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Road transport investment model RTIM3. Sixth International Conference on Low Volume Roads, Minneapolis, Minnesota 20-25 June, 1995

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TRANSPORT RESEARCH LABORATORY Road transport investment model RTIM3 M A Cundill and S J Withnall iW /c -4 A1 Overseas Centre Transport Research Laboratory Crowthorne Berkshire United Kingdom IA TITLE by /. 11 - 1 CUNDILL, M A, AND S J WITHNALL. (1 995). Road transport investment model RTIM3. In: Sixth International Conference on Low Volume Roads, Minneapolis, Minnesota 25-29 June, 1995. Transportation Research Record, Volume 1. Washington DC: Transportation Research Board, National Research Council, 1 87-1 90. Road Transport Investment Model RTIM3 M.A. Cundill, Transport Research Laboratory, United Kingdom S.J. Withnall, O'Sullivan & Graham Ltd, United Kingdom To simplify the economic appraisal of road investments in developing countries, a new version of the Road Transport Investment Model (RTIM) has been issued by the Overseas Centre of the Transport Research Laboratory. The model consists of a series of linked compiled spreadsheets that take the user through the stages of an economic appraisal. It is easy to use and offers context-sensitive help facilities, data checking on input, and tabular and graphical outputs. The model runs quickly and easily on a small personal computer. Two examples of its use in Tanzania are described. The Transport Research Laboratory (TRL) devel- oped the Road Transport Investment Model (RTIM) for the economic appraisal of road schemes in developing countries (1). The model com- pares road expenditures on road improvements and road maintenance with the operating costs over the life of a road. It can be used to determine if improvements or given maintenance standards are -economically justified. The main elements of the model are road deteriora- tion relationships, which predict how the condition of a road will change during its life, and vehicle operating cost relationships, which calculate how road user costs will vary with the state of the road. These two sets of relationships have been the subject of extensive field studies. RTIM has been in use for more than 20 years and has been applied to projects in more than 30 countries. USER PROBLEMS TRL, has been advising on economic appraisals in de- veloping countries for years. There is a clear need for simple and easily understood investment models. The main problems include the following. * Obtaining the necessary input data. The models usually require detailed data inputs describing the roads, the vehicles, traffic flows and compositions, and so forth. In general, the more complex the model, the greater the number of inputs required. Deriving them can be quite beyond the means of many users, who may have to estimate or rely on the default values provided with the models. This may not be appropriate. *Adapting the models to deal with nonstandard sit- uations. A large proportion of economic appraisals have aspects that are not-standard-and that are not expressly treated in the models. To deal with them, ad hoc modi- fications must be made to the input data or to the method of analysis. The full implications of these modi- fications are easily misunderstood. * Training and retaining model users. Government ministries in developing countries often experience great difficulty training and retaining skilled computer mod- ellers. Frequently, the only significant economic ap- 187 188 SIXTH INTERNATIONAL CONFERENCE ON LOW-VOLUME ROADS praisal exercises carried out are conducted by visiting specialists on short-term assignments. When they leave, there is little residual ability to extend or modify their analyses. *Keeping up with research developments. Road in- vestment models incorporate the results of extensive field studies carried out over many years. However, the research findings are not conclusive. New relationships are being developed to improve existing models and ex- tend the models to other applications. An investment model must be able to incorporate new findings without needing a major rewrite. NEW DESICGN To address these problems and take advantage of facil- ities provided by the modern personal computer, RTIM was rewritten. The new version, RTIM3, was released in July 1993. It consists of a series of interlinked spread- sheets that take the user through the different steps of an economic assessment (Figure 1). A spreadsheet for- mat was chosen because (a) it lends itself well to a year- by-year analysis, (b) it offers very direct user interac- tion, and (c) most PC users are familiar with it. The spreadsheets were compiled using Baler. (Baler and Lotus are the respective trademarks of the Baler Software Corporation and the Lotus Development Cor- poration.) To help with data entry, the model provides context-sensitive help screens that give details of the re- quired input, including typical values and acceptable ranges. In addition, help screens describe how each Base Case Project Case [~~~~~~~~~77 Part~~~~~~~~~~~~~~~~~~~~~.. .... Pert 2 Ma.intenance. . Discounted costs Discounted benefits Net Present Value Internal Rate of Return FIGURE 1 Program structure. spreadsheet works and supporting background infor- mation is provided. Equations are protected from accidental Corruption and function keys have been redefined to automate pro- cedures such as printing and saving files. Results can be exported in a Lotus spreadsheet. To facilitate error de- tection, data inputs are checked on entry, and error mes- sages are prominently displayed. If an error message is saved, the program generates a warning tone. The spreadsheet calculates the results of the infor- mation and presents the findings as tables and a graph. On the basis of intermediate outputs, the user has the opportunity to adjust the input data. It is easy to move on to the next spreadsheet or backtrack and change in- formation in an earlier spreadsheet. Overall, RTIM3 uses the same equations as does RTIM2. However, some of the relationships have been simplified, and facilities have been added to allow users