COUTS DES ROUTES

SUR TOUTE LEUR DUREE

DE SERVICE
CHAUSSES SOUPLES

WHOLE LIFE COSTING OF

ROADS
FLEXIBLE PAVEMENTS

Comit technique AIPCR des Routes souples (C8)

PIARC Technical Committee on Flexible Roads (C8)

Sous-comit 3 : Performances sur lensemble de la dure de vie

Sub-Committee 3: Whole Life Performance
CONTENTS
FOREWORD ...............................................................................................................................................9

1. INTRODUCTION............................................................................................................................11

1. PROJECT INCEPTION ...................................................................................................................15

2. ROAD DESIGN ............................................................................................................................15
3. CONSTRUCTION .........................................................................................................................17
4. MAINTENANCE ..........................................................................................................................19

2. WHAT IS WHOLE LIFE COSTING OF ROADS?....................................................................25

2.1 COMPONENTS OF WHOLE LIFE COST .........................................................................................29

2.1.1 Costs - Highway Authority .........................................................................................29

2.1.2 Costs - Road User.......................................................................................................31
2.1.3 Costs - Road Accidents ...............................................................................................33
2.1.4 Other Social Costs ......................................................................................................35

2.2 WHOLE LIFE COSTS FOR ALL CLASSES OF ROAD ......................................................................37

2.3 PAVEMENT CONDITION ..............................................................................................................39

2.3.1 Maintenance Requirements ........................................................................................39

2.3.2 Aspects of Pavement Condition ..................................................................................43
2.3.3 Pavement Type............................................................................................................47
2.3.4 Traffic .........................................................................................................................51

2.4 PROJECT AND NETWORK LEVEL ................................................................................................53

2.4.1 Whole Life Costing Systems........................................................................................53

2.4.2 Discount Rate and Analysis Period ............................................................................55
2.4.3 Salvage Value .............................................................................................................59
2.4.4 Models used in Analysis .............................................................................................63
2.4.5 Components of Whole Life Cost Models.....................................................................65
2.4.6 Project Level Analysis ................................................................................................71
2.4.7 Network Level Analysis ..............................................................................................73

2.5 LINKS TO OTHER PARTS OF THE ASSET ......................................................................................77

2.6 DETERMINISTIC AND PROBABILISTIC ANALYSES.......................................................................79

3. QUESTIONNAIRE SURVEY ........................................................................................................87

3.1 AIMS OF THE SURVEY ................................................................................................................87

3.2 THE QUESTIONNAIRE .................................................................................................................87
3.3 SUMMARY OF RESPONSES ..........................................................................................................89

PIARC . 3 . 08.09.B - 2000

4. USES OF WHOLE LIFE COSTING .............................................................................................95

4.1 STANDARDS AND SPECIFICATIONS .............................................................................................95

4.2 RECOMMENDED DESIGNS FOR NEW PAVEMENTS ......................................................................97
4.3 NEW TECHNIQUES AND MATERIALS ..........................................................................................97
4.4 IMPLICATIONS OF VARYING MAINTENANCE STRATEGIES ..........................................................99
4.5 ADJUDICATION OF TENDER ALTERNATIVES .............................................................................101
4.6 PERFORMANCE BASED SPECIFICATIONS ..................................................................................103
4.7 NETWORK MANAGEMENT........................................................................................................105

5. ISSUES AFFECTING THE USE OF WHOLE LIFE COSTING ............................................109

6. FUTURE DEVELOPMENTS.......................................................................................................119

7. CONCLUSIONS.............................................................................................................................125

8. REFERENCES ...............................................................................................................................128

9. BIBLIOGRAPHY ..........................................................................................................................130

APPENDICES..........................................................................................................................................137

APPENDIX 1............................................................................................................................................138

MEMBERS OF SUB-COMMITTEE C8-3 ...........................................................................................138

CHAIRMAN ........................................................................................................................................138
REPORT DRAFTING SUB-GROUP ........................................................................................................138
SUB-COMMITTEE MEMBERS..............................................................................................................138
COMMENTS ON REPORT RECEIVED ...................................................................................................140

APPENDIX 2............................................................................................................................................143

GLOSSARY OF TERMS........................................................................................................................143

TERMS ASSOCIATED WITH WHOLE LIFE COSTING ............................................................................143

TERMS ASSOCIATED WITH ROAD MAINTENANCE WORK ...................................................................147

APPENDIX 3............................................................................................................................................151

QUESTIONNAIRE SURVEY................................................................................................................151

WORLD ROAD ASSOCIATION (PIARC) .............................................................................................151

TECHNICAL COMMITTEE ON FLEXIBLE ROADS (C8) .........................................................................151
WHOLE LIFE PERFORMANCE .............................................................................................................151
ENGLISH QUESTIONNAIRE .................................................................................................................151
PART 1 - WHOLE LIFE PERFORMANCE ...............................................................................................153
PART 2 - METHODS OF DETERMINING PAVEMENT RESIDUAL LIFE ....................................................167

PIARC . 5 . 08.09.B - 2000

APPENDIX 4............................................................................................................................................171

RESPONSES TO THE QUESTIONNAIRE.........................................................................................171

APPENDIX 5............................................................................................................................................173

ANALYSIS OF THE QUESTIONNAIRE RESPONSES...................................................................173

PART 1 - WHOLE LIFE PERFORMANCE ................................................................................................173

PART 2 - METHODS OF DETERMINING RESIDUAL LIFE ......................................................................199

PIARC . 7 . 08.09.B - 2000

Foreword
The objective of the Road Technology Topic Area set out in the PIARC Strategic Plan is
to improve the provision, maintenance and performance of road infrastructure in
accordance with international best practice. One of the essential requirements to meet
this objective is a means of assessing the relative merits of the various forms of
construction and of the maintenance processes. This can be done by considering the
costs and the performance of the materials and processes used over an extended
period of time. In order to meet this objective, the Technical Committee 8 on Flexible
Pavements decided to set up a Sub-Committee to study Whole Life Performance under
the leadership of G. Bowskill, United Kingdom.

The Sub-Committee has produced this comprehensive review of the components of a

whole life cost methodology as well as the major issues associated with the use of the
technique. Also, an analysis of the responses to a questionnaire about the use of this
concept in various countries is included. I am sure that whole life costing will be
increasingly used in decision-making processes in all countries and I should like to
thank Graham Bowskill and the members of his Sub-Committee for preparing this
report.

The members of the Sub-Committee were:

G Bowskill (UK) Chairman

R Abell (UK)
M Caprez (Switzerland)
F Dascalu (Romania)
S Dorobantu (Romania)
A Garrido (Portugal)
L Gaspar (Hungary)
J Litzka (Austria)
A Marchionna (Italy)
M Mizobuchi (Japan)
A Mrhizou (Morocco)
L Pierce (United States)
I Reeves (Australia)
N Rioux (Canada-Quebec)
H Roos (The Netherlands and EAPA)
S Said (Sweden)
A Stawiarski (Eurobitume)
D Sybilski (Poland)
F Verhee (France)

D. Colwill
Chairman Technical Committee 8

PIARC . 9 . 08.09.B - 2000

1. INTRODUCTION
It is now widely accepted that the evaluation of civil engineering facilities should be
made over the life of each facility rather than consider only the initial costs. The whole
life cost, or life-cycle cost, of an asset is the total cost of operating that asset over its
life, including the initial costs of providing the asset and the costs of using the asset over
its life. These costs may be incurred by the agency responsible for the asset, the people
using the asset and others influenced by the existence of the asset. Figure 1 shows an
example of the interaction between traffic and maintenance works on a busy road. It is
in the management of the infrastructure and taking into account the needs of the road
user and other factors not directly related to the pavement, where whole life costing can
be a very useful tool for the highway manager.

Figure 1. Traffic through a maintenance site in England

Whole life costing, or life cycle costing, has been used for many years in various sectors
of industry (e.g. buildings) and has been defined in a number of ways. Specifically for
roads, Life-Cycle Cost Analysis was defined in the USA, in the Quality Improvement of
the National Highway System NHS Designation Act of 1995, to be:

... a process for evaluating the total economic worth of a usable project segment by
analysing initial costs and discounted future costs, such as maintenance, user,
reconstruction, rehabilitation, restoring and resurfacing costs over the life of the project
segment (a usable project segment is a portion of the highway which could be opened
to traffic independent of some larger overall project).

PIARC . 11 . 08.09.B - 2000

Whole life evaluations are now carried out in many countries for road investment,
primarily for pavements and bridges. Indeed with the continued increase in levels of
traffic, the aim of achieving the minimum whole life cost is included in policies and
maintenance objectives for highway authorities in many countries and is required to
support applications for aid funding. For example, the recent UK Government papers on
Integrated Transport (5) and the Review of the National Road Network (6) propose that
major roads should have a 10 year investment plan. In addition, the Highways Agency,
which manages the Motorway and All Purpose Trunk Road network in England, has
been given the following objective:

"To give priority to the maintenance of trunk roads and bridges with the broad objectives
of minimising whole life cost" (5).

In the same way, the Federal Highways Administration in the United States and the
sponsors of HDM4, the UK Department For International Development, the World Bank,
the Asian Development Bank and the Swedish National Road Administration, have all
seen the need for an up-to-date method for analysing the whole life costs of road
pavements.

The importance of whole life costs, and the wider issues of whole life performance were
identified in the PIARC Strategic Plan and taken up at the Committee meetings in Paris
in 1996. The Flexible Roads Committee (CT8) and the Concrete Roads Committee
(CT7) agreed to form Sub-Committees on Whole Life Performance and Whole Life
Costs respectively.

These Sub-Committees have collaborated during this period and a joint paper has been
published by Bowskill and Huvstig in Routes/Roads (4). The report presented here has
however been produced on behalf of the Flexible Roads Committee alone. A list of
members of the Whole Life Performance, Sub-Committee 3, of Technical Committee
CT8, is provided in Appendix 1.

This report concentrates on aspects of whole life costs of road pavements with other
aspects of whole life performance being considered in the Committee CT8 Activity
Report. This Sub-Committee report also includes the findings from a questionnaire
conducted within the CT8 membership.

There is of course a major role for whole life costing of other parts of the highway as
well as the road pavement. Integrated systems are now being developed which
combine the analyses of these separate features (e.g. pavements, bridges, earthworks)
to allow for the inclusion of interactions and combined maintenance works which
improve the overall cost effectiveness. In the next few years it is expected this area of
development will see a high level of activity but, at this time, this report will concentrate
on road pavements and discuss only briefly the links to the analysis of other parts of the
road. It should be noted, however, that there are many aspects of the approach
adopted for road pavements that clearly apply to other parts of the highway
infrastructure.

PIARC . 13 . 08.09.B - 2000

 Whole life costing can be adopted at various stages in the life of a road. At each point,
the approach is similar but, as different information becomes available, aspects of the
analysis can be undertaken in more detail and allow a fuller understanding of the
impacts of construction and maintenance policies and the savings, and therefore the
benefits, to be gained.

1. Project Inception
For a new road, the cost of constructing the road to last its required life, derived from
average unit costs, can be compared with the benefits to be accrued by the traffic
expected to use the new road. These benefits arise from reductions in journey time,
accident costs and vehicle operating costs that may come from a wider, flatter and
straighter road compared with the existing route.

Detailed techniques have been available for some years to assess the earthworks
quantities associated with different road alignments. These models require considerable
volumes of data to estimate the engineering costs and are used more often when the
horizontal alignment for the route has been set. Few of these models include the user
costs resulting from the alternative alignments. Simplified models of earthworks costs
have been included in the World Banks Highway Design and Maintenance Standards
Model (HDMIII), the recently enhanced version, HDM4 (17, 23), and the Transport
Research Laboratory (UK) Road Transport Investment Model, RTIM (19) and these
allow the user costs associated with the different alignments to be included in a whole
life cost analysis.

This type of analysis allows the merits of alternative new routes to be examined.
Although, at this stage, allowance is made for the maintenance of the road during its
life, analyses do not usually consider the type of pavement or the condition of the road
in detail.

2. Road Design
Once the general route has been decided, there are still detailed options associated
with the design of the road. The alignment of bridges can have a significant impact on
their initial cost as can the horizontal and vertical alignment of the pavement. For many
years computer programs have been available for analysing the earthworks required for
alternative route alignments. Most of these analyses are carried out to enable
contractors to balance the earthworks material movements and do not take into account
the future vehicle operating costs resulting from the alignment of the pavement.
However, in terms of the whole life costs associated with the road, an increase in initial
cost to provide an improved vertical or horizontal alignment may be more than repaid by
reductions in vehicle operating costs and accident costs during the life of the road.

PIARC . 15 . 08.09.B - 2000

 As traffic levels increase, there is often an associated increase in accidents on single
carriageway roads. It is therefore possible that by taking these accident costs into
account at the time of the design, a higher road standard (width, number of
carriageways) can provide better value for money. In practice, this may also be
achieved by the provision of a second carriageway during the life of the road by
reserving land and constructing bridges that can easily accommodate the extra road
width later in the pavement life. The optimum time for widening a road may be very
different if the widening does not involve the purchase of new land and the construction
of new bridges.

The options for pavement type and expected pavement life can be investigated. Many
highway authorities have developed design standards from an analysis of the costs
associated with the future maintenance requirements as well as the expected
performance of the materials in the road (7). In the United Kingdom the choice of a
design life of 40 years, with appropriate strengthening of flexible pavements after about
20 years, was selected on the basis of a simple whole life cost analysis in 1984. The
use of existing standards may, however, still allow the assessment of the costs on a
particular length of road to show the advantages and disadvantages of different design
lives. A long design life may be worthwhile on a heavily trafficked road where any
maintenance will incur high costs from disruption to the traffic. On more lightly trafficked
roads, a thinner design may be possible because the future maintenance has less
impact on the traffic. Alignment plays a further part in the whole life costs of a road
when the bridge clearance requirements are specified. In addition to allowing the free
flow of vehicles along the road from the time of construction, consideration should be
given to the clearance required after any change in height of the pavement surface,
resulting from maintenance during the life of the pavement. Maintenance costs increase
significantly if it is necessary to maintain the clearance height by excavating under a
bridge or raising the height of a bridge.

3. Construction

Equivalent pavement designs using different materials may have different construction
costs and significantly different future maintenance requirements on the same length of
road. These combine to give different whole life costs and an opportunity to examine
these costs to provide a minimum whole life cost even though it may incur a higher
initial cost. For example, recent research (17) has shown that thicker asphalt pavements
can provide a very long structural life, without the need for strengthening, provided
adequate surface maintenance is undertaken. Figure 2 shows there is a minimum
thickness where this behaviour applies (at approximately 80msa in the design chart)
and it may be worthwhile, in terms of whole life cost, to build a new pavement to that
thickness rather than a thinner design which may appear to be sufficient based on
current traffic forecasts but will require more maintenance in future years.

PIARC . 17 . 08.09.B - 2000

 Similarly, there is an opportunity at the time of construction to choose between a flexible
and rigid pavement. This is one of the most frequent uses of whole life costing adopted
in many countries. In some cases, the analysis extends to the choice of type of rigid
pavement (e.g. continuously reinforced or jointed pavement).

500

DBM
400
DBM50
HDM
Th ckness
i 300
of asphal t
layers
(mm) 200

100

0
1 10 100 1000
Design l i e mill
f ( on standar
i axles
d )
DBM - Dense Bitumen Macadam HDM - Heavy Duty Macadam
DBM50 - Dense Bitumen Macadam (50pen binder)
Figure 2. UK Design chart for alternative types of asphalt pavements (7)

4. Maintenance
Maintenance costs are predicted at a general level when examining the route alignment
and the design of the road. A more detailed assessment can be made when comparing
different pavement types at the time of construction but it is only when there is an
existing pavement, with measurements of the current condition of the pavement, that a
fully detailed analysis of the future costs associated with that pavement, can be
undertaken. At this stage, the analysis can take into account the actual performance of
the pavement and allow a comparison of appropriate maintenance options.

Maintenance treatments are designed taking into account the current condition of the
pavement and the expected future performance requirements of the road. However, an
essential part of this is the assessment of the current condition of the pavement and this
may be a major factor in the final whole life cost. If the assessment techniques are slow
and cause disruption to road users (e.g. by lane restrictions), there may be a tendency
for road authorities to reduce the frequency of condition measurements and to limit the
parts of the road surveyed. It is then possible that options for maintenance of the
pavement are missed because deterioration has progressed too far.

