Economic Analysis

A key aspect of HfL demonstration projects is quantifying, as much as possible, the value of the innovations deployed. This involves comparing the benefits and costs associated with the innovative project delivery approach adopted on an HfL project with those from a more traditional delivery approach on a project of similar size and scope. The latter type of project is referred to as a baseline case and is an important component of the economic analysis because it serves as the control for all cost comparisons. The details of the control case are in many cases assumed because quantitative information from the project does not exist for all parameters considered in the economic analysis. In contrast, the values are typically available for the specific project.

Several innovations were adopted in the CA I-15 project. It was not possible to perform an economic analysis for each innovation because the economic impacts of each could not be isolated. For example, it is not possible to estimate the improvement in work zone crash rates solely from RSA recommendations. Also, the preconstruction analysis performed with the use of CA4PRS and Dynameq influenced the construction staging and construction alternatives selected. In addition, the CA4PRS analysis was based on projected economic benefits. The cost analysis performed in this study was therefore limited to the impact of the major innovation recognized by HfL, which is PCPS.

The baseline case assumed here was the use of a fast-setting concrete mix that not only would be the alternative Caltrans would select for areas that were repaired using PCPS, but also would allow similar work windows. The contractor’s production rates with the use of the 4x4 mix elsewhere in the project were available for use in this analysis. For several reasons, beyond the limited scope of the Super Slab® repair area the project involved the addition of two lanes in the median to accommodate traffic. This rehabilitation alternative, selected primarily from CA4PRS analysis, resulted in no reduction in lane capacity or additional delays from lane closures for PCPS installation. This factor had a great impact on the economic analysis.

For this economic analysis, Caltrans supplied the cost figures for the as-built project and baseline construction. Traditional methods would have involved the use of RSC using cast-in-place techniques. This analysis disregards the innovative approach used to determine the optimal staging plan for the rehabilitation activities because the relative benefit of the alternate staging scenarios have been previously discussed. Instead, the focus is the cost differential between PCPS and the baseline case of using RSC.

In either rehabilitation case, the work would be done during 8-hour nighttime lane closures from 9 p.m. to 5 a.m. The analysis and performance period is a 30-year service life for PCPS and 10-years for RSC (based on Caltrans’ experience). Two scenarios were examined to evaluate the economic efficiency and life cycle performance of the PCPS innovation:

• Scenario A was the total project cost and impact of performance of PCPS versus RSC.
• Scenario B was the panel replacement costs and impact of performance of PCPS versus RSC.

Details of the scenarios are in table 17.

Agency Costs

A total of 696 precast panels were installed, 440 panels during nighttime closures and 256 during the day. Daytime installation costs vary from nighttime costs because of worker pay rates, among other factors. Only nighttime installations were considered in the agency costs. Table 18 presents the agency costs, production rates, and duration to install 440 panels.

User Costs

Generally, three categories of user costs are used in an economic/life-cycle cost analysis: vehicle operating costs (VOC), delay costs, and safety-related costs. The cost differential in delay costs and safety costs were considered different enough to be included in a comparative analysis of cost differences between the baseline and as-built alternatives.

Delay Costs

The PCPS replacement was done on the two outermost lanes on each direction during nighttime. Four lanes of traffic were still maintained during closure by shifting the mainline traffic onto the median shoulders. This MOT strategy did not result in significant reduction in roadway capacity or speed before and during work zone. Therefore, the computation of delay costs and VOC was not required.

Safety Costs

1. Determine pre-construction and work zone crash rates. Estimate the traffic exposure measure in terms of million vehicle miles traveled (MVMT) and convert crash counts to crash rates (i.e. crash counts normalized to traffic exposure or crashes/MVMT).
2. Estimate unit crash costs by severity type. Adjust unit costs to current year dollars if necessary.
3. Compute work zone crash costs for the project.