to adjust relationships. The modular structure makes it possible to use dif- ferent spreadsheets in different situations. In addition to the alternative spreadsheets for earth, gravel, and paved roads, there is a simple spreadsheet that allows the user to specify the yearly road roughness and maintenance costs rather than having them calculated by the model. If road conditions or traffic levels are not uniform, it may be necessary to divide the road into separate links. The model allows this, and up to five links can be com- bined in one analysis. In most cases, the spreadsheet can calculate the ef- fects of changing input data immediately. However, the vehicle operating cost equations and the economic anal- ysis are complex. They are derived using automated routines but normally execute results quite quickly. The hardware requirements of the new program are modest, and include a PC with one megabyte of RAM, a few megabytes of hard disk space, and preferably a color monitor. Figure 2 shows a typical graphical output from the economic analysis. It depicts the year-by-year dis- counted costs and benefits arising from a project to sur- face dress a gravel road. The construction costs are the large initial negative values.- The vehicle operating cost benefits are shown over the next 20 years and decline steadily due to discounting. The positive spikes repre- sent additional benefits, the savings in regraveling costs and the terminal value. CASE STUDIES Two very different case studies from Tanzania demon- strate the use of RTIM3. The first is the rehabilitation of a paved highway, and the second is improvements to a road network. CUNDILL AND WITHNALL 189 ECONOMIC SUMMARY .6 0Q. 2.9 A is 40 Year FIGURE 2 Typical program output. Nyanguge-Bunda-Musoma Pavement Evaluation The study was designed to determine the economic vi- ability of proposed improvements to a 192-kmn high- way. Improvements to two nearby roads were expected to increase traffic flow, which raised the possibility of raid deterioration of the highway. To carry out the analysis, the highway was divided into six sections and each was examined separately. In the base case, it was assumed that a routine main- tenance regime would be adopted; in the project case, it was assumed that there would be partial reconstruc- tion or single-seal surface dressing. Figure 3 shows the calculated internal rates of return (IRR) for each sec- tion. The second section, which is the roughest, had the highest IRR. The others were not economically justified because their IRRs were less than the specified discount rate of 12 percent. A number of sensitivity tests were carried out, the results of which are also shown in Figure 3. Traffic growth, level of traffic generation, axle loading, and im- provement costs were examined. The consequence of a 4-year postponement in implementation was also consi'dered. The results show that the improvement to Section 2 was always justified; higher traffic growth could almost 30 5 20 2c 0 Normal Zero traffic Higher axle Higher growth loads (+50%) improvement cost Higher traffic No generated Higher axle 4-year growth traffic loads (+ 100%) postponement FIGURE 3 Nyanguge-Bunda-Musoma pavement evaluation: sensitivity of internal rates of return. justify the improvement to section 3; increased axle loads (due to overloading) could justify the improve- menits to Sections 3, 4 and possibly 5; and a 4-year postponement would make all the proposed improve- menits economically sound. Road Network Improvements in Ruvuma and Southern Iringa The second study considered possible improvements to a 1200-km network of trunk, district, secondary, and tertiary roads. The network was divided into 51 sepa- rate roads, and an improvement project was proposed for each one. Limited funds were available, so the proj- ects were ranked -in-.order of rate of return. The form of the improvement varied with road type and ranged from resurfacing (in the case of paved trunk roads) to gravelling (in the case of rural earth roads). The analysis included economic allowance for social benefits, such as more reliable access to schools and hospitals. Overall, the rates of return were very high:. 43 projects had an IRR greater than 12 percent and 23 projects had an IRR greater than 24 percent. The analysis was supplemented by a series of sensitivity tests. Sections 1.2,5.6 Single-seal surface dressing Sections 3,4 Partial reconstruction 2 ... 3 4. IRR 12% 7 1 CUNDILL AND WITHNALL 189 1 1 1 1 190 ~~SIXTH INTERNATIONAL CONFERENCE ON LOW-VOLUME ROADS DISCUSSION OF RESULTS The model has proven to be quite successful. Users have found it easy to understand and operate; therefore, they are quickly able to identify the key factors in their anal- yses. One factor it often highlights is a heavy depen- dence on the assumed level of road maintenance in the base case. RTIM3 is issued under license and sold at a nominal price (£150). To date, 100 copies have been distributed to users worldwide. Further spreadsheets on road de- terioration are planned to incorporate more recent re- search findings. The possibility of producing further modules on vehicle operating costs and traffic conges- tion is under review. ratory, which was funded by the Overseas Development Administration. The authors would like to thank the Ministry of Works, Communications and Transport, Tanzania, and O'Sullivan & Graham Ltd., United Kingdom, for use of results from the two case studies. This paper is presented by permission of the Over- seas Development Administration and the Chief Exec- utive of TRL. REFERENCE 1. Parsley, L. L., and R. Robinson. The TRRL Road In vest- ment Model [or Developing Countries (RTIM2). TR.RL Laboratory Report 1057. U.K. Transport and Road Re- search Laboratory, Crowthorne, Berkshire, England, 1982. ACKNOWLEDGMENTS Development of RTIM3 forms part of the research of the Overseas Centre of the Transport Research Labo- The views expressed in this paper are not necessarily those of the Department of Transport or the Overseas Development Administra- tion. Extracts from the text may be reproduced, except for commer- cial purposes, provided the source is acknowledged. 190