PIARC . 19 . 08.09.B - 2000

Traditional approaches to the assessment of pavement condition have been to specify
the frequencies of surveys of the pavement surface and its structural condition but to
limit those surveys to the heaviest trafficked lane. As traffic flows increase, the reaction
to pressure from road users is to reduce the occupation of lanes for maintenance and
condition assessment. There is a corresponding increase in the intervals between
surveys and the survey of more than one lane may be difficult to justify. One way of
contributing to the achievement of minimising whole life costs is therefore to provide
assessment techniques which may be used as frequently as necessary to assess the
condition of the pavement.

With improvements in condition assessment equipment, it is now possible to survey the

condition of the pavement, at traffic speeds, without disrupting road users. Such surveys
may not provide all of the information needed to determine the maintenance options but
they can identify those areas where more detailed surveys are required. This in itself
reduces the disruption to the road users compared with traditional survey regimes. In
addition, the assessment of the condition of more than one lane of the road enables
more appropriate maintenance options to be considered. The report on the work of
COST 325 (8) described the various survey techniques available for assessing the
condition of road pavements. An example of more recent developments is the
introduction of traffic speed surveys to record and interpret the visual condition of
pavements (11).

Good quality information on the condition of the pavement significantly improves the
analysis of the whole life costs of maintenance options by providing a more accurate
representation of the current condition and ensuring relationships developed for the
prediction of future pavement condition are based on actual performance. Many simple
data collection techniques have been developed over many years and the new
sophisticated equipment can be very expensive using up to date electronic components
and processing techniques. Nevertheless, the achievement of reductions in whole life
cost can more than justify the extra costs of the new survey techniques.

As well as selecting the appropriate maintenance treatment to apply to a road

pavement, whole life cost analyses have a role to play in setting maintenance policies.
For example, target intervention levels may be set by safety criteria, but before
deterioration has developed far enough to trigger these safety interventions, there are
options for maintenance of the pavement that will affect the future costs of the
pavement and the cost to users of the road. Network level whole life cost analyses can
be used to set target intervention levels to include in the maintenance policy.
Maintenance options at specific sites are then considered when the overall intervention
levels are broken.

PIARC . 21 . 08.09.B - 2000

If records are kept of the construction cost and of all maintenance work carried out
during the life of a road then a calculation of the whole life cost could be carried out.
However, this information is rarely available and, in any case, will only apply to that
particular road. Construction of the same pavement at a different time or location is
likely to cost a different amount and can be expected to perform differently. It is for this
reason that although, in theory, a detailed structural analysis of a pavement may be
carried out, this does not guarantee an accurate analysis of the same type of pavement
on a different road. Whole life cost analyses therefore generally rely on a more general
approach at the design and construction stages but make much greater use of the
actual achieved performance of the pavement at the time of maintenance.

The work of this sub-committee of CT8 has mainly considered countries with developed
economies, however, the approaches are applicable to all economies. The development
of HDM4 (16) has shown that the approach is also needed in countries with emerging
economies. It may, however, be that the components of whole life cost take on different
importance in different countries.

PIARC . 23 . 08.09.B - 2000

2. WHAT IS WHOLE LIFE
COSTING OF ROADS?

As the traffic carried by road networks throughout the world continues to increase, it is
essential that management of the highway takes a long-term view so that congestion at
roadwork sites only occurs when it cannot be avoided. One of the tools that can assist
the engineer in developing acceptable overall management policies and strategies is
whole life costing. This is not a precise science and the approach will not provide all the
answers for the engineer but it is a tool to help in the comparisons to identify and select
those options giving best value for money. There are several other factors involved in
identifying the most cost effective maintenance solution other than whole life costing but
whole life costing can contribute in a number of ways to the multi-criteria analysis. Not
least of these are the comparison of options for construction and maintenance and the
use of sensitivity analysis, which may form part of an overall risk analysis for each of the
options.

Highway administrations in different countries do not all use the same definition for
whole life costing. For example, some countries include only works costs while other
countries consider different categories of costs to the road user, in addition to the works
costs of construction and maintenance. It is not possible to show all of the definitions
adopted for whole life costing but the description below shows how each of the
components can be included, if required, for a particular analysis.

Costs are incurred during the life of a road by the highway authority responsible for the
road at each stage of its life (design, construction, operation, maintenance,
replacement), by the road users and by other members of the public who are affected
by the road (e.g. local residents). Although these costs are incurred over the whole life
of the road, in practice, the whole life cannot be considered and a long analysis period
is used to represent the full life of the road. In current whole life cost analyses, only a
sub-set of all of the costs is considered, depending on the information available.
However, it is generally agreed that for a length of road, the whole life costs fall into the
three categories shown in the pie chart in Figure 3. The charts represent the costs of a
heavily trafficked road in England over a period of 30 years. Figure 3(a) represents the
costs during an analysis period which includes the pavement construction, while Figures
3(b) and 3(c) represent the costs for the same pavement during an analysis period
which commences immediately after construction and the components of future cost
can be seen more clearly.

PIARC . 25 . 08.09.B - 2000

 (a) New pavements

Construction cost

Future works
costs
User costs

(b) Future works costs after (c) Future user cots after construction
construction

Traffic
management
Traffic delays
Strengthening
treatments Accidents
Surfacing
treatments

Figure 3 - Whole life costs of road pavements

The three components of whole life cost represent the construction of the pavement, all
aspects of maintenance works carried out on the pavement and the social costs that are
incurred during the life of the pavement. The social costs are often referred to as user
costs but which may also relate to people other than road users. The construction and
maintenance works costs may be referred to as direct costs to the highway authority
whereas the other costs are indirect. Some organisations and whole life costing
systems consider these types of costs differently.

On heavily trafficked paved roads, the user costs include mainly the delays to road
users at roadworks with a small proportion made up of the costs of the extra accidents
that occur at roadworks.

Whole life costing applies equally to unpaved and paved roads. For unpaved roads the
principal considerations are material loss and roughness of the pavement surface,
which lead to high user costs due to increased vehicle operating costs. In the pie charts
in Figure 3 the user costs for unpaved roads would be represented by vehicle operating
costs.

A glossary of terms used in whole life costing is provided in Appendix 2.

PIARC . 27 . 08.09.B - 2000

2.1 Components of Whole Life Cost

2.1.1 Costs - Highway Authority

The highway authority is generally a government organisation although historically,
private companies have acted in this role. Increasingly in recent years, private
companies are again becoming responsible for the costs of construction and
maintenance work during the life of the pavement. The life cycle of a road commences
with planning and design and the costs for this are borne by the highway authority. In
identifying the alignment and type (i.e. width) of road, an analysis of the various options
can be made, comparing estimated construction and maintenance costs with expected
costs to the road users over the life of the road.

After selection of the route of the road, the detailed design leads to construction
alternatives using different pavement types. Analysis of the predicted future
maintenance costs for each pavement type may then be used to select the construction
type which is expected to provide the lowest whole life cost. The predicted maintenance
profiles in Figure 4 show the cost, time of maintenance and type of maintenance for the
same road and over the same time period, but with asphalt and jointed concrete
pavement types.

It is important to note that whole life costing is not limited to applications for new roads.
The life cycle analysis may be assumed to start at any time during the life of the road
and used to identify the consequences of alternative maintenance options for the
existing road. During the life of the road, maintenance work is carried out both on a
routine basis and to restore different specific aspects of condition. For non-routine
maintenance, selection of the type of treatment has, for many years, been made with
the aid of a management system. Traditional approaches in these systems are based
on treating those roads in the worst condition first. More modern systems adopt
economic approaches that involve the prediction of the future performance of the
pavement, with and without maintenance, and the use of measures of the economic
attractiveness of each of the maintenance options. In the United Kingdom, the UKPMS
pavement management system (22) and the HAPMS pavement management system
for trunk roads (13) both use the benefit-cost ratio techniques, similar to that used in
HDM4 (16), to prioritise maintenance work on a whole life cost basis.

For the selected maintenance treatment, the total cost of the work includes the costs of
preparing the road for the main treatment (e.g. preparatory pavement patching), the
costs of the main work and finally the costs of any work required before the road can be
re-opened to traffic (e.g. work on safety fences). Included in these costs are also the
costs of the traffic management measures to allow the traffic to continue to use the road
while the maintenance works are being undertaken. On heavily trafficked roads, the
costs of the traffic management make a very significant contribution to the total cost and
may, on occasions, exceed the costs of the maintenance work, as shown in Figure 4.

PIARC . 29 . 08.09.B - 2000

 Cost (a) Asphalt pavement (a) Asphalt pavement

Cost
User cost
Works cost

C R O R
C R O R
Undiscounted costs
Discounted costs

(b) Jointed concrete pavement

(b) Jointed concrete pavement

Cost
User cost
Cost

Works cost

C S T/S S F/S S
C S T/S S F/S S
Discounted costs
Undiscounted costs

C: Construction S: Joint seal

R: Resurfacing T: Thin bonded surface repairs
O: Overlay F: Full depth repairs

Figure 4. Potential maintenance treatments during the life of a road pavement

The component of the total cost that arises from construction is usually the most
accurately estimated of all the components. However, care is needed to ensure that
inappropriate unit costs of construction or maintenance do not favour a particular
solution. For example, use of a low cost for the maintenance of a pavement surface
may lead to an under-estimation of the future cost of that pavement type.

2.1.2 Costs - Road User

Costs incurred by road users in normal use of the road include the time costs, which
vary with speed and with condition of the road pavement. Time costs are derived from
the change in journey time and the average value of time for each vehicle type, taking
into account the variation in journey time with traffic flow during the day. Lower time
costs are incurred at night when the traffic flow is lighter. When maintenance works are
being carried out, the calculated time costs vary not only with traffic volume but also
with the disruption caused by maintenance work on the road. Calculation of the effect of
the maintenance on road users adopts the same approach of change in journey time
along the road.

PIARC . 31 . 08.09.B - 2000

 Vehicle operating costs for each vehicle type (e.g. cars and heavy goods vehicles), vary
with vehicle speed and are generally assumed to comprise the costs of fuel, tyres,
spare parts, vehicle maintenance, depreciation, oil and other lubricants. Where
appropriate, crew costs are also included. Allowance is not often made for the costs of
delays to the delivery of goods in the vehicles (e.g. long delays may reduce the value of
some cargo). It is, however, necessary to make allowance in the analysis, for the part of
these costs which is tax because this is returned to the Government. Extensive studies
are needed to develop relationships that can be used to predict vehicle operating costs.

The maintenance policy adopted for a road determines the level of condition and the
maintenance carried out during the life of the road. In whole life cost analyses of
construction and maintenance options it is generally only the changes in road user costs
associated with the maintenance policy which are considered because all options can
be assumed to have the same costs associated with normal use of the road. As traffic
levels increase, the costs of normal use, which include the costs of network congestion,
become much larger than any of the costs associated with pavement condition and
maintenance works.

Changes in user costs result from increased time costs, due to delays to traffic at the
time of maintenance, and changes in vehicle operating costs due to different levels of
condition during the life of the pavement. If higher levels of condition are achieved
during the life of the pavement by increased maintenance, although there may be
increased delays to traffic during the maintenance works, lower vehicle operating costs
due to the better pavement condition can be expected. This is one of the trade-off
analyses that may form part of the examination of whole life costs.

For levels of condition currently found on the major roads in Europe, North America and
Australia, the effect on vehicle operating costs due to the change in pavement condition
is small compared with the total costs associated with carrying out road maintenance
work.

For minor roads in developed countries, traffic levels are lower and delays may also be
lower, but the levels of condition then mean that user costs from increased vehicle
operating costs should be taken into account.

2.1.3 Costs - Road Accidents

Accidents between vehicles occur on the road network for a wide variety of reasons
such as road alignment, geometry, pavement condition and maintenance activities. It is
difficult to estimate the costs of accidents as the occurrence and severity are very site
specific. For whole life cost analyses, however, it is necessary to consider only the
expected changes which result from the pavement condition and maintenance activities.

PIARC . 33 . 08.09.B - 2000

 Where the maintenance policy allows for lower levels of condition, then it is necessary
to estimate the cost arising from the increase in the number of accidents that will occur
with the deteriorating condition. Similarly, more accidents occur while maintenance work
is being carried out on the road, therefore a policy requiring more maintenance is likely
to result in more accidents at the roadworks sites.

The accident rate at roadworks varies with the traffic management arrangements
adopted during the period of maintenance. Therefore, the choice of maintenance
options must also include the identification of lanes remaining open to traffic during the
periods of maintenance work. In England, it has been established that the accident rate
can increase by more than a factor of 2 during road maintenance, even when adopting
sophisticated traffic management arrangements (14). Another study in Germany, (18),
has shown that the accident rate on motorways may increase by up to a factor of 12
when the maintenance work requires contra-flow traffic management at the
maintenance site.

2.1.4 Other Social Costs

It is clear that together with the costs to the road user and the costs of road accidents,
the other costs (e.g. associated with the environment) are the most difficult components
to include in a whole life cost analysis. It is important, however, that these other costs
are considered so that the consequences of alternative policies can be examined.

Environmental costs of traffic have been examined for many years and form a
significant component of the total costs associated with the life of a road. In whole life
cost analyses of alternative road pavement options, it is again necessary to consider
only the environmental costs that change between the options. For example, if the level
of winter maintenance is the same in two options, the environmental cost of the de-icing
chemical is the same and need not be included.

If, however, costs do change for the options, then these differences should be included.
For example, if one pavement type results in a higher traffic noise level than another,
then the increase in cost resulting from that higher noise, by the provision of noise
reduction measures (e.g. noise barriers), must be included. This type of analysis is not
currently included in many of the approaches adopted for roads in the countries
represented in the Sub-Committee. However, the use of special pavement surfaces
which reduce the traffic noise (e.g. porous asphalt) can be examined using the whole
life cost to compare any increase in the cost of provision and reduced life, with the
benefits of reduced noise during the life of the road.

In recent years, however, alternative ways of carrying out whole life analyses of roads
have been developed to take other environmental considerations into account. For
example, the energy necessary for the construction and maintenance work has been
used to compare options and the amount of scarce aggregates has been included in
comparisons of maintenance options rather than relying on a cost analysis alone.

PIARC . 35 . 08.09.B - 2000

2.2 Whole Life Costs
for all Classes of Road

The impacts of the different components of whole life cost vary with the type of road and
the importance of the various components of whole life cost may also be different. For
example, for a road in a country with a less developed economy, the vehicle operating
costs may take a much larger proportion of the total cost, whereas for a heavily
trafficked motorway in a developed economy, the delays at maintenance works sites are
likely to be the larger part of the total cost.

In countries with less developed economies, the levels of pavement condition are
generally lower. Fuel costs and other vehicle costs are relatively high and the vehicle
operating costs are therefore large. The value of peoples time is, however, relatively
low and, even though many vehicles may still be delayed by roadworks, the cost of the
delays is low.

For countries with developed economies, traffic volumes on the principal roads are
generally larger and the value of peoples time is also much higher. The costs of delays
are also, therefore, correspondingly high. In these countries, on lower hierarchies of the
road network, there are fewer vehicles and the condition achieved through maintenance
policies is lower than on the principal roads carrying most of the traffic. However, the
pavement condition is such that the vehicle operating costs do not become large, due to
the small number of vehicles, and, hence, the delay costs are also small. The overall
effect on the lower road hierarchies is for user costs generally, to become small rather
than for vehicle operating costs to become an important component, as in less
developed economies.

Similarly, there is a much stronger need for a government highway authority to consider
the impact of costs incurred by the road user than there is for private road operators to
do so. Although private operators generally try to take disruption to users into account, it
is often more important to assure user-satisfaction, therefore, costs derived from
average values of time are not appropriate. For private operators, the duration of
maintenance works may have other important impacts.

Operating concessions for roads often include some charges to the road operator for
non-availability of the road to users. For example, a minimum number of hours for the
whole road to be open to traffic in a year may be required to avoid a penalty charge by
the overseeing highway authority. The criteria are likely to be more complicated than
this with the availability specified for different parts of the day and different levels of
charge made for closures at different times (e.g. the charge for night closures would be
less than the charge for closure during the peak hours).

