CASE THE PROIORITY RATIO IS THE FRIST-YEAR BENEFITS MINUS MAINTENANCE AND OPERATING COSTS, DIVIDED BY THE CAPITAL COST OF THE PROJECT. GIVEN THE USUAL SITUATION OF STEADILY INCREASING BENEFITS, HIGHWAY IMPROVEMENT PROJECTS ARE RELATIVELY RISK-FREE INVESTMENTS. /AUTHOR/

Media Info

  • Media Type: Print
  • Features: Figures; References;
  • Pagination: p. 11-18
  • Monograph Title: Transportation systems planning process
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00200552
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Feb 23 1973 12:00AM