Patrick DeCorla-Souza
P3 Program Manager
Center for Innovative Finance Support
Wim Verdouw
Financial Modeler
IMG/Rebel
Part A - Project Delivery Benefit-Cost Analysis
Part B - Impacts of Travel Growth Assumptions
Part C - Impacts of P3 Quality of Service Assumptions
A study was done previously by a state DOT to estimate social benefits and costs of P3 delivery for a highway project. The various inputs required for the analysis are included in the P3-VALUE 2.0 spreadsheet model.
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Key project information for the PSC in the input sheets of the model:
Key project information for the Delayed PSC in the input sheets of the model:
Key P3 Option inputs are:
Key input for the comparisons is the discount rate to be applied to future cash flows:
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Benefits & costs under Delayed Conventional Delivery | NPV @ 3.00% | Real total |
---|---|---|
Units >> | USD m | USD m |
∆ Travel time cost | 1,252 | 2,930 |
∆ Delays due to construction | (43) | (55) |
∆ Delays due to O&M | 7 | 16 |
∆ Delays due to incidents | 997 | 2,280 |
∆ Non-fuel costs | 84 | 189 |
∆ Fuel costs | (93) | (191) |
∆ Accident costs | 221 | 496 |
∆ Emissions cost | (93) | (217) |
O&M No Build cost savings | 160 | 350 |
Real construction costs | (333) | (425) |
Real operations costs | (81) | (180) |
Real base variability | (63) | (88) |
Real pure risks | (52) | (83) |
Lifecycle performance risk | (147) | (308) |
Total benefits / (costs) under Delayed Conventional Delivery | 1,817 | 4,714 |
Benefit cost ratio under Delayed Conventional Delivery | 4.5211 | N/A |
Item | Delayed PSC NPV @3% ($M) |
Social benefits (sum row 5-12) | 2,333 |
No Build cost savings (row 13) | 160 |
Construction costs (row 14) | (333) |
Operations costs (row 15) | (81) |
Risks (sum row 16-18) | (262) |
Total Net Benefits under Delayed PSC | 1,817 |
Benefits & costs under Conventional Delivery | NPV @ 3.00% | Real total |
---|---|---|
Units >> | USD m | USD m |
∆ Travel time cost | 1,440 | 3,167 |
∆ Delays due to construction | (47) | (52) |
∆ Delays due to O&M | 9 | 18 |
∆ Delays due to incidents | 1,184 | 2,517 |
∆ Non-fuel costs | 102 | 212 |
∆ Fuel costs | (124) | (231) |
∆ Accident costs | 268 | 556 |
∆ Emissions cost | (111) | (240) |
O&M No Build cost savings | 199 | 400 |
Real construction costs | (386) | (425) |
Real operations costs | (102) | (210) |
Real base variability | (74) | (91) |
Real pure risks | (62) | (88) |
Lifecycle performance risk | (185) | (351) |
Total benefits / (costs) under Conventional Delivery | 2,111 | 5,181 |
Benefit cost ratio under Conventional Delivery | 4.4637 | N/A |
Item | A. PSC benefits and costs ($M) | B. Delayed PSC benefits and costs ($M) | PSC difference ($M) (Col A - Col B) |
---|---|---|---|
Social benefits (sum row 24-31) | 2,720 | 2,333 | 387 |
No Build cost savings (row 32) | 199 | 160 | 39 |
Construction costs (row 33) | (386) | (333) | (53) |
Operations costs (row 34) | (102) | (81) | (21) |
Risks (sum row 35-37) | (321) | (262) | (59) |
Total Net Benefits | 2,111 | 1,817 | 294 |
Benefits & costs under P3 | NPV @ 3.00% | Real total |
---|---|---|
Units >> | USD m | USD m |
∆ Travel time cost | 1,477 | 3,210 |
∆ Delays due to construction | (33) | (37) |
∆ Delays due to O&M | 10 | 21 |
∆ Delays due to incidents | 1,267 | 2,654 |
∆ Non-fuel costs | 106 | 216 |
∆ Fuel costs | (131) | (238) |
∆ Accident costs | 278 | 568 |
∆ Emissions cost | (114) | (245) |
O&M No Build cost savings | 208 | 410 |
Real construction costs | (378) | (410) |
Real operations costs | (96) | (193) |
Real base variability | (71) | (86) |
Real pure risks | (57) | (80) |
Lifecycle performance risk | (171) | (318) |
Total benefits / (costs) under P3 | 2,295 | 5,473 |
Benefit cost ratio under P3 | 5.0618 | N/A |
Item | A. P3 benefits and costs ($M) |
B. PSC benefits and costs ($M) from Step 2 | P3 difference ($M) (Col A - Col B) |
---|---|---|---|
Social benefits (sum row 43- 50) | 2,860 | 2,720 | 140 |
No Build cost savings (row 51) | 208 | 199 | 9 |
Construction costs (row 52) | (378) | (386) | 8 |
Operations costs (row 53) | (96) | (102) | 6 |
Risks (sum row 54-56) | (299) | (321) | 22 |
Total Net Benefits | 2,295 | 2,111 | 184 |
Project acceleration benefits:
P3 delivery benefits:
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Net benefits @ Base Case ($M) | Net benefits @ 80% traffic ($M) |
Net benefits @ 120% traffic ($M) |
Net benefits @ 0% traffic growth ($M) |
|
---|---|---|---|---|
A. NPV of net benefits under Delayed PSC | 1,817 | 1,524 | 2,194 | 785 |
B. NPV of net benefits under PSC | 2,111 | 1,804 | 2,506 | 1,015 |
C. Difference between A and B, i.e., NPV of project acceleration | 294 | 280 | 312 | 230 |
D. NPV of net benefits under P3 Option | 2,295 | 1,984 | 2,694 | 1,177 |
E. Difference between B and D, i.e., NPV of P3 delivery | 184 | 180 | 188 | 162 |
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Test Scenario | A. NPV of PSC ($M) | B. NPV of P3 Option ($M) |
C. Difference between P3 and PSC ($M) = Col B - Col A |
Incremental difference ($M) compared to prior model run |
---|---|---|---|---|
Base Case assumptions with 0% traffic growth scenario (from Part B) | 1,015 | 1,177 | 162 | N.A. |
1. No early completion | 1,007 | 1,088 | 81 | (81) |
2. No ride quality improvement | 1,007 | 1,088 | 81 | 0 |
3. No reduction in const. and O&M duration | 1,007 | 1,084 | 77 | (4) |
4. No reduction in incident response time | 1,007 | 1,053 | 46 | (31) |
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Patrick DeCorla-Souza
P3 Program Manager
Center for Innovative Finance Support
Federal Highway Administration (202) 366-4076
Patrick.DeCorla-Souza@dot.gov