PIARC . 37 . 08.09.B - 2000

 For these road operators, a whole life cost analysis is still required but the components
of cost to be minimised may be slightly different. The combination of maintenance
treatments giving the best solution for a private road operator on a given road may,
therefore, be different to the solution when the road is government managed.

2.3 Pavement Condition

2.3.1 Maintenance Requirements

A fundamental part of a whole life cost analysis is the identification of future
maintenance treatments. Generally, in a model, this may be achieved by:

(i) fixed timings of maintenance treatments for each pavement type,

(ii) user specified timing of the treatments during the analysis period,

(iii) timing of maintenance determined by the age of treatments,

(iv) deterioration modelled according to various factors such as material type, traffic
carried, climate and age, using predetermined relationships,

(v) deterioration predicted based on the past performance of each road length.

Fixed timings for each pavement type are usually adopted for new pavements to allow
predefined comparisons to be undertaken on specific road lengths. Local works costs
and user costs, appropriate to the levels of traffic, can be used to determine, from the
approved pavement types, that pavement type giving the best value for money. As the
prime use of whole life costing is with new roads, this is the most common method
currently in use for determining the timings of maintenance treatments in whole life cost
models.

The advantage of user specified timings is that local knowledge can easily be
incorporated into the predictions of maintenance. However, the disadvantage is that it
is more difficult to extrapolate the experience of the user to conditions not yet observed
and assess the implications for the future maintenance of the pavement. This can be a
problem where new designs, materials or conditions are experienced.

Rather than predetermined, or user specified, timings of treatments some systems use
treatment lives to indicate the need for further maintenance. This introduces the facility
to examine interactions between treatments that are adjacent in time and/or location, to
create a practical maintenance intervention.

PIARC . 39 . 08.09.B - 2000

Many highway administrations and research establishments have deterioration
relationships developed from laboratory tests and studies of in-service pavements
appropriate for the pavements in their country. These may often reflect the pavement
type, traffic carried, climate and alignment of the road to produce estimates of average
rates of deterioration. The relationships are often based on regressions of many factors
and may be very complex functions. Where these relationships have been developed
under different conditions, (e.g. climate and material type) it may be necessary to
calibrate the relationships for the particular conditions rather than use the general
deterioration relationship. This approach has been adopted for HDM4 (16).

In practice, the deterioration of road pavements is very variable and the condition of the
same type of pavement may deteriorate differently under changing circumstances. It is
possible to derive deterioration relationships based on the historic performance of a
length of road pavement and create a condition projection curve, which is directly suited
to each length. This approach has been used for whole life cost models and pavement
management systems in many parts of the world, for predicting the future condition of
each length of pavement in a network.

The process works by specifying a general curve for each pavement type and any other
parameter considered important for predicting the way that pavements deteriorate. An
example of these may be urban and rural environments. Actual condition
measurements are then considered with the general curve and the curve is moved by
shifting and stretching it along the x-axis and, if necessary, rotating it around the y-axis
until the minimum least-squares fit is achieved for the existing condition measurements.
If the existing measurements have been taken over a long period of time it may be
worthwhile age-weighting the fit of the measurements to the curve with the most recent
measurements having more importance. The best-fit curve then becomes the condition
projection curve for that analysis until more condition data enable the curve to be further
refined. Figure 5 shows an example of how existing data may enable the original
general linear relationship to be refined with three existing (one current and two historic)
measurement values.

Original
Condition
relationship

Shifted Stretched
relationship
relationship

Projected condition

Current condition

Historic condition

Time
Figure 5. Example of a condition projection curve fitting technique

PIARC . 41 . 08.09.B - 2000

 Two adjacent pavements of notionally the same construction and carrying the same
traffic may perform differently. One important possible cause of this variation is the
quality of the construction or maintenance work. Standards and specifications aim to
reduce the variability in the achieved performance and allow standard deterioration
relationships to be used to describe the performance of the pavement. In practice, there
remains sufficient variability to make worthwhile the use of condition prediction
relationships that take into account the actual achieved performance of a pavement
rather than simply the expected performance.

An examination of the whole life costs of road pavements, which includes a prediction of
the maintenance requirements based on the traffic carried by the pavement, requires
the condition of the pavement to be expressed in terms that can be related to the traffic
carried. Some aspects of pavement condition not vary with traffic carried and the
maintenance required to restore those parts of the pavement condition must be
represented on a regular time basis (e.g. joint seals on concrete pavements). Some
whole life cost models may therefore include deterioration relationships that are
dependent on both time and traffic.

2.3.2 Aspects of Pavement Condition

In addition to the need to identify maintenance treatments, pavement condition may also
be used to estimate some of the components of costs to the road user and to society.
As pavement condition deteriorates, in general, the vehicle operating costs and the
frequency of accidents increase. Predictions of pavement condition are required to
estimate these increased costs throughout the analysis period.

Aspects of condition to be considered can be described in three groups.

Structural Condition
This is usually expressed by pavement deflection although visual condition
assessments may be used to support the interpretation of deflection measurements.
Maintenance of structural condition is by a variety of strengthening treatments (e.g.
bituminous overlay), depending on pavement type, or by reconstruction.

Surface Condition
This aspect of condition has no impact on the strength of the pavement and can be
maintained by relatively low cost, treatments to the pavement surface (e.g. thin
surfacing or resurfacing). Surface skid resistance and rutting form two of the measures
of surface condition. Skid resistance can be used in the calculation of accident costs as
well as for identifying the need for future maintenance treatments. In severe cases,
excessive rutting can also contribute to an increase in the number of accidents

PIARC . 43 . 08.09.B - 2000

There is insufficient information for measurements of surface texture to be used to
identify the need for maintenance but this aspect of condition may be used to estimate
the noise created by traffic running on the pavement.

For unpaved roads, rutting is a major defect but may be easily corrected by re-grading.

Evenness
Evenness, sometimes referred to as roughness or ride, is not always directly related to
the determination of maintenance work but can be derived from a range of
measurements of condition or measured directly and used to calculate vehicle operating
costs. Various methods are available for measuring the evenness of the pavement
surface in many countries but it is the International Roughness Index (IRI) which is
generally used in relationships to estimate vehicle operating costs. IRI plays a major
role in the determination of costs in HDM4 (16) and many other whole life costing
systems. Indeed, for unpaved roads, roughness is often the only defect considered
because it has such a large effect on vehicle operating costs.

It is important in whole life cost models to consider the interaction between measures of
condition and the maintenance treatments. Pavement condition may identify the need
for maintenance but not all aspects of condition may be restored by the maintenance
treatment applied. Figure 6 shows the effect of maintenance treatments on three
measures of condition on a flexible pavement.

In the example in Figure 6, there is a need for the first maintenance treatment
(10 years) to restore skidding resistance but the surface dressing has no effect on the
pavement rutting or pavement strength. If the skid resistance had been restored with a
resurfacing, then both the rutting and skid resistance would also be restored. In this
example, this occurred when the depth of rutting required resurfacing treatment in years
15 and 33. Note that the full life had not been achieved from the surface dressing
carried out in year 10 but replaced in year 15. In year 33, the increase in the rate of
rutting, as traffic increased meant the skid resistance and the rut depth required
treatment at the same time. When the pavement was in need of strengthening, the
overlay restored all three measures of condition (deflection, rutting, and skid
resistance), even though the surface condition was not yet in need of maintenance. For
the maintenance treatments, typical works costs and user costs are shown for the
40 years analysis period.

Whole life costing helps the understanding and management of the interaction between
condition of the pavement and the maintenance treatments applied. These are the
decisions that road network managers face regularly and whole life costing helps
formalise and expand the scope of their decision making process.

Where deterioration models are based on past performance it is difficult to include new
materials and new pavement wear effects (e.g. super-single tyres) until extensive
studies have been carried out. This can reduce the effectiveness of whole life costing
systems in predicting the future costs associated with the road pavement.

PIARC . 45 . 08.09.B - 2000

 (a) Pavement deflection

0 5 10 15 20 25 30 35 40

(b) Rutting

0 5 10 15 20 25 30 35 40

(c) Skidding resistance

0 5 10 15 20 25 30 35 40

(d) Maintenance costs (undiscounted)

R R
S
0 5 10 15 20 25 30 35 40

Time (years)
Maintenance works costs User costs
S: Surface dressing R: Resurfacing O: Overlay

Figure 6. Interaction between condition and maintenance for an asphalt pavement (1)

2.3.3 Pavement Type

Whole life costing can be applied to all pavement types. Indeed the technique is often
used to assess the difference between types as well as the construction and
maintenance options within a pavement type.

Each pavement type is characterised by the defects in condition, the modes of

deterioration, the types of possible maintenance treatments and the costs and method
of applying those treatments. Table 1 contains examples of maintenance treatments
applied to each pavement type. A key aspect of unpaved road is the identification of the
time to upgrade the road to a paved surface and whole life costing is an essential tool
for that analysis.

PIARC . 47 . 08.09.B - 2000

 Table 1. Examples of the principal maintenance treatments for each pavement type
Asphalt Concrete Unsealed

Patching Joint seal Patching (spot repairs)

Surface dressing Joint repairs Re-profiling
Thin surfacing Thin surface patching Addition of material

Resurfacing Upgrade to a sealed surface

Retexture
Overlay
Full depth repairs
Reconstruction
Overlay (*)

Reconstruction
(*) - After bituminous overlay, asphalt pavement maintenance treatments may be used.

Routine maintenance (e.g. local patching, crack sealing and road markings) is required
on all pavement types. Also, other maintenance (e.g. drainage) may have an effect on
pavement performance but is not directly a pavement treatment. This maintenance is
therefore not often included in pavement whole life costs but should be seen as an
essential activity if pavements are to achieve their optimum performance.

The essential economic differences between the pavement types are in the costs of
construction and maintenance treatments. Concrete is traditionally, initially more
expensive but may offer lower maintenance costs during the pavement life as the
structural design life is longer. Recent developments in asphalt pavement design have
enabled the longer structural design lives (40 years) often adopted for concrete
pavements, to also be used on asphalt pavements. Shorter (20 years) life pavements
are still predominantly asphalt. All pavement types still require maintenance to the
pavement surface during the structural design life.

There have been many studies into the comparison between asphalt and concrete
pavements with aims to look at many factors (e.g. costs, achieved life, energy
consumed). For example, Schmuck and Ressel (25) examined the achieved lives of
asphalt and concrete pavements on roads in Germany. From all of the studies,
however, it is clear that whole life cost analyses can help assess the value of
differences when alternative pavement types can be used to provide the required
pavement life.

The maintenance of concrete pavements has, in the past, also taken longer, due to the
concrete curing time of sometimes 15 days. When road user delay costs are
considered, this longer duration may have a significant effect on the delay costs at the
time of maintenance and therefore the selection of pavement type. Recent
developments have, however, enabled the curing times to be reduced substantially and
there is consequently much less disruption to road users at the time of maintenance
work.

PIARC . 49 . 08.09.B - 2000

2.3.4 Traffic
An essential component in the forecast of all whole life costs of road pavements is the
traffic carried by the road pavement. Traffic flows are normally specified by the average
total daily flow but this must be converted in a number of ways for use in whole life cost
models. Traffic data are used in two ways in these analyses. Firstly for the effect of
wear on the pavement in deterioration relationships for the pavement type and secondly
in the costs of the delays to traffic at the time of maintenance.

For the effect of wear, the heavy goods vehicle is the principal component of traffic and
must be extracted from the total flow value. In sophisticated models, these vehicles may
be split further into rigid and articulated vehicles and by number of axles per vehicle.
Recent developments in vehicle suspensions and tyre arrangements can have a
significant effect on the wear on the pavement. To isolate all of the different vehicle
types in the total flow may be possible in the future but few models yet contain more
than 4 heavy vehicle categories.

Although some pavement wear (e.g. reduction in skid resistance) is related to the flow
of heavy vehicles, the flow is generally converted to the number of equivalent standard
axles per vehicle and these are aggregated over the days and years in the analysis
period. On multi-lane carriageways, the total heavy vehicle flow is distributed across
more than one lane and, to avoid overestimating the wear, this distribution must be
reflected in the analysis. The whole life costs are usually calculated for the carriageway
based on the performance of the most heavily trafficked (by heavy vehicles) lane. For
the use of whole life costing in pavement management systems, the costs of
maintenance in each lane may be examined.

To predict the future performance of the pavement it is necessary to forecast the

increase in traffic flow during the analysis period. Traffic growth rates may be specific to
the roads to be analysed or national rates may be used. For example in the UK, the
National Road Traffic Forecasts are produced for a range of assumptions giving the
impact of high and low economic growth. The flow growth factors are given for each
year for each of 4 vehicle types (cars, light vans, rigid heavy goods vehicles and
articulated heavy goods vehicles). The growth rates are further divided into rural/urban
roads and road type (Motorways, national Trunk Roads with local dual carriageways
and other single carriageways).

For the calculation of the costs of user delays it is necessary to consider the time of the
year and the time of day for the maintenance work. There is a significant variation in
traffic flow with season of the year with higher flows during the periods of better
weather. Maintenance is often carried out during these periods of heavy flow to
maximise the likelihood of optimum conditions for the work.

PIARC . 51 . 08.09.B - 2000

 The delays to traffic caused by reduced lane availability are not directly proportional to
flow or the number of lanes available. There are options for working arrangements and
traffic management, at the time of maintenance, to reduce the disruption to the road
user. On heavily trafficked roads, there has been a substantial increase in the amount of
maintenance carried out between the morning and evening peak flow periods or at
night. These changes may mean longer work durations (numbers of days) and higher
costs, but these disbenefits are outweighed by the reduction in the total traffic delay cost
for the maintenance treatment. Additionally, incentive contracts linked to the duration of
work have reduced the time required for maintenance activities and hence traffic
management.

2.4 Project and Network Level

2.4.1 Whole Life Costing Systems

In the past, project level analyses have been carried out using whole life costs while
network level analyses have been based on pavement condition. With the development
of pavement management systems network level analyses are now including an
economic approach and the distinction between the approaches at the project level and
network level is much less clear.

Each whole life cost system is different and may range in complexity from a simple
analysis package, based on computer spreadsheets, to sophisticated systems with
software written specifically for the system. Similarly the model may represent a single
length of road or a complete road network. The calculations needed within any whole
life cost system are such that manual systems are likely to be of limited use within a
road management department. However, the overall approach for all of these types of
systems is the same. Figure 7 shows a simple view of how the approach may be
applied.

The aim of all systems is to represent the future life of the road and predict the costs for
the analysis period. For a new road this period starts with construction of the pavement
but for existing pavements the period may start at any time. After initial construction, at
various times during the life of the pavement, maintenance is carried out. The cost of
construction and each maintenance operation has associated costs to the road user
and society. Other costs (e.g. routine maintenance and vehicle operating costs) are
incurred in each year whether or not there is a specific maintenance intervention.

PIARC . 53 . 08.09.B - 2000

 Input data

Determine traffic
and condition for
the year

Yes
Accumulate Maintenance
cost for the needed ?
year

Maintenance strategy
No

No Last year of
Next year in
analysis period analysis
period?

Yes

Residual value

Outputs

Figure 7. Whole life cost model flowchart

2.4.2 Discount Rate and Analysis Period
Alternative construction and maintenance policies will lead to different timings of the
maintenance interventions during the analysis period. In comparing costs that occur at
different times, it is not appropriate to simply compare the total costs over the period.

To allow fair comparisons to be made, all costs over the analysis period are discounted
back to a common point in time, usually, but not necessarily, the start of the analysis
period. The choice of annual discount rate used for the future costs is generally set by
the funding organisation to apply for all transport assessments. Alternatively, special
rates may be applied for individual projects when particular financing arrangements
have been made. This is more common for the privately financed road concessions that
have been introduced more widely in recent years. In all cases, the discount rate may
change and there is a role for whole life cost models to examine the sensitivity of the
whole life costs of the different options, to changes in discount rate.
PIARC . 55 . 08.09.B - 2000
Where unit costs used to calculate the total cost of each maintenance intervention
within the analysis period are all at a common price base (i.e. exclude inflation), it is
appropriate that the discount rate used to reduce future costs to a common price base,
should also not include any element for inflation. If unit costs include inflation, the
discount rate must also include an element for inflation. It is however, more
straightforward to omit inflation from both considerations as discount rates are normally
quoted excluding inflation. It also avoids the difficulty of inflation rates varying with time,
and different rates applying to different costs, while only an average inflation allowance
could be included in a discount rate specified as including inflation. In the developed
economies of European countries and North America, the use of discount rates
between 4 and 8 per cent is typical. Higher rates may be used for private road
operators where funding is direct from private banks. The sum of discounted costs over
a specified period is known as the Net Present Cost. Similarly, if benefits are available
and discounted over the same period, the difference between the discounted benefits
and discounted costs is known as the Net Present Value.