Step 1. Determine Pre-construction and Work Zone Crash Rates

As stated earlier, this was a major rehabilitation project with five major and numerous minor construction stages. The construction work spanned over 400 working days involving both weekend and nighttime closures. Since the project duration was long, the actual work zone crash counts by the severity of crash type following KABCO scale and the exposure were available. Further, as the 4.617-mile roadway section under rehabilitation stretched over two counties: 0.807-mile section in Riverside and 3.81-mile in San Bernardino counties; separate crash counts were provided for the roadway sections in Riverside and San Bernardino-See Table 19.

Table 19 also presents the pre-construction crash counts to evaluate if the work zones crash rates are equal to or less than the preconstruction rate at the project location. Table 20 presents the pre-construction and during construction crash rates. As indicated, the work zone crash rates for injuries and PDO types are less than those of pre-construction crash rate, while the work zone fatality rate is almost equal to that of crash fatality rate prior to construction.

Step 2. Estimate Unit Crash Rates

Monetary damage of the crash incidents presented in Table 19 were not available; therefore, the monetary values in terms of human costs (i.e. tangible damage) and comprehensive costs (i.e. both tangible and intangible damage) were assumed based on national averages reported in a FHWA study.² The reported crash cost estimates were in 2001 dollars and were adjusted to 2011 dollars using the Bureau of Labor Statistics (BLS) indices: Consumer Price Index (CPI) and Employment Cost Index (ECI).

Table 21 presents the estimated crash costs per incident by crash type in both 2001 and 2011 dollars. The 2011 comprehensive crash costs in Table were normalized to the crash events happened on this roadway section using the pre-construction and during construction crash rates reported in Table 20.

Step 3. Compute work zone crash costs for this project.

To perform life cycle cost analysis, current and future work zone crash costs were computed for both PCPS and RSC alternatives. The current work zone crash costs were computed using the during construction crash rates, while to compute future crash costs, future work zone crash rates were estimated.

Current work zone crash costs

The current work zone crash costs were computed by multiplying the work zone traffic exposure for the entire duration of road closure and the estimated during construction cost per MVMT from Table 21. The work zone traffic exposure is different for PCPS and RSC alternatives as their installation duration.

Since the installation durations are different, work zone traffic exposure is computed for the PCPS and RSC alternatives as follows:

Traffic Exposure (MVMT) = ADT * Project Length*Number of Installation Days / 1,000,000

Scenario A. Total Project Cost

To perform life cycle analysis for Scenario A, the entire work zone of 4.617 mile long is considered.

Traffic Exposure for PCPS = 117,000 veh * 4.617 miles* 14 days /1,000,000 = 7.563 MVMT
Traffic Exposure for RSC = 117,000 veh * 4.617 miles* 14 days /1,000,000 = 2.701 MVMT

Work zone crash cost = Traffic exposure * $/MVMT

Current work zone crash cost for PCPS =7.563 MVMT * $ 69,865/MVMT = $ 528,367
Current work zone crash cost for RSC = 2.701 MVMT * $ 69,865/MVMT = $ 188,702

Scenario B. Panel Replacement Cost

To perform life cycle analysis for Scenario B, only the pavement section where the panels are replaced, which is 1.482 mile long, is considered

Traffic Exposure for PCPS = 117,000 veh * 1.482 miles* 14 days /1,000,000 = 2.428 MVMT
Traffic Exposure for RSC = 117,000 veh * 1.482 miles* 14 days /1,000,000 = 0.867 MVMT

Work zone crash cost = Traffic exposure * $/MVMT

Current work zone crash cost for PCPS = 2.428 MVMT * $ 69,865/MVMT = $ 169,599
Current work zone crash cost for RSC = 0.867 MVMT * $ 69,865/MVMT = $ 60,571

Future work zone crash costs

To facilitate the life cycle cost comparison between PCPS and RSC alternatives, the following assumptions were made:

• Over a 30-year analysis period, the future work zone crash costs are required only for RSC alternative at years 10 and 20. Since no rehabilitation is expected during the analysis period, the future work zone crash costs are not required for the PCPS alternative.
• Future work zone crash rates would not same as the during construction crash rate; rather, the crash rates were estimated by increasing the pre-construction crash rates by a factor 1.63 based on a study conducted by Ullman et al.³ Ullman et al investigated the safety of work zones for various scenarios: (1) crashes during daytime and nighttime work periods when lanes were closed and work was ongoing, (2) crashes when work was ongoing but no closures were required, and (3) crashes when no work was ongoing (the work zone was inactive). They concluded that crashes increased 60 to 66 percent (an average of 63 percent) when a traffic lane was closed day or night.
• For future rehabilitation, the work zone closure is not required for the entire current work zone of 4.617 miles. Only the 1.482-mile long pavement section where the RSC alternative is placed requires lane closure.

The future work zone crash costs were computed by multiplying the work zone traffic exposure, the estimated future work zone crash cost per MVMT. Since the estimated crash costs are normalized to crash rates of this roadway section, the future work zone crash cost per MVMT can be estimated by multiplying the pre-construction crash cost/MVMT from Table 21 with the work zone crash risk factor of 1.63.

Future crash cost for the RSC alternative = (ADT * Project Length * Number of Days) *
Pre-Construction Crash Cost/MVMT * 1.63
= (117,000 veh * 1.482 mile s * 5 days) * $ 95,557 * 1.63
= $ 135,039

Work Zone Road User Costs

The work zone road user cost is the sum of delay costs, VOC and crash costs. Since delay and VOC costs are not computed for this project, the work zone road user costs include only the crash costs as computed in the previous paragraphs. The final estimates of work zone road user costs both PCPS and RSC alternatives over the 30-year life cycle period are presented in Table 22.

Life Cycle Cost Analysis

A life cycle cost analysis (LCCA) based on a 2.3 percent discount rate and present worth method is discussed to provide a detailed context to compare both cost scenarios. A deterministic approach was used to examine the initial rehabilitation and future maintenance and rehabilitation (M&R) costs over the service life of the scenarios.

The agency and user costs and the timing of these costs from the initial rehabilitation and subsequent M&R activities were combined to formulate a projected expenditure stream for case A and case B. The anticipated net present value (NPV) of future costs of the expenditure stream was calculated by using the discount rate, allowing for a direct dollar-for-dollar comparison. The salvage value, or the value of the remaining useful service life of the initial construction and the remaining usefulness of the last M&R activity, was assumed to be negligible in either scenario. The NPV was calculated as follows:

where:

• NPV = net present value, $
• i = discount rate, percent
• n = time of future cost, years

The PCPS alternative as part of the total project cost is $1,253,106 or 2.5 percent of the baseline option in combined agency costs and road user costs in scenario A. On the other hand, considering only the panel replacement costs, the LCCA of scenario B reveals a difference of $710,571 or 29 percent. This analysis illustrates that the use of PCPS has a small impact on the overall project budget. The projected expenditure streams are shown in tables 19 and 20.

Cost Summary

A close look at the agency costs and user costs during initial construction and M&R activities suggests these costs differ by less than 3 percent. The narrow LCCA differential is considered insignificant, given the extent of variables in the analysis. No tangible total cost savings were realized in this demonstration project.

²These costs were based on F. Council, E. Zaloshnja, T. Miller, and B. Persaud, Crash Cost Estimates by Maximum Police-Reported Injury Severity Within Selected Crash Geometries (FHWA-HRT-05-051), Federal Highway Administration, Washington, DC, October 2005.

³Ullman, G.L., M.D. Finley, J.E. Bryden, R. Srinivasan, and F.M. Council, Traffic Safety Evaluation of Nighttime and Daytime Work Zones (NCHRP Report 627), National Cooperative Highway Research Program, Transportation Research Board, Washington, DC, 2008.