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5.0 Step 2: Impacts of Funding Constraints

In this step, the incremental costs and benefits from an accelerated conventional delivery method (i.e., the accelerated PSC) are calculated compared to the Delayed PSC. To do so, the overall project benefits under the accelerated PSC are first compared to the No Build alternative, as shown in the Figure below. Construction would be advanced under this implementation schedule, i.e., it would be implemented in the same time frame as the P3. With the exception of this difference in starting date, the accelerated PSC follows exactly the same structure as the Delayed PSC (same number of contracts, contract size, real project costs, project end date, etc.).

Figure 4: Accelerated PSC Project Benefits and Costs relative to No Build

View larger version of Figure 4

The acceleration has two direct impacts on the net benefits of the project:

1. The present value of construction (and operations) costs will be higher as the construction schedule is shifted forward in time;
2. Completion of the highway will advance, allowing earlier accrual of societal benefits.

To calculate the benefits under the accelerated PSC, the DOT would re-run its travel models to develop updated travel demand estimates, since earlier project delivery could affect economic and demographic drivers of travel demand in the earlier years. The cost impact of the different implementation schedule would be determined by simply shifting all costs forward in time. The net benefits would be calculated as shown in the Table below.

Table 2: Process to Estimate Net Benefits of PSC relative to Delayed PSC

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