The whole life cost is represented by the total of the costs that occur during the analysis
period (i.e. the Net Present Cost of the works costs and costs to the road user and
society). The lowest whole life cost is the lowest Net Present Cost. When benefits, or
savings, are part of the analysis, other methods are available to use with the discounted
costs to select the best option. For example, rather than use a fixed discount rate, the
rate which makes the Net Present Value equal to zero, known as the Internal Rate of
Return, may be used and the higher this rate, the better. The Internal Rate of Return
needs to be greater than the discount rate for the investment to be worthwhile. This
approach is used in many whole life cost systems throughout the world as it avoids
difficulties caused by comparing whole life costs derived using different discount rates.

Another method for assessing the whole life cost is to use the Annualised Equivalent
Cost (also referred to as the Equivalent Uniform Annual Costs). This represents an
annual value of the Net Present Cost or Net Present Value and is sometimes used
when comparisons are made over different analysis periods (e.g. the analysis period
may be different for each option and could be equal to the pavement design life) and the
salvage value, at the end of the analysis period, has not been calculated. This
technique is also more applicable when a regular annual payment is made for an asset
(e.g. a building) rather than the procurement of roads.

Simple investment analyses may be based on the Pay Back Period in which the time
needed for achieved savings to exceed the initial cost is determined. This may be with
or without consideration of discounting future costs. This period does provide a measure
of risk, in that, the longer the period, the higher the risk of recovering the initial cost.
There is no measure of return from this method and it is not often used in whole life cost
analysis.

PIARC . 57 . 08.09.B - 2000

 It is essential in any system that the period representing the life of the road is long
enough that sufficient principal maintenance interventions are included. In practice, with
20 years and 40 years design lives for the pavement, the analysis period for whole life
costing evaluations should be no shorter than 30 years. To avoid difficulties with
comparing costs incurred in the analysis period, it is recommended that the analysis
period should include at least one principal maintenance treatment.

The longer the analysis period, the greater the uncertainty in the prediction of the future
performance and use of the pavement. In all long-term predictions, the sensitivity of the
forecast to changes towards the end of the analysis period should be examined. This is
true in the calculation of whole life costs and has led to the use of probabilistic
approaches to the analysis rather than the traditional deterministic methods. An
alternative approach, adopted in some countries, is to limit the analysis period to
20 years.

2.4.3 Salvage Value

Even with a long analysis period, the cost of a major maintenance intervention just after
the end of the analysis period may be a significant proportion of the whole life cost
calculated over the analysis period. Comparisons are often required between alternative
policies to be applied over the analysis period. If these will affect the timing of
maintenance works, it is essential that the salvage value of the pavement at the end of
the analysis period is included in the calculation. The salvage value represents the
value, in terms of each aspect of condition, of the pavement. A pavement in need of
maintenance will have a lower salvage value than a pavement recently maintained.
Various methods are used for calculating the salvage, or residual, value of the
pavement.

At any time during the life of the pavement, the structure has a value, known as the
salvage or residual value. At the minimum, this value represents the potential use of the
material in the road for re-cycling into new material to be used in new construction or
maintenance works. In practice, unless the material is in very poor condition, the
pavement has a higher value than this because there is a capability to continue to
support the traffic carried by the pavement. In any year, the decrease in salvage value
relates to the traffic carried by the pavement and the age of the pavement. In practice,
in whole life cost models, the variation is usually represented by time rather than by
traffic. Similarly, the variation is often considered as linear although a curve, with little
change in the early years and a faster decrease towards the end of the life, may be a
more realistic representation.

PIARC . 59 . 08.09.B - 2000

This could be represented as shown in Figure 8. Initially, the pavement has a value
equivalent to the construction cost of the pavement (other road features are not
included). As the pavement deteriorates the value decreases until the pavement is
strengthened. Before strengthening, the value does not decrease to zero because even
with reconstruction, the pavement foundation and sub-base each have a value that may
be considered as a fixed cost for the pavement. If a pavement is strengthened by
adding an overlay, this will occur before the time of reconstruction. Figure 8(a) shows
the increase in the value of the pavement by overlaying. It also shows the timing of a
reconstruction if the overlay is not used. Note that both types of structural maintenance
may increase the value to above that at the time of initial construction because the
pavement is stronger than at the time of construction.

Reconstruction
Salvage Overlay

Value

Fixed cost

10 20 40 30 50
Time (years)
(a) Based on structural condition only

Surface treatments Overlay

Salvage

Value

Fixed cost

10 20 30 40 50
Time (years)
(b) Based on structural and surface condition

Figure 8. Salvage value of a road pavement.

PIARC . 61 . 08.09.B - 2000

 In addition to the structural condition of the pavement, the surface condition can also be
considered to contribute to the salvage value of the pavement. Renewal of the surface
does not restore the strength of the pavement so the value remains below the initial
value of the pavement. Figure 8(b) shows an example of the effect of surfacing
treatments on the salvage value.

2.4.4 Models used in Analysis

Whole life cost models have been developed in a variety of countries. In the UK,
COMPARE was developed by the Transport Research Laboratory under sponsorship
from the Highways Agency for the analysis, of new pavement alternatives at the project
level although it can also be used for simplified analyses of existing pavements. Further
details about COMPARE are provided by Bowskill and Abell (3) and Abell (1).

In the USA, the Federal Highway Administration (10) has developed a methodology for
the Life-Cycle Cost Analysis in Pavement Design. This contains a detailed description of
the approach to adopt for investigating pavement design alternatives on a whole life
cost basis including works costs, the time delay costs incurred by road users and the
costs of road accidents. Details are also provided on the uses of deterministic and
probabilistic analyses.

The Swedish model is also designed for project level analyses, to run on a Personal
Computer and can be used to examine different pavement types and alternative
pavement surface layers. More details of this model are provided by Huvstig (15).

The World Bank Highway Design and Maintenance Standards Model, HDMIII (20) and
the TRL Road Transport Investment Model, RTIM (19) were two of the earliest models
developed for the analysis of road projects in countries with less developed economies.
Under funding provided by the UK Department For International Development, the
Asian Development Bank and the Swedish National Road Administration, with further
support from the World Bank, HDMIII has been upgraded to HDM4. As part of this
upgrade, the scope of the HDM III model has been increased to include concrete roads,
frost susceptible formations and traffic congestion effects. The HDMIII models for
bituminous and unpaved roads are, of course, still available. The model contains a high
level of detailed relationships for vehicle operating costs which, with pavement
maintenance activities, can be used to examine the effects of no maintenance work.

In Austria, a specification exists for a computer program using a spreadsheet for

analysis. This has been prepared by the Roads Section of the Federal Ministry and
includes the construction and maintenance works costs attributed to the Road
Administration and the time, vehicle operating and accident costs incurred by road
users.

PIARC . 63 . 08.09.B - 2000

2.4.5 Components of Whole Life Cost Models
Some components of whole life cost systems may be further developed than others.
However there is a common set of features, which can be used to consider all models.

Data Input
For the calculation of whole life costs of any road pavement, there is a significant
amount of information to be input, as shown in Figure 9 (e.g. traffic, intervention levels,
unit works costs, rates of working, value of time, value of accidents, maintenance works
times, traffic management). It is therefore essential that a simple, well structured data
input facility is available. With many parameters, to avoid long repetitive data entry
procedures, many systems operate on the basis of over-writing default values.
Examples of the inputs in each area are:

Road type: Number of lanes, pavement type, urban/rural environment

Traffic forecast: Initial flow, composition of flow, growth rates

Maintenance policy: Intervention levels, maintenance treatments, closure times

Economic parameters: Discount rate, analysis period, values of time and accidents

Works data: Unit costs, rates of working

Pavement condition: For existing pavements, the current values of defects

Road Type

Pavement Traffic
Condition Forecast

Inputs

Works Maintenance
Data Policy

Economic
Parameters

Figure 9. Whole life cost model inputs

PIARC . 65 . 08.09.B - 2000

Traffic
A major component of any whole life cost analysis is the forecast of traffic to be carried
by the pavement during the analysis period. This may be predicted from an initial flow,
expressed in terms of different vehicle types at the start of the period. Traffic flow is
used in the calculation of user costs and equivalent standard axle loads, for the
prediction of wear on the pavement. Traffic flow variations throughout the year and
throughout the day may be used in the calculations.

Condition prediction
A module for the prediction of condition of the pavement is required for each aspect of
deterioration or defect. These may be by a generalised model for the road and pavement
type or a model specially calibrated for each individual length of road using historic
condition measurements. In simpler systems, condition may be represented only by the
age of the current maintenance treatments or the user may specify the timings of the
maintenance interventions. This is one area currently receiving a great deal of attention
with the further development of deterioration relationships that can be used in whole life
cost models. For example, new relationships have been developed as part of the PARIS
project carried out under the 4th Framework established by the European Commission (9).

Maintenance identification:
Rules are required to transform the predicted condition of the pavement into the type of
maintenance needed. Where more than one aspect of condition is in need of treatment,
these rules must reflect the likely selection which would be made by an experienced
pavement engineer.

In some systems, these rules are extended to include consideration of maintenance

treatments which are identified for the same length of pavement but in different years.
When the difference in years is small, in practice, an engineer may combine the
treatments into a single intervention and the rules in the whole life cost system should
represent this type of action.

Works costs
For each maintenance treatment, it is necessary to calculate the cost of the works. This
may be with the use of simple unit rates for each treatment or the system may consider
the different parts of the treatment (e.g. preparatory work, consequential work, traffic
management) separately from the main treatment. Similarly it may be necessary to
consider different costs if the work is carried out during the night rather than in the day
time. For major works it may also be appropriate to include the additional costs of design
and contract administration services. Routine maintenance is carried out on an annual
basis and separate costs may be calculated to represent this work.

User costs
This module may be separated into sub-modules for the calculation of the costs of delays
to traffic at road works, the costs of accidents and vehicle operating costs. These total
costs are likely to be aggregated from costs calculated for each vehicle type. For the
calculation of the costs of disruption to traffic, the effect of different standards of alternative
routes around the works site need to be considered. In addition to traffic accidents, some
models may also represent the cost of accidents to the maintenance workers on the road.

PIARC . 67 . 08.09.B - 2000

Society costs
In addition to the costs to the road user caused by the maintenance works and the level of
condition of the pavement, the costs to other parts of society, such as environmental
costs, may be considered. For example, the costs of reducing the traffic noise suffered by
inhabitants close to the road. These society costs may not be included in some systems
but will become more important in the future.

Outputs
Comparisons of the whole life costs of construction and maintenance options may be by a
variety of indicators (e.g. Net Present Cost or Internal Rate of Return) but these are not
normally sufficient for the user to fully understand the results of the analysis. Outputs
shown in Figure 10 for all of the predictions associated with an analysis will assist the user
to understand, and therefore have confidence in, the results of the analysis. The user will
be able to see the predictions from the model and assess if they are representative of this
road and traffic combination. Graphical presentations may be used to ease the
assimilation of the many results from the analyses.

Construction
Costs

Residual
Traffic
Value

User Pavement
Outputs
Costs Condition

Works Maintenance
Costs Treatments

Works
Durations

Figure 10. Whole life cost model outputs

Typical outputs from a whole life cost model are:

Construction cost for a new road, the model will estimate the construction
cost of the pavement
Traffic from the initial traffic flow and growth rates, the expected
future traffic flows and loading will be available
Pavement condition predicted pavement condition through
the analysis period
Maintenance treatments a list of the maintenance treatments expected to becarried
out during the life of the road

PIARC . 69 . 08.09.B - 2000

 Works duration duration of work for each maintenance treatment used in
the calculation of costs to the road user, during the
analysis period

Works costs cost of each maintenance treatment predicted during

the analysis period

User costs costs to the road user incurred

during the analysis period

Residual value salvage value of the pavement

at the end of the analysis period.

All, or some, of these general modules are found in most systems but there are
differences in the types of analysis which may be undertaken.

Project level analyses of specific lengths of road may be used to plan the maintenance
strategy for the road over a given period or to compare two construction/maintenance
alternatives for the road. Network level analyses, however, generally address the
implications in terms of whole life cost, of different budget allocations for a whole network.
As computing power continues to increase rapidly, the ability to undertake project level
analyses for whole road networks becomes more easily achievable and the differences
between the two levels less certain.

For example, in the UK, the model for the whole life costs of maintenance options on
specific road lengths, uses detailed condition data from actual condition surveys to identify
the maintenance treatments, while models for road networks use aggregated data in the
analysis of budget need.

Traditionally, whole life costing systems have been developed based on deterministic
models of pavement deterioration, traffic growth, effects of maintenance and costs of the
work. It is becoming increasingly important to extend the capabilities beyond the normal
sensitivity analyses undertaken with these models into a wider investigation of the
probabilities of the various possible outcomes. By specifying the distribution parameters
(e.g. mean value and variance) for each input, the shape of the output probability
distributions can be investigated.

2.4.6 Project Level Analysis

Whole life cost analyses have traditionally been carried out for specific construction or
maintenance projects. For these, the design requirements or the condition of the
pavement is specified and the whole life cost calculated without any interaction from
changes on other parts of the road network. In later processing, the whole life cost may be
considered in selecting the projects to carry out but again it is unlikely to include other
roads in the network.

PIARC . 71 . 08.09.B - 2000

 The project level analysis also usually considers one construction/maintenance treatment
for the whole length but this is changing with the introduction of whole life costing
techniques into pavement management systems. Figure 11 shows an example
maintenance profile for a single road and Figure 12 shows a pattern of treatments in a
maintenance project which also may be analysed using whole life costs. There may be a
number of the type of option shown in Figure 12 on a maintenance project and whole life
costing can play a leading role in selecting the best option to carry out, or to leave all
maintenance for another year.
Undiscounted Cost

1000000

500000

0
0 10 20 30 40
-500000
Time (years)

F ure
i 11.
g Determin stic
i mainte ance
n rofile
p

Lane 3

Lane 2

Lane 1

Reconstruction Overlay
Resurfacing No treatment

Figure 12. An example pattern of maintenance

treatments for one carriageway

2.4.7 Network Level Analysis

Network level whole life cost analyses can also be carried out. Until recently this type of
analysis has been limited to consideration of a number of specific roads in a network
selecting the best maintenance options for those roads and using the results to represent
the strategy for the whole network.

It is now commonly accepted that the management of a road network is best carried out
using a pavement management system. However, there are still many of these systems
which are based on pavement condition rather than the economics of maintenance work,
including whole life costs. The overall management process is generally recognised to be
that described by Robinson, Davidson and Snaith (24) and comprises four stages:

PIARC . 73 . 08.09.B - 2000

 Planning long-term estimates of budget requirements for the whole network,
taking into account the future pavement condition

Programming the development of budget requirements over

a defined period of a few years, where
specific projects for that period are assessed

Preparation the final stage before implementation and design options are
considered in detail

Operations management of the construction and maintenance works.

Project level analyses generally apply to the third stage while network level whole life cost
analyses are aimed at the first two stages. In practice, as analysis techniques and
processing facilities continue to improve, it becomes more difficult to distinguish between
them and the same approaches may be used for both types of analysis.

With the increase in computing capabilities in recent years, this type of analysis has now
been extended to carry out an analysis equivalent to a project level analysis on each road
in the network and plan the appropriate maintenance strategy for the network. By retaining
the information describing the location of the pavement and the condition information, this
also allows the interaction between adjacent links in the network to be considered as part
of the analysis. For example, it may not be feasible to carry out major maintenance works
on two adjacent roads in the network but it needs whole life costing to examine the
implications of deferring one of the projects. By examining the maintenance predicted for
the future on both roads, with and without the maintenance proposed for the current year,
then the option with the lowest cost consequences can be selected.

Another feature of maintenance work is that some traffic diverts from one road to another,
rather than passes through the maintenance site. When considering the whole network,
the effect of this extra traffic on other road pavements can be included in the network
analysis.

By considering all of a network, the uses of whole life costing are extended to allow a more
comprehensive analysis of budget requirements and, more usefully, to look at the change
in whole life cost resulting from different target levels of condition in the future. The
interaction of the different maintenance works on the network has caused some of the
mathematical programming techniques (e.g. linear and dynamic programming) to be
adopted in the assessment of optimum pavement condition at budget level for the analysis
period.

PIARC . 75 . 08.09.B - 2000

 It is possible to examine road networks in the same way as for projects but, in practice,
there are a number of changes to the approach which are worth adopting:

The analysis period for network level analysis may be only 5-10 years rather than
30-40 years at the project level. Individual projects within the network may still use
the long analysis period but the shorter period is used for the whole network.

As analyses become more complex, one way to reduce the complexity is to use
aggregated condition data, rather than the same detailed measurements that are
made for individual road projects.

The role of probabilistic analyses becomes more applicable at the network level.
This is considered further in Section 2.6.

When considering the whole network it becomes more important to consider other
assets on the network (e.g. bridges) in the whole life cost analysis. This enables the
benefits of integrating the maintenance work, within a single road occupancy, to be
assessed.

2.5 Links to other Parts of the Asset

The whole life cost of the road pavement is only one aspect of the road network. Figure
13 shows aspects of highway management where whole life costing has a role to play
and it is possible to consider in the future, how all these analyses can be amalgamated
to create a more efficient maintenance programme.

Figure 13 shows the associated engineering management systems but linked to all of
these are systems for the administrative management. These include:

Financial accounting
Payroll
Contract management
Budgeting

All of these systems hold information and carry out processing which is well suited to
whole life costing. In future, these links will become stronger and, in time, an integrated
management system will be developed which can do a full whole life cost analysis of all
features on the network.

PIARC . 77 . 08.09.B - 2000

 Bridge
Accidents
Management

Pavement
Streetworks
Management

Transport Environment
Planning CENTRE and Parks

Routine
Traffic
Maintenance

Equipment Materials

Figure 13. Integrated highways management system

2.6 Deterministic And Probabilistic Analyses

The deterministic approach to life cycle costs involves the calculation or selection of
discrete input values for the model parameters including the initial construction costs,
routine maintenance and rehabilitation costs, the timing of each of these costs, traffic
growth and the discount rate. These values are then used to calculate a discrete single
value for the whole life cost of the specified analysis. The deterministic approach is
ideally suited to the detailed analysis of specific maintenance lengths on a road. An
example of this approach is shown in Figure 14.
Undiscounted Cost

1000000

500000

0
0 10 20 30 40
-500000
Time (years)
Figure 14. Deterministic maintenance profile
If the discount rate = 4%,

then, the Net Present Value (NPV) is the sum of the Initial Construction Cost
(1,000,000) and the undiscounted maintenance costs (500,000) which occur in years
10, 20 and 30, less the undiscounted salvage value (50,000) at the end of the analysis
period.

NPV = 1,000,000 + 500,000 + 500,000 + 500,000 - 50,000

(1.04)10 (1.04)20 (1.04)30 (1.04)50 (1.04)40

= 1,709,720
PIARC . 79 . 08.09.B - 2000
The deterministic approach is a viable method for determining life cycle costs.
However, the main difficulty with this approach is the inability to account for the
variability of the inputs. For example, changes in future maintenance or rehabilitation
costs and changes in expected performance are not automatically accounted for using
the deterministic approach. To examine the effects of uncertainty using a deterministic
approach, the analysis may be extended to examine the sensitivity of the results to
changes in the input parameters. When there are many parameters for which the effect
of uncertainty is to be examined, this can involve a great deal of analysis.

The probabilistic approach, however, automatically takes into account the uncertainty of
the variables used as inputs and in processing in the life cycle cost analysis. The
probabilistic approach may be used at both the project and the network levels. At the
project level, the analysis shows the likelihood of the different whole life costs resulting
from uncertainties in the model parameters (e.g. network levels), these uncertainties
apply to all of the road lengths and, until recently, it has been necessary to carry out the
analysis differently.

The early network models used simple distributions of one, or a few, measures of
condition and examined the effect of different budget levels. Figure 15 shows two
examples of a simple network analysis that uses a condition index to represent the
pavement condition. In Figure 15, the index may take a value between 0 and 80 where
low values represent poor condition. In (a) and (b) the start (year 0) distribution of
condition (as given by the histogram of index values) is the same but in (a) a low budget
is applied each following year and in (b) a higher budget has been adopted. In (a), the
budget is sufficient to achieve a levelling off of condition and provides a better future
expenditure profile. In (b) with the higher budget, the proportion of the network with low
condition index values is removed and replaced with higher values following the
maintenance work. In this example, the maintenance is not sufficient to provide the
highest condition index values.

This type of analysis was generally carried out for only one or a few defects. A slightly
different approach was adopted and is still in use for the analysis of all the defects on
the network. This used Transition Probability Matrices to show the likelihood of one level
of condition moving to another level. The probabilities may be specified for categories of
similar pavements in the network (e.g. levels of traffic, types of roadbase). These
require careful work to create the appropriate probability values in each cell of the
matrix. Table 2 shows an example of one of these matrices. In this example, a rut depth
of 6mm (in 5-8mm band) in the current year has a 30% probability of being between 8
and 14mm the following year. In some systems probabilities are given for combined
defects (e.g. rutting and cracking).

PIARC . 81 . 08.09.B - 2000

10 10

% %
Year 0

0 0

10 10

% %
Year 6

0
0

10 10

%
% Year 10

0 0

0 20 40 60 80 0 20 40 60 80
Pavement condition index Pavement condition index
(a) Low budget (b) High budget
Figure 15. Histograms of pavement condition for different budget levels

Table 2. Example of a transition matrix for rut depth on a European road network

Probability of moving to new condition state

Rut depth Rut depth in following year (mm)

in current
year (mm) 0-2 2-5 5-8 8-14 14-20 >20

0-2 0.1 0.7 0.1 0.1 0 0

2-5 - 0.6 0.2 0.1 0.1 0

5-8 - - 0.5 0.3 0.1 0.1
8-14 - - - 0.8 0.1 0.1

14-20 - - - - 0.7 0.3

>20 - - - - - 1.0

PIARC . 83 . 08.09.B - 2000

It is now becoming more common for probabilistic analyses to consider the actual
distributions of condition and of other parameters in the analysis. A probability
distribution is selected for each input variable and these are then used to generate the
entire range of outcomes and the likelihood of occurrences for both the associated costs
and performance life. The procedure often used to apply the probability distributions is
the Monte Carlo Simulation. This is a computerised procedure that takes each input
value, assigns a range of values (using the average and standard deviation of the input
value), and runs multiple combinations of all inputs and ranges to generate a life cycle
cost probability distribution. Using the probabilistic approach allows for the ability of
determining the variability or spread of the life cycle cost distributions and determining
which alternative has the lower associated risk. Figure 16 shows two example output
distributions from a probabilistic analysis.

The narrower the distribution - the less associated risk

Alternative B
Probability

Alternative A

Whole Life Cost

Figure 16. Whole life cost distributions

In Figure 16, the mean values for Alternatives A and B are approximately the same.
However, the uncertainty is much higher for Alternative A. In the example, the
uncertainty is nearly balanced in that the chance of achieving a high cost is similar to
the probability of achieving a low cost. This is not always the case as the input and
output distributions are rarely as symmetrical as those shown. The likelihood of the cost
of one Alternative being higher than the cost of another Alternative can be examined
and the risks calculated. Porter (23), Abell et al (2) and Perone et al (21) show how
probabilistic analyses can be used in whole life costing and the FHWA Guidelines (10)
contain specific details on the use of a probabilistic approach.

PIARC . 85 . 08.09.B - 2000

3. QUESTIONNAIRE SURVEY
3.1 Aims of the Survey
As part of the work of the CT8 Sub-Committee a questionnaire survey has been carried
out to investigate the various approaches adopted for the analysis of whole life
performance. The questionnaire was divided into two parts. One to examine the use of
whole life costs techniques and the second to assess the use of different measures of
the remaining life of a road pavement. The results of the first part of the questionnaire
are described here.

3.2 The Questionnaire

A copy of the questionnaire is included in Appendix 3.

The main objective of the questionnaire was to obtain information on the use of whole
life costing in the management of road networks. This includes, for example, for
establishing standards and evaluating alternative options for construction and
maintenance.

For this study, 61 questionnaires were distributed to all CT8 participants. This meant, in
some cases, the questionnaire was sent to more than one organisation within a country.
This enabled different perspectives to be given for the same country (e.g. by a
university and by industry).

A total of 29 completed questionnaires have been received from 24 countries (two

organisations have responded from Austria, Australia, the Czech Republic and
Portugal). Responses have been primarily from universities/research institutes and
National Highway Administrations. In some cases, it is considered that the responses in
the questionnaire have reflected the organisation's standing, not the national
perspective, and, hence, where there is more than one reply from a country each reply
may only reflect the view of the organisation replying. The countries and types of
organisation that have replied to the questionnaire are listed in Table 3. A full list of
respondents is given in Appendix 4.

PIARC . 87 . 08.09.B - 2000

 Table 3 - Country and organisation type for each questionnaire reply
Country Organisation type
Algeria Engineering consultancy
Australia Industry (non profit organisation)
Australia University
Austria Highway administration
Austria University
Canada Qubec Highway administration
Czech Republic Engineering consultancy
Czech Republic University
England Highway administration
Finland University
France Highway administration
Germany Research institute
Greece University
Hungary Research institute
Israel Highway administration
Italy University
Japan Research institute
Netherlands Highway administration
Norway Highway research department
Poland Research institute
Portugal Highway administration
Portugal Engineering consultancy
Romania University
Spain Highway administration
Sweden Highways administration
Switzerland University
Thailand Highway research department
Ukraine University
USA Highway administration

3.3 Summary of Responses

Responses were received from 10 Highways Administrations, 9 Universities,
7 Research Institutes and 3 Engineering Consultancies.

A detailed analysis of the responses to the questionnaire is included in Appendix 5, but

some general observations can be made from the replies:

Many countries make some use of whole life costing, primarily for comparing asphalt
and concrete construction alternatives for pavements.

Whole life costing is used mainly for pavements and bridges and not other road
features such as drainage, foundations etc. In the case of bridges, whole life costing
is used mainly for comparing maintenance options on specific types of bridge.

PIARC . 89 . 08.09.B - 2000

 Germany and Poland are the only countries to state that whole life costing is
currently not used. However, research is being carried out into the use of whole life
costing for the comparison of pavement options and the long-term performance of
pavements.

14 replies stated that current research in the area of whole life costing includes the
development of design standards, use in pavement management systems, long-term
pavement performance and road user costs.

Most countries have a standard for pavement design lives and these usually aim to
provide 20 years life for asphalt pavements and 40 years for concrete pavements.
With the development of new materials and design approaches, longer lives are now
available.

None of the countries has a policy to take whole life costing into account when
evaluating new pavement construction or maintenance options. When whole life
costing is used it is primarily for high cost projects (e.g. Canada uses whole life costing
when project costs exceed 1 million CND). In general whole life costing is considered
for selection of pavement type for new construction and for the option at the time of
major maintenance (e.g. rehabilitation) schemes. In most countries when whole life
costing is applied it is mainly for motorways, sometimes for primary roads, but very
rarely for local roads.

Lack of accurate data is a major reason why whole life costing is not used more widely.

Use of whole life costing may vary within a country. In Australia and USA, the practice
in relation to the use of whole life costing varies between the States.

When whole life costing is not used, new road pavements and maintenance options for
existing roads are generally selected on the basis of lowest initial cost alone or,
occasionally, with some allowance for future maintenance requirements. Evaluation
periods for assessing new construction alternatives are generally longer than those for
assessing maintenance options.

Very few countries include an allowance for user costs in whole life cost estimates,
however, inclusion of these costs in the future is under consideration. Some countries
include environmental factors (mainly noise and use of recycled materials) in the
current evaluations.

Road user costs are seen mainly to comprise costs of delays to road users due to
roadworks and journey time and vehicle operating costs related to pavement condition.
Accident costs are considered less often.

PIARC . 91 . 08.09.B - 2000

 When works and road user costs are used in whole life costing systems, most often the
two costs are assessed separately and given equal weighting. Of the six organisations
that have stated that different weightings are given to works and user costs, three give
a higher weighting to user costs and three to works costs.

At the project level, future maintenance requirements are determined on the basis of
engineering judgement or by using deterministic models of pavement performance.
Few countries use a probabilistic approach for network level pavement analysis.

The pavement residual life concept is used in a majority of countries and in most of
them it is evaluated both at the network and project levels using structural and surface
condition data. It is used either as part of a general condition index (8 countries) or to
represent structural condition (8 countries). It is also used in the evaluation of asset
value at the end of the evaluation period.

Discounting is the tool most commonly used to handle future costs and, when used, it
is applied throughout the assessment period. For the countries replying, the annual
discount rate varied between 3% and 12%.

Pavement Management Systems are used in several countries for the prioritisation of
maintenance budgets. Many of these systems include whole life cost analyses in
setting priorities.

Other whole life costing applications given in the replies include the comparison of
contractor construction alternatives, comparison of budget options, assessment of
innovative products and establishment of new standards.

PIARC . 93 . 08.09.B - 2000

4. USES OF WHOLE LIFE COSTING

The whole life costs of road pavements can be used to obtain the best value for money
from highway expenditure. It is important that these costs closely represent the costs
that would arise from the deterioration patterns of in-service pavements and the
analysis allows the application of maintenance strategies appropriate to different
situations.

Whole life costs may indicate that the lowest initial cost is not necessarily the best value
for money. Similarly, conditions vary across the road network and an optimum design
for one pavement may not be so in other situations. For example, on easily maintained
(lightly trafficked) roads there may be few benefits in paying more for improved
durability, but on more heavily trafficked roads the position may be different and
increasing the strength of the pavement, at the same time as providing a new surface,
may be worthwhile.

There are numerous possibilities for the application of whole life costs at both the
project and network levels.

4.1 Standards and Specifications

Policies for pavement design generally include a required pavement life, defined by the
traffic to be carried by the pavement, with appropriate maintenance. Selection of the
design life must be made on the basis of life cycle costs if the benefits of initially high
strength and therefore long-life pavements are to be considered equitably. The
appropriate design life will need to be reviewed for different traffic levels, construction
materials and maintenance techniques. Figure 17 shows a whole life cost analysis for
pavements with different initial design lives on the same road. An initial design life of
35 years has the lowest whole life cost but there is very little return from extending the
initial life from 30 years. The shape of the variation changes with the parameters of the
analysis. These results are for a medium trafficked motorway with an asphalt pavement
using an annual discount rate of 6 per cent.

In the future, standards and specifications may be influenced by external factors (e.g.
pavement noise and sustainability) and whole life cost analyses will have a major role to
play alongside the analysis of these other criteria.

PIARC . 95 . 08.09.B - 2000

 6000

Net Present Cost

4000

2000

0
20 25 30 35 40
Life to overlay (years)

Construction Cost Maintenance Cost User Cost

Figure 17. Variation of whole life cost with initial design life

4.2 Recommended Designs for New Pavements

Designs for new schemes may, in some circumstances, need to limit pavement options
to those with the lowest life cycle cost (e.g. sites where maintenance will be difficult).
Life cycle costing allows site specific evaluations to be undertaken rather than relying on
a standard design for all occasions. For example, a contractor may propose an
alternative, initially lower cost design. It is necessary, however, to examine the whole
life costs rather than only the initial costs, before selecting or rejecting the proposed
alternative.

4.3 New Techniques and Materials

New materials are continually being developed with the promise of improved
performance albeit at increased initial cost. Any assessments carried out either during
the development stage or after inclusion within a specification must establish the cost
effectiveness of these materials over their expected life.

For example, a new wearing course material may have properties which provide a
better resistance to rutting than achieved with conventional material but the properties
do not change any other aspect of performance. It is estimated that the rate of rutting is
10% less with the new material but the material cost is 25% higher. There is no effect
on the rate of laying the material for the traffic management required during the
maintenance work or the resources required to lay the new material. Also, lower
pavement layers remain unchanged. The increase in the costs of the maintenance
treatments is therefore less than the 25% for the new material but still increases the
total costs of the treatments. Table 4 shows the discounted costs (annual rate of 6 per
cent) from a whole life cost analysis to assess if the extra cost of the new material is
worthwhile.

PIARC . 97 . 08.09.B - 2000

 The change in construction cost is insignificant as the surface layer contributes only a
small part to the overall cost of the road but the effect is bigger for the maintenance
work during the life of the pavement. The timing of the overlay is unchanged because
the new material does not affect the structural performance. There is a small change in
the cost of the overlay to reflect the use of the new wearing course.

The principal source of the saving is the removal of the thin surfacing treatment before
the overlay. With the conventional material, the pavement is not expected to last
11 years between the resurfacing and the overlay. Overall the use of the new material
provides a reduction of 15% in works costs and for the whole life cost of the pavement,
approximately 10%, and appears therefore to be worth the extra initial cost.

Table 4. Whole life cost analysis of a new material

(a) Conventional material
Year Treatment Works User Total
Cost Cost Cost

0 Construction - - -

10 RS 114 195 309

17 TS 44 63 107
21 OV 91 512 603

29 RS 38 443 481

TOTAL 287 1213 1500

(b) New material
Year Treatment Works User Total
Cost Cost Cost

0 Construction - - -
12 RS 109 186 296
21 OV 94 512 606

31 RS 36 439 475

TOTAL 239 1138 1378

RS Resurfacing TS Thin Surfacing OV - Overlay

4.4 Implications of Varying Maintenance Strategies

The aim of reducing disruption to road users must be achieved by sound management of
the road network. Where budgets are limited, there will be several schemes competing for
the same funds and it will therefore be necessary to investigate the consequences of
adopting sub-optimal maintenance strategies on some schemes. It is no longer
appropriate to prioritise solely on the worst condition. Examination of the future costs
associated with various maintenance options on each scheme allows the selection of the
maintenance treatment that gives the best return on the maintenance investment.

PIARC . 99 . 08.09.B - 2000

 Net Present Value may be used as a criterion for accepting or rejecting a project, or an
option on a project, but it cannot, by itself, be easily used to identify the best timing of that
option. In the case of maintenance planning, Net Present Value cannot easily show which
is the best year in which to carry out the maintenance work. This can be done
incrementally by considering if it is better to delay the project by a year. If the project is
delayed, the same question can be asked next year and eventually the best year of the
work is identified. Similarly, the ratio of Net Present Value to current cost shows the value
of each unit of current cost and can act as a priority indicator for maintenance options.

An indicator defined on the basis of the ratio of the change in future costs to the increase
in current costs can therefore be used to select the maintenance options which will help
allocate the most effective maintenance budget.

In comparing two maintenance options, A and B, where A is more expensive than B, an

Economic Indicator (EI) for the two options is derived from the decrease in future costs
achieved by increasing the initial cost and can be defined as:

EI = Future cost of B - Future cost of A

Initial cost of A - Initial cost of B

The higher the value of the indicator, the higher the importance of the initially higher cost
option and hence the higher the priority for allocating part of the budget to that option. If
the ratio is negative, the higher cost option is not viable.

It has been shown how the economic approach costs less in terms of maintenance
expenditure but leaves the network in a better condition than the traditional condition
based method for the selection of sections for treatment and the treatment types to adopt.

4.5 Adjudication of Tender Alternatives

Traditionally, contracts for new pavements are awarded on the lowest overall price for
the job for the new road. Options for choice of pavement type may be available and the
contractor is free to choose from the list of pavement alternatives offered. While all
equivalent design options are assumed to meet the specified required life, each
pavement type has different maintenance requirements - for example, resealing the
joints on a jointed concrete pavement is not required on flexible pavements. By
modelling local conditions for traffic, traffic management and relationships for
deterioration, the comparison of alternative tenders for a particular road scheme can
take into account the different future maintenance requirements of the options and also
the implications for road users. This will then provide the lowest cost over the life of the
road rather than the lowest cost of the construction work.

It is essential when adopting this approach to the evaluation of tenders, or bids, for
work, that the process is transparent to the contractors tendering so that the options
available can be assessed by the contractors prior to, or during, the tender period.

PIARC . 101 . 08.09.B - 2000

 In trials of the use of whole life costing for tender evaluation carried out by the Highways
Agency in England, the future cost of each permitted pavement option was made
available to the tendering companies. It was therefore clear, how much would be added
to the tender of a particular pavement option, to represent the future cost associated
with that option. The COMPARE whole life cost model was used to determine the future
cost factors for each pavement option.

Table 5 shows the future costs for the six pavement options available on two schemes
during the trials. These schemes represent a heavily (scheme A) and lightly (scheme B)
trafficked road on the national network. Additional future costs would be required if other
fully flexible pavement types (e.g. the new stronger roadbases) were to be considered.

For scheme A, if a contractor submitted a tender for a fully flexible pavement,

1,790,000 was added to the tender price. If the tender was for a continuously
reinforced concrete pavement, then 1,310,000 was added to the tender price. The
tender was then awarded to the lowest total price. By knowing the future costs at the
time of tender, the contractor can assess which pavement type to include in the tender.
If the continuously reinforced concrete pavement could be built for a cost which is less
than 480,000 (1,790,000 - 1,310,000) more expensive than the cost of the fully
flexible pavement, then the concrete pavement would have the lowest total cost.

Table 5. Future costs for two road schemes in England

Pavement Type Future Cost (GBP)

Scheme A Scheme B

FF 1,790,000 400,000
FC 1,470,000 410,000

URC 3,770,000 780,000

JRC 3,680,000 680,000
CRCP 1,310,000 260,000

CRCR 1,390,000 240,000

FF - Fully flexible (Dense Bitumen Macadam)
FC - Flexible composite
URC - Unreinforced (jointed) concrete
JRC - Reinforced jointed concrete
CRCP - Continuously reinforced concrete
CRCR - Continuously reinforced concrete roadbase

4.6 Performance Based Specifications

The use of performance based specifications has been considered by Sub-Group 5 of
CT8 and the report of that Group describes how whole life costing can contribute to the
introduction of these specifications.

PIARC . 103 . 08.09.B - 2000

 Whole life costing provides a way of assessing the different levels of performance which
are inevitably achieved when using performance based specifications. Performance is
achieved by combining different characteristics of the pavement. For evaluation of the
value of new pavements, it is essential that the whole life cost approach is based on
characteristics that correlate well with performance. By weighting individual factors of
performance, an approach may be to examine the future cost consequences associated
with different values of each characteristic and combine these costs into the payment
plan for the work. Whole life costs can be used to evaluate the real effects on
performance and provide the best balance between costs and performance for the
pavement.

The use of whole life costs also extends into determining overall payment plans for non-
compliant work because again, payment for the work can be based on the predicted
performance of the pavement.

To estimate the effect of deficient work on performance, it must be possible to apply the
deterioration models to levels of quality which may not have been included in the data
used to produce the models, and appropriate intervention levels must be devised for
use in this situation. However, once the intervention level has been broken,
maintenance work is necessary and this can be assumed to remedy defectiveness. The
costs for future years are then estimated in the normal way. The difference between the
expected whole life cost and the whole life cost resulting from the as-built pavement,
could be related to the pay adjustment factor for the work.

User costs are an important, and may be a large component of the whole life cost. An
effect of the provision of a poor quality pavement may be to significantly increase this
component of cost and it is, therefore, important that this part of the total cost also forms
part of the payment plan. A high quality pavement may reduce future user costs and,
similarly, the contractor could receive the benefit from this.

4.7 Network Management

In the same way that project level analyses are used to examine the lives of
maintenance treatments and prioritise specific maintenance works, whole life costing
can make significant contributions to other aspects of road network management.

The use of whole life costing for the allocation of budgets has already been described
but, as part of effective management of the network, there is a need to determine the
budget required to achieve a target condition of the network and to determine what that
target condition should be. The only way these can be reliably determined is by
examining the whole life costs of alternative strategies and optimising the budget over a
specified period.

PIARC . 105 . 08.09.B - 2000

An improved condition may be achieved by increasing the budget immediately until the
target condition is achieved or by a gradual change in budget over the analysis period.
There are consequences from these approaches that affect the whole life cost of the
network. A more frequently asked question is, however, what is the condition for the
network. Network level whole life cost analyses can be used to examine these options
and network level whole life cost models are now available to carry out these analyses.

PIARC . 107 . 08.09.B - 2000

5. ISSUES AFFECTING
THE USE
OF WHOLE
LIFE COSTING
There are many issues associated with applying whole life costing techniques to road
pavements. Some of these have been identified in this report as part of the description
of the method, but others arise when considering the conventional approach to road
management. While issues cannot be overlooked, there are major advantages which
outweigh the potential problems with adopting whole life costing.

Many of the advantages and disadvantages of the approach are not particular to the
highway engineering field. The issues are currently being assessed to determine their
relative merits. In this section, the merits of these will be discussed. It is also worthwhile
to consider each of the issues as they can act as a major justification for the application
of the technique.

Whole life costing can be carried out without adequate appreciation of the difficulties
that may be encountered. The issues identified in this section can serve as a useful
check and balance to the implementation and operation of the approach.

The whole life costing issues identified are:

Best value for money

This summarises many of the other advantages but is in itself significant. It is
acknowledged that only by considering the whole life of an asset, can the best value for
money be achieved. The main questions are over the reliability of the analyses in
providing the necessary information and affordability of an initial higher cost.

Fair comparisons between alternatives

Inevitably options on a road pavement do not lead to simple comparisons. Lower first
cost may sacrifice future performance or inadequate treatment of other features
associated with the pavement while a higher first cost may result from over provision.
Only by comparing the technical and economic future performance of the pavement can
fair assessments of construction and maintenance options be considered.

PIARC . 109 . 08.09.B - 2000

 Long-term investment
Road pavements are long-term investments and it is appropriate that analysis
techniques applied to these types of investment, such as whole life cost analysis, are
carried out. The duration of the investment analysis may vary in different countries.
Some organisations consider more than 40 years for an investment analysis while
others feel 20 years is more appropriate given the uncertainty of longer-term
predictions. In either case the length of the analysis period enables a more
comprehensive analysis of the investment options than is possible with the traditional
initial cost approach.

Uses current knowledge on condition

Whole life cost analyses make full use of the current knowledge of condition of the
pavement to assess the future effects of the maintenance options.

Consistent approach to all decisions

By providing a framework for the whole life cost analysis this introduces a consistent
approach to all the decisions associated with the choice of maintenance. The framework
is itself a major advantage, since all too often, investment options are compared on
different bases.

Allows consideration of alternative levels of performance.

Increased adoption of performance specifications leads to the provision of alternative
levels of performance. A whole life cost analysis enables the consequences of these
alternative levels of performance to be assessed.

Combining different parts of the infrastructure

Whole life costing is used for other features of the road (e.g. bridges) and the adoption
of a whole life cost framework enables the straightforward combination of the analyses
for all these features.

Considers direct and indirect costs

It is not only the direct works costs that determine the best maintenance option but also
the indirect user costs of the maintenance treatments. All of these costs over the life of
the road can signify the best value for money.

Stimulates innovation
If improved performance, even at higher cost, can be selected, engineers are
encouraged to develop techniques to provide that improved performance. To stimulate
this activity, engineers must be able to see a way in which the innovative solutions can
be assessed and benefits identified. Whole life costing provides that assessment.

Comparison of new construction and maintenance work

There is a traditional problem in highway investment between choosing to build new
roads or maintain the existing network. It is essential that the benefits of the two options
are assessed over a long period in order that the best strategy can be identified. Whole
life costing provides a tool where this investment choice can be considered.

PIARC . 111 . 08.09.B - 2000

 Inclusion of other factors
With traditional assessments of the construction and maintenance costs of road
pavements, there is no straightforward way of including other factors that affect the total
cost. For example, the level of safety is usually derived from accident counts. A whole
life cost analysis provides the ability to include an allowance for these other costs as
they occur through the life of the pavement. More often, a whole life cost analysis is only
one part of a multi-criteria analysis of all factors involved in the investment.

Technique to examine the effects of future changes

Decisions on current spend are usually based on an expectation of future pavement
behaviour, traffic and maintenance treatments. Whole life cost analyses allow the effect
of changes in these assumptions to be examined and the consequences of potential
changes to be understood.

Not suitable to long-life assets

In the past it has been proposed (e.g. CIRIA, 12) that whole life costing is suited to
assets with short life, high periodic costs and regular maintenance programmes (e.g.
mechanical and electrical equipment) but not to long life assets with low or irregular
maintenance costs, such as roads and buildings. As the quality of data collection
methods improves and data becomes available for use in more sophisticated whole life
cost models, this disadvantage can be overcome and whole life costing accepted as a
valuable technique for effective highway management.

Higher initial cost

A lower whole life cost may be achieved as a consequence of a higher initial cost. In
times when budgets are invariably under pressure, this inevitably raises the question of
affordability and the effects on other parts of the road network (e.g. a higher initial
construction cost may mean a shorter total length of construction can be financed in a
given year). Whole life cost analyses enable an objective comparison of the options to
be made and the cost associated with the decision can be identified.

Effect of new developments

Whole life cost analyses rely on predictions of all aspects of use of the asset in addition
to these aspects directly related to the pavement. An example may be the
development/introduction of new modes of transport. Pavement analyses do not
automatically allow for any substantial developments in any of these aspects that could
significantly alter the lowest whole life cost option. The results are therefore subject to
change when the developments occur.

PIARC . 113 . 08.09.B - 2000

 Relies on current models/materials/techniques
Associated with the previous issue, the whole life cost analyses rely on current models
of pavement behaviour as well as the materials and techniques available for
maintenance at the time of analysis. As new methods become available (e.g. a new
high performance material) the best whole life cost option may change.

Uncertainty in long-term predictions

In addition to future condition, there is a high level of uncertainty in predictions of the
long-term traffic flows on a road. As these relate directly to pavement wear and user
costs, this uncertainty is a major cause for concern in the interpretation of whole life cost
results.

Policy changes
Without technical changes, there are still potential policy changes. Examples may be
the level of vehicle/fuel taxation that causes a change in the modal split in journeys, or
the restricted use of parts of the highway. All of these types of changes can be
examined using a whole life cost model and decisions taken, based on a more
comprehensive analysis of the possible outcomes.

Future budget availability

In selecting the lowest whole life cost, there is an assumption about the availability of
funds for maintenance work in the future. If the funds are not available then the changes
in maintenance work that are then carried out may mean the current option no longer
provides the best value for money. However, a strength of whole life costing analyses is
the ability to examine these consequences and allow the necessary decision to be
taken on more detailed information.

Complex analysis required

Whole life costing may be a simple process with some preliminary analyses carried out
manually. However, in practice, the analysis is complex and therefore less well
understood by users and decision makers. There is often a tendency to increase the
detail of the analysis and hence amplify this disadvantage. A simple analysis is seen as
a considerable advance over an analysis based solely on initial cost.

Policy makers reluctant to accept decisions

Policy makers usually prefer to make decisions that have an immediate effect. With
whole life costs, the savings may be some time into the future and therefore the policy
makers may be less likely to see them as attractive. The results of the analyses,
however, demonstrate the potential benefits in the long-term and hence the loss of
benefits from selecting the incorrect option.

Effects of other parts of the economy

Results from whole life cost analyses are dependent on many external factors. One of
these is the discount rate, usually set outside the highways department (as is the value
of time), and this could completely change the results of the whole life cost analyses.
However, there is still benefit in considering options on a consistent basis with the
specified discount rate.

PIARC . 115 . 08.09.B - 2000

 Combines direct and indirect costs
Conventional analyses are increasingly combining direct (works) and indirect (user)
costs in an analysis. This is common in whole life cost analyses but it is still questioned
when considering the amalgamation of all costs associated with the pavement.

Length of analysis period

To achieve a reliable estimate of the whole life cost, a long analysis period may be
required. This puts an increased reliance on the predictions made by the model. If
shorter analysis periods are used then the reliance is placed on the residual value of the
pavement. The reliability of this factor is then open to question.

Need for up to date information

As with all predictive and analytical models, the process requires up to date information
on all aspects of the road to provide reliable forecasts. The use of whole life costing
methods may therefore lead to more extensive data collection procedures.

PIARC . 117 . 08.09.B - 2000

6. FUTURE DEVELOPMENTS
Whole life costing has been used for many years in a wide variety of fields but there are
still areas where further development is possible to improve the usefulness of the
approach to the highway engineer:

Deterministic / probabilistic models

There is an increasing awareness of the use of risk analysis and the need to examine
uncertainty in forecasts. Whole life costing is no different to other techniques in this
aspect and there is a need to extend and improve the use of whole life costing in this
area.

Total asset management

Links have been shown between whole life costing systems and other engineering
management systems. These links need to be strengthened to enable fully integrated
management systems to be developed to work as part of a comprehensive financial
strategy for the management of the road network. This will then allow the inclusion of
whole life costs to contribute to the development of depreciation models and techniques
for allocation of actual costs to those asset users who are responsible for those costs.

Performance specifications
The use of performance specifications is only now being introduced into road pavement
construction and maintenance work. This approach will increase and whole life costing
has a full role to play in allocating the appropriate costs for the levels of performance
provided.

User costs - delays

As traffic increases then the effect of congestion on road users also increases. The
value of time for road users grows and the effect of the delay costs incurred by road
users on whole life cost analyses becomes even larger. Techniques need to be
developed to ensure there is an adequate representation of these costs in whole life
cost analyses. The Questionnaire Survey carried out by this Sub-Committee showed
that there are many whole life cost users who do not take full account of user costs in
their analyses.

User costs VOCs

User costs also arise from vehicle operating costs (VOCs) incurred by vehicles running
on uneven surfaces. These costs have been considered in some detail for less well
developed countries but there is a need to extend this to countries with developed
economies. Only when the costs of letting the pavement condition deteriorate to lower
levels can the full benefits provided by adequate pavement maintenance be understood.

PIARC . 119 . 08.09.B - 2000

 Transport costs private road operators
In the future, the costs of journey time will become more important as the private road
operators take a bigger role in the transport industry by planning journeys and
identifying the best mode of transport. When these costs are considered more fully, they
introduce a more detailed analysis of the costs of goods transport and this may affect
the construction and maintenance operations for the road pavement.

Environmental costs - social, noise, pollution

The traditional costs associated with the whole life cost of a road pavement are the
works costs and the user costs arising from delays at roadworks. It is becoming
increasingly clear that other costs arise for people resident adjacent to the road. These
are summarised as the environmental costs of noise and pollution and the social
disturbance costs. Assessments have been carried out for many years but these have
usually been at a qualitative level rather than involving the direct valuation of the
disturbance. This now needs to be extended so that all the costs associated with the
road pavement can be included in the whole life cost analysis.

Accidents
The costs of accidents have been included in the costs associated with road works for
some years. As traffic management arrangements change, the effects on these costs
need to be considered to ensure that the correct allocation of costs is retained.
Accidents also arise because of low levels of condition on the road pavement and little
is known about this effect except where the defect is skid resistance. As Governments
continue to press for further reductions in the number of accidents, this area is
important. Significant savings can be made by reducing the costs of accidents on an
individual road and those costs need to be more fully represented in whole life cost
models.

New sources of road funding

To date, whole life costing of road pavements has been carried out principally for central
and local Government. In recent years, new managing companies have been
introduced to fund and operate the road network (DBFO Design Build Finance and
Operate companies) and this is expected to move into the management of the existing
network (MFO Manage Finance and Operate companies). The interest of these
construction companies in whole life costing approaches has been specific in terms of
designs for new pavements but there are aspects of the managing role that will benefit
from the introduction of whole life cost techniques. The models will need to address
those aspects not considered in the same way by Government. This may involve more
importance being placed on the provision of an open smooth road for users.

Performance indicators
In many countries there is a move to the introduction of performance indicators in many
aspects of road management. These indicators may include a measure of whole life
cost and the success of the highway authority in managing the whole life cost as well as
the engineering aspects of the road.

PIARC . 121 . 08.09.B - 2000

 Countries with emerging economies
The analysis of whole life costs of road pavements in less well developed countries has
been considered in the past by the World Bank HDMIII model and this is being
continued with the new HDM4 model. The needs of these countries are no different to
those of developed countries but there is an opportunity to increase the influence of
whole life costing techniques in the further development of these economies.

PIARC . 123 . 08.09.B - 2000

7. CONCLUSIONS
This report has described the current status of techniques available for undertaking
whole life cost analyses of road pavements.

Many different definitions are available for whole life or life cycle costing but that given
for road projects in the Quality Improvement of the National Highway System NHS
Designation Act of 1995 in the USA, encompasses the views of the sub-committee:

... a process for evaluating the total economic worth of a usable project by analysing
initial costs and discounted future costs, such as maintenance, user, reconstruction,
rehabilitation, restoring and resurfacing costs over the life of the project.

Whole life costing has been available for use separately in the analysis of the costs
associated with various parts of the infrastructure (e.g. pavements and bridges) for
some years. The application of the approach to road pavements has already been
demonstrated throughout the world in many different situations and whole life costing is
already a fundamental tool for highway managers. Although not yet applied in a routine
way, a major advantage of the technique in the future is expected to be the combination
of analyses for all parts of the infrastructure, to provide a full picture of the cost of a road
over its life.

Whole life cost analyses can be undertaken for a wide range of road lengths and road
types, at various levels of detail. Nevertheless, there is a consistent approach which can
be adopted for all of the different types of analyses for lightly and heavily trafficked
pavements at the project and network levels.

It is possible to apply the same approach to all situations with the components of cost
contributing different proportions to the total cost. For example, user costs associated
with pavement condition and road maintenance on heavily trafficked roads are primarily
the costs of delays to users at road works. In parts of the world where traffic flows may
be lower and pavement condition includes higher levels of unevenness, the balance
changes and the vehicle operating costs arising from fuel consumption, tyre wear,
vehicle repair etc, become the dominant factor.

Whole life costing has been shown to be suitable at all of the stages in the life of a road;
inception, design, construction and maintenance. The level of detail in the analysis
changes for each of the stages and at no stage is the whole life cost the only, or indeed
necessarily, the major factor in the engineering decisions.

PIARC . 125 . 08.09.B - 2000

Increasingly, decisions on pavement construction and maintenance options are taken
for reasons other than cost alone. Whole life costing can provide an essential input to
the development and use of multi-criteria analysis techniques which can take into
account a broad spectrum of external factors (e.g. traffic noise) rather than rely solely
on the construction and maintenance costs of the pavement.

The introduction in the future of new materials (e.g. stronger pavement types
incorporating High Modulus Base material) and techniques may always affect the future
cost of the road pavement. This occurs whether decisions are taken on the basis of
initial cost or whole life cost. Whole life cost analysis is a valuable tool for evaluating
innovative concepts and new materials, giving a more complete assessment of the
benefits offered and the value for money.

More than 40 replies to a questionnaire on the use of whole life costing show that whole
life costing for road pavements is possible and is taking place for a variety of uses in
many countries. The most common application of the technique is currently the
comparison between the costs of asphalt and concrete pavements. In many cases, the
analysis methods are relatively simple but, even at that level, it is seen to be better than
basing all decisions on the first cost and taking no account of the future costs during the
life of the road.

The ability to undertake this type of analysis can be markedly affected by factors such
as the quality of construction, uncertainty in future predictions of traffic and pavement
performance, in addition to changes caused by the introduction of new materials and
techniques.

Performance based specifications are being adopted to address the consequences of

variation in the quality of construction and maintenance of road pavements. By
predicting the future costs associated with the different qualities of pavement layers,
whole life costing can assist in setting the bonus/penalty payments included in
performance specifications.

Uncertainties in future predictions of pavement performance and levels of traffic have

traditionally been examined using sensitivity analyses of the various parameters. With
the development of probabilistic models for the analysis of whole life cost, these
uncertainties can be addressed more easily and decisions taken to include allowance
for the estimated future variations.

This review has shown that whole life costing already plays an essential role for the
highway manager but there is scope for further development of the method to link all the
cost elements relevant to the operation of the road network.

PIARC . 127 . 08.09.B - 2000

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[23] PORTER J (1985). Analysis of maintenance options. 2nd North American Pavement
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[24] ROBINSON R, DANIELSON U and SNAITH M (1998). Road maintenance management

concepts and systems. Macmillan Press Ltd. Basingstoke, England.

[25] SCHMUCK A and RESSEL W (1998). Cost effectiveness: a comparison of economic

efficiency for different road pavements. 5th Eurasphalt Congress. The Hague,
Netherlands.

PIARC . 129 . 08.09.B - 2000

9. BIBLIOGRAPHY
In addition to the References given in Section 8 of the Report, the following Bibliography
provides a selection of the extensive literature available on the subject of Whole Life
Costs of Road Pavements.

ABELL R (1993). Whole-life costing of pavements. ACMA Seminar '93 -. 'Blacktop

Works', British Aggregate Construction Materials Industries (BACMI). London, England.

ABELL R (1992). Whole life costs of road pavements. Alan Brant National Workshop on
Pavement Assessment and Rehabilitation. Institution of Highways and Transportation.
London, England.

ABELL R and RAMDAS V (1995). Evaluation of the whole life costs of road pavements.
Proceedings of the 23rd PTRC European Transport Highways and Planning Summer
Annual Meeting (Seminar K), PTRC Education and Research Services Ltd. London,
England.

AL-SULEIMAN TI, SINHA,KC AND KUCZEK T (1989). Effects of routine maintenance

expenditure level on pavement service life. Transportation Research Record No. 1216.
Transport Research Board. Washington, USA.

AUFF A (1996). Quality/cost/performance trade-offs in pavement construction.

Proceedings of the combined 18th ARRB Transport Research Conference and Transit
New Zealand Land Transport Symposium. Australian Road Research Board, Victoria,
Australia.

AZMY OE, SHARAF EA AND LOTFI HL (1989). A combined life cycle cost and
performance approach for selection of optimal flexible pavement strategies.
Transportation Research Record No.1216. Transport Research Board. Washington,
USA.

BENNETT D AND MOFFATT M (1995). Whole of life maintenance requirements of

heavy duty pavements. Research Report 1995-06. Australian Road Research Board,
Victoria, Australia.

BOWSKILL GJ (1993). Whole life costing of pavements - the way ahead. Proceedings
of Britpave Seminar 1993 - Current trends in Concrete Pavement Design and
Construction. British In-situ Concrete Paving Association (Britpave). Crowthorne,
England.

BOWSKILL GJ (1993). Whole life costing: Where next? Possible applications. ACMA
Seminar '93 -. 'Blacktop Works', British Aggregate Construction Materials Industries
(BACMI). London, England.

BULL I and WARWICK R (1992). An approach to the life cycle cost analysis of
alternative pavement types. Proceedings 16th ARRB Conference, Perth. Australian
Road Research Board. Victoria, Australia.

BULL JW (1993). Life cycle costing for construction. Blackie Academic and
Professional. London, England.
PIARC . 130 . 08.09.B - 2000
CARMICHAEL RF and SEEDS SB (1987). Municipal flexible pavement design and life
cycle cost analysis system. 6th International Conference Structural Design of Asphalt
Pavements, University of Michigan, Ann Arbor, Michigan, USA.

CHONG GJ (1990). Rout and seal cracks in flexible pavementa cost-effective

preventive maintenance procedure. Transportation Research Record No. 1268.
Transport Research Board. Washington, USA.

COLE LW and HALL MJ (1997). Relative costs of various concrete pavement features.
Transportation Research Record No.1574. Transportation Research Board,
Washington, USA.

COLLURA J, SPRING G AND BLACK KB (1993). Service lives and costs of local
highway maintenance and rehabilitation treatments. Transportation Research Record
No.1399. Transport Research Board. Washington, USA.

DUFFELL JR and PAN JU-KUN (1993). Pavement performance predictions and life
cycle costing of minor roads. Proceedings of 21st PTRC European Transport, Highways
and Planning Summer Annual Meeting (Seminar B). PTRC Education and Research
Services Ltd. London, England.

EL-FAROUK AZMY O and SHARAF EA (1988). A life cycle cost based computer
program for the selection of optimal design and maintenance alternatives. Proceedings
3rd IRF Middle East Regional Meeting: towards better road performance. February
1988. Riyadh, Saudi Arabia.

FERNANDO EG and LYTTON RL (1992). A system for evaluating the impact of track
characteristics and use on flexible pavement performance and life-cycle costs.
Proceedings of the 7th International Conference on Asphalt Pavements (ISAP).
International Society for Asphalt Pavements. Texas, USA.

FREER-HEWISH RJ (1989). How design, construction and maintenance inter-

relationships affect total life performance of roads. 15th ARRB conference, Darwin.
Australian Road Research Board. Victoria, Australia.

GEORGE KP (1990). Pavement Management Information System (PMIS). Final

Report. Mississippi University. Federal Highway Administration, Washington, USA.

GERKE RJ and DEWALD CM (1998). Level of service based life cycle analysis. 1998
Annual Conference and Exhibition of the Transportation Association of Canada.
Transportation Association of Canada. Ontario, Canada.

HAJEK J, HAAS R, TURAY S and AUSTIN H (1992). Pavement economic analysis

made easier. Proceedings of the 1992 Annual Conference of the Transportation
Association of Canada. Transportation Association of Canada. Ontario, Canada.

HAJEK J, TIGHE SL and HUTCHINSON BG (1998). An economic life-cycle evaluation

of pavement damage associated with trucks : an Ontario study. 1998 Annual
Conference and Exhibition of the Transportation Association of Canada. Transportation
Association of Canada. Ontario, Canada

HALL KT and DARTER MI (1989). Rehabilitation performance and cost-effectiveness:

10-year case study. Transportation Research Record No. 1215. Transport Research
Board. Washington, USA.
PIARC . 131 . 08.09.B - 2000
HEIN D, EMERY J, CARRICK JA and FRASER B (1997). A pavement performance and
life-cycle cost evaluation of a polymer modified asphalt cement. Proceedings of the 13th
World Meeting of the International Road Federation. Transportation Association of
Canada. Ottawa, Canada.

HICKS RG, DUNN K and MOULTHROP JS (1997). A framework for selecting effective
preventive maintenance treatments for flexible pavements. Transportation Research
Record No.1597. Transportation Research Board. Washington, USA.

HORTON S (1990). Project level pavement management system development. Final

report. Federal Highway Administration. Washington, USA.

HOYT DM, LYTTON RL AND ROBERTS FL (1988). Performance prediction and cost-
effectiveness of asphalt-rubber concrete in airport pavements. Transportation Research
Record. Transport Research Board. Washington, USA

KALLOKOSKI A, RAHIALA J and EHROLA E (1995). Tierakenteen elinkaarianalyysi

(the life cycle cost analysis of a pavement structure). University of Oulu, Finland.

KAZMIEROWSKI TJ and BRADBURY A (1998). A critical review of Ontarios life cycle

costing procedure for freeway pavements. 1998 Annual Conference and Exhibition of
the Transportation Association of Canada. Transportation Association of Canada.
Ontario, Canada.

KILBOURN PCR and ABELL R (1988). Whole life costs of concrete pavements.
Proceedings 16th PTRC Transport and Planning Summer Annual Meeting (Seminar F).
University of Bath, England.

KLEMENS TL (1990). Hot in-place recycling adds 15 years to asphalt's life. Highway
and Heavy Construction. Massachusetts, USA

LOONG KY (1989). Road pavement design and maintenance - a life cycle cost
approach. Proceedings of International Conference and Exhibition on Road Transport.
Beijing, China.

MARTIN TC (1994). Pavement behaviour prediction for life cycle costing. Research
Report 1994-12. Australian Road Research Board. Victoria, Australia.

MARTIN TC and RAMSEY ED (1996). Rural pavement improvement prediction due to

rehabilitation. Research Report 1996-06, Australian Road Research Board, Victoria,
Australia.

MARTIN TC and ROBERTS JD (1998). Network and project level pavement life-cycle
costing modelling for asset management. Proceedings of the Road Engineering
Association of Asia and Australasia. Transit New Zealand. New Zealand.

MARTIN TC and ROPER R (1997). A parametric study of the influence of maintenance

and rehabilitation strategies on network life-cycle costs. Research Report ARR 306.
Australian Road Research Board. Victoria, Australia.

MARTIN TC and TAYLOR SY (1994). Life-cycle costing: prediction of pavement

behaviour. 17th ARRB Conference, Queensland. Australian Road Research Board,
Victoria, Australia.

PIARC . 132 . 08.09.B - 2000

McNERNEY MT, HUDSON WR, SMALL KA and WINSTON C (1992). Engineering
analysis of the economics of predicted pavement life. Transportation Research Record
No.1359. Transportation Research Board. Washington, USA.

MILLER HR, SCHEROCMAN JA and PERZ JS (1987). The cost effectiveness of

asphalt additives. Proceedings of the 32nd Annual Conference of Canadian Technical
Asphalt Association. Montreal, Canada.

MOUAKET IM, AL-MANSOUR A and SINHA KC (1991). Evaluation of cost-

effectiveness of pavement surface maintenance activities. Federal Highway
Administration. Washington, USA.

NOVAK EC and KUO WH (1992). Life-cycle cost versus network analysis.

Transportation Research Record No.1344. Transport Research Board. Washington,
USA.

NUNN M (1998). Structural design of long-life flexible roads for heavy traffic.
Proceedings of the Institution of Civil Engineers: Transport. Thomas Telford Ltd.
London, England.

OCKWELL A (1990). Pavement management: development of a life cycle costing

technique. Economics Occasional Paper, Australian Government Publishing Service.
Canberra, Australia.

PARKINSON S, FINNIE J, HORN D and LOTTMAN R (1992). Procedure to calculate

the economic benefit of increased pavement life resulting from port of entry operations
in Idaho. Transportation Research Record No.1359. Transportation Research Board.
Washington, USA.

PEYTON WB (1989). Construction of low cost, heavy duty flexible pavements in

Victoria, Australia. Proceedings of International Conference and Exhibition on Road
Transport. Beijing, China.

PORTER KF, TINNI A and BETHUNE J (1994). Whole-of-life analysis concepts applied
to Australian pavement options. 17th ARRB Conference, Queensland. Australian Road
Research Board, Victoria, Australia.

POWELL WD (1988). Road trials and design considerations for heavy duty roadbase
macadams. Proceedings 16th PTRC Transport and Planning Summer Annual Meeting
(Seminar F). University of Bath, England.

PRAKESH SI, SINGH SSP and PRAKESH SA (1998). Maintenance cost studies for
pavements. Indian Highways Vol. 26. Indian Roads Congress. New Delhi, India.

QUEENSLAND DEPARTMENT OF TRANSPORT (1992). Life-cycle economic analysis

of low volume roads. Queensland Department of Transport. Brisbane, Australia.

RADA GR and WITCZAK MW (1987). Project level PMS life cycle cost model for
flexible pavements. 6th International Conference Structural Design of Asphalt
Pavements, University of Michigan, Ann Arbor, Michigan, USA.

RAVIRALA V and GRIVAS DA (1995). State increment method of life-cycle cost

analysis for highway management. Journal of Infrastructure Systems, Vol. 1 No.3.
American Society of Civil Engineers. New York, USA.
PIARC . 133 . 08.09.B - 2000
RHODES AH (1990). Reducing whole life costs. Highways and Transportation.
Institution of Highways and Transportation. London, England.

RICKARDS I (1989). A review of the potential benefits of thick asphalt pavements. 27th
ARRB Regional Symposium, Launceston, Tasmania. Australian Road Research Board,
Victoria, Australia.

RILETT LR, HUTCHINSON BG and HAAS RCG (1989). Cost allocation implications of
flexible pavement deterioration models. Transportation Research Record No. 1215.
Transport Research Board. Washington, USA.

SARAF CL, KENNEDY JC, MAJIDZADEH K AND DUDLEY SW (1991). Life-cycle cost
analysis of Ohio pavement rehabilitation demonstration projects. Transportation
Research Record No. 1307. Transport Research Board. Washington, USA.

SCHOLL LG, NEGRETE RC and BROOKS EW (1990). Evaluation of performance and

cost-effectiveness of thin pavement surface treatments. Interim Report no 2. Federal
Highway Administration. Washington, USA.

SEBAALY PE, LANI S and EPPS JA (1994). Development of life-cycle analyses based
on PMS data. Proceedings of the 17th ARRB Conference, Queensland. Australian Road
Research Board. Victoria, Australia.

SHAHIN MY, STOCK C and BECKBERGER L (1994). Comparing pavement

performance and its effect on maintenance and rehabilitation cost. 3rd International
Conference on Managing Pavements. Transportation Research Board. Washington,
USA.

SHARAF EA, SHAHIN MY, TALAAT, M (1988). Consequences of delayed pavement

maintenance on the life-cycle cost of maintenance alternatives. Proceedings 3rd IRF
Middle East Regional meeting: towards better road performance. February 1988.
Riyadh, Saudi Arabia.

STATTON JE AND KADAR P (1990). The Callington ALF trial. 28th ARRB Regional
Symposium, Toowoomba, Queensland. Australian Road Research Board. Victoria,
Australia.

TAUNK GS (1998). Rigid pavement vs. flexible pavement. Indian Highways. Vol. 26.
Indian Roads Congress. New Delhi, India.

TEMPLE WH and BOLEWARE DA (1989). Life-cycle cost and loading characteristics of

AASHO designed rigid and flexible pavements in Louisiana (1965-1989). Transportation
Research Record No. 1215, Transport Research Board. Washington, USA.

TEMPLE WH, CUMBAA SL and BOLEWARE DA (1989). Life cycle, cost, and loading
characteristics of AASHO designed rigid and flexible pavements in Louisiana. Federal
Highway Administration, Washington, USA.

UDDIN W (1997). Service life economic analysis for pavement design and maintenance
planning. Proceedings of the 13th World Meeting of the International Road Federation.
Transportation Association of Canada. Ottawa, Canada.

PIARC . 134 . 08.09.B - 2000

UDDIN W, CARMICHAEL RF and HUDSON WR (1987). A methodology for life cycle
cost analysis of pavements. 6th International Conference Structural Design of Asphalt
Pavements, University of Michigan, Ann Arbor, Michigan, USA.

UNDERWOOD C (1988). Early surface dressing optimises structural maintenance

budgets. Road Surface Dressing Association. Croydon, England.

VAN DAM TJ and THURSTON DL (1994). Selection of preferred pavement design

alternatives using multi-attribute utility analysis. Transportation Research Record
No.1455. Transport Research Board. Washington, USA.

VERVENNE PJ AND JANSSENS R (1990). Valorisation of road maintenance

techniques by using standardised items recorded in a price data base. Proceedings 6th
Conferenceof the Road Engineering Association of Asia and Australasia. Kuala Lumpar,
Malaysia.

VLATAS DA and SMITH RE (1989). Implications of life-cycle performance

specifications. Transportation Research Record No. 1215. Transport Research Board.
Washington, USA.

WITCZAK MW and MIRZA MW (1992). Microcomputer analysis for project level PMS
life cycle cost studies for rigid pavements. Department of Civil Engineering, Maryland
University, Maryland, USA.

WORLD HIGHWAYS/ROUTES DU MONDE (1996). Costing a life. Route One

Publishing Ltd, Sutton, England.

XIE WEIHONG, HAN LIANMIN and DENG WEIRUI (1998). Analysis method on
pavement life cycle cost. Proceedings of the 3rd International Conference on Road and
Airfield Pavement Technology, Information Institute of Science and Technology. Beijing,
China.

ZAHGOUL SM (1996). Effect of poor workmanship and lack of smoothness testing on

pavement life-cycle costs. Transportation Research Record No.1539. Transportation
Research Board. Washington, USA.

PIARC . 135 . 08.09.B - 2000

 ANNEXES
APPENDICES

PIARC . 137 . 08.09.B - 2000

APPENDIX 1

MEMBERS OF SUB-COMMITTEE C8-3

Chairman
UNITED KINGDOM
Mr. Graham BOWSKILL,
Highways Agency, London

Report Drafting Sub-Group

CANADA-QUBEC
M. Nelson RIOUX,
Ministre des Transports du Qubec

UNITED KINGDOM
Mr. Richard ABELL,
Transport Research Laboratory

UNITED STATES OF AMERICA

Ms. Linda PIERCE,
Washington Department of Transportation

Sub-Committee Members
AUSTRIA
Mr. Johann LITZKA,
Technische Universitt Wien

AUSTRIALIA
Mr. Ian REEVES,
Dpartment of Main Roads, Queensland

CANADA-QUBEC
M. Nelson RIOUX,
Ministre des Transports du Qubec

UNITED STATES OF AMERICA

Ms. Linda PIERCE,
Washington Department of Transportation

FRANCE
M. Franois VERHEE,
Euravia Services

PIARC . 138 . 08.09.B - 2000

FRANCE (EUROBITUME)
M. Andr STAWIARSKI,
Groupement Professionnel des Bitumes

HONGRIE / HUNGARY
Mr. Laszlo GASPAR,
Institute for Transport Sciences Ltd

ITALIE / ITALY
Prof Aurelio MARCHIONNA,
Universita di Roma III

JAPON / JAPAN
Dr. Masaru MIZOBUCHI,
Research Institute, Tokyo

MAROC / MOROCCO
M. Ahmed MRHIZOU,
Directeur du CTR de FES

PAYS-BAS / NETHERLANDS (EAPA)

Mr. Harry ROOS,
VBW-Asfalt

POLOGNE / POLAND
Mr. Dariusz SYBILSKI,
Roads and Bridges
Research Institute

PORTUGAL
M. Alberto GARRIDO,
TG7, Urb. Ralone

ROUMANIE / ROMANIA
Prof Stelian DOROBANTU,
University of Bucharest

ROUMANIE / ROMANIA
Mr. Florin DASCALU,
National Administration of Roads

ROYAUME-UNI / UNITED KINGDOM

Mr. Richard ABELL,
Transport Research Laboratory

SUDE / SWEDEN
Dr. Safwat SAID,
Road and Transport Research Institute

PIARC . 139 . 08.09.B - 2000

 SWITZERLAND
Dr. Markus CAPREZ,
Swiss Federal Institute of Technology

Comments On Report Received

SPAIN
Mr. Juan Francisco LAZCANO ACEDO,
Ministerio De Fomento

UNITED KINGDOM
Mr. Douglas COLWILL,
Transport Research Laboratory

UNITED STATES OF AMERICA

Mr. Cesar QUEIROZ,
The World Bank

PIARC . 140 . 08.09.B - 2000

APPENDIX 2

GLOSSARY OF TERMS
Terms Associated With Whole Life Costing
Deterministic Analysis
Analysis which takes no account of variability and uncertainty in the input data and
analysis procedures.

Probabilistic Analysis
This approach combines probability descriptions of analysis inputs with computer
simulations to generate the entire range of outcomes as well as the likelihood of
occurrence.

Risk Analysis
See Probabilistic Analysis.

Sensitivity Analysis
An analysis which attempts to discern the effect on a forecast caused by variations in
the underpinning assumptions.

Net Present Cost (NPC)

The discounted value of expected costs. NPC is calculated by discounting the future
costs using the selected discount rate:
N

Ct
NPC = t
(1 + r / 100)
t=1

where N = analysis period

r = discount rate (%)
t = year of cost
Ct = cost in year t

Whole Life Costs

The lifetime costs from acquiring, owning, operating, maintaining and disposing of an
asset, with these costs reduced to a common base called the Net Present Cost.

Annualised Equivalent Cost (AEC) or Equivalent Uniform Annual Cost (EUAC)

The discounted life cycle costs converted to the uniform annual cost that would sum to
the Net Present Cost over the analysis period.

PIARC . 143 . 08.09.B - 2000

The method of determining AEC is first to determine the NPV and then use the following
formula to convert it to AEC:
n
NPV (1 + r/ 100)
AEC =
n
(1 + r /100) - 1
where r = discount rate
n = analysis period

Life-Cycle Cost
See whole life cost.

User Costs
These costs incurred by road users. In whole life cost analyses for road pavements,
these are generally the extra costs incurred due to roadworks or the condition of the
pavement. User costs typically are an aggregation of three separate components:
Vehicle Operating Costs (VOC), Accident Costs, and User Delay Costs.

Design Life
The pavement life to be achieved before strengthening.

Serviceable Life
The life of an asset until its functional, physical, technological, economic, social and
legal life (whichever is sooner) dictates replacement.

Analysis Period
The period over which life cycle costs are calculated.

Evaluation Period
See Analysis Period.

Pay Back Period

The time it takes the revenue resulting from an investment to pay back the cost
involved. A simple payback period does not consider the time value of money. A
discounted payback period does.

Benefit-Cost Ratio
The ratio of discounted net benefits to initial costs.

Discount Rate
The rate at which costs and benefits occurring in the future are converted to present day
values. The discount rate may be in nominal terms where both the effects of inflation
and real earning power of money are reflected or in real terms where the effects of
inflation are excluded. Nominal discount rates are normally used in whole life cost
analyses.

PIARC . 145 . 08.09.B - 2000

 Internal Rate of Return (IRR)
The discount rate necessary to make the Net Present Value equal to zero. The IRR may
provide useful information when budgets are constrained or there is uncertainty about
the value of the discount rate.

(Bt - Ct)
0= t
(1 + r / 100)
t=1

where N = analysis period

r = Internal Rate of Return (%)
t = year of cost/benefit
Bt = benefits in year t
Ct = costs in year t

Net Present Value (NPV)

The discounted monetary value of expected net benefits (i.e. benefits minus costs).
NPV is computed by discounting future benefits and costs using the selected discount
rate, and subtracting the sum total of discounted costs from the sum total of discounted
benefits.
N

(Bt - Ct)
NPV =
t
(1+r/100)
t=1

where N = analysis period

r = discount rate (%)
t = year of cost/benefit
Bt = benefits in year t
Ct = costs in year t

Salvage Value
See Residual Value.

Residual Value
The monetary value of an asset at the end of the analysis period.

Terms associated with Road Maintenance Work

Thin surfacing
A thin (less than 30mm) layer of bituminous material applied directly to an existing
pavement surface or after planing off the top of the pavement.

Routine maintenance
Minor maintenance works carried out on a cyclic basis (e.g. drain and sign cleaning) or
in response to localised minor defects (e.g. patching).

PIARC . 147 . 08.09.B - 2000

Structural maintenance
Periodic application of maintenance works to preserve or restore all or some of the
serviceability characteristics (safety, comfort, structure) of a pavement, without any
increase in service life or functional characteristic (geometry, traffic, etc.)

Traffic Management
Measures used to guide traffic through roadworks sites to achieve a smooth low risk
flow of traffic.

Reconstruction
Removal of the existing pavement and rebuilding the road along the same alignment.
Partial reconstruction involves removal of the existing pavement above the sub-base.

Overlay
Maintenance which consists of spreading and compacting bituminous or concrete
material on an existing pavement in one or more layers, each up to 100mm thick.

Resurfacing
Process consisting of removing the existing pavement surface and replacing with new
material without increasing the total pavement thickness by more than 50mm.

Surface dressing
Spreading of bitumen binder and covering with aggregates, on the surface of a pavement.

PIARC . 149 . 08.09.B - 2000

APPENDIX 3

QUESTIONNAIRE SURVEY
World Road Association (PIARC)

Technical Committee on Flexible Roads (C8)

Whole Life Performance

English Questionnaire
A blank copy of the questionnaire is provided on the following pages.

This Committee has set up a Task Group to study the Whole Life Performance of
highways and, in order to carry out this task, we would appreciate your help in
completing this questionnaire.

The aim is that this exercise will involve close collaboration with Technical Committee
TC7: Concrete Roads.

This questionnaire is seeking to establish current practices, and attitudes, to pavement

design construction and maintenance and, particularly, to the use of Whole Life
Performance in setting standards or in the assessment of competing tenders.

Please tick () the appropriate boxes of the questionnaire and add any comments that
you consider are relevant.

Where choices are provided for answers please tick the box reflecting the main position
of your country. Please explain under the comments sections provided where there are
regional variations or where there are differences between state and private road
operators.

Always Sometimes Rarely Never

Finally, it would be helpful if you could provide a short summary of your national position
concerning the whole life performance of road pavements and list any current research
on the topic. This will be used to compile a report for publication in Routes/Roads

Thank you for your help in this matter.

PIARC . 151 . 08.09.B - 2000

 Please return the questionnaire to:

Graham J Bowskill
Highways Agency
Room 3/37 St Christopher House
Southwark Street
London SE1 0TE
UK

Tel: 44 171 921 4746

Fax: 44 171 921 4519
E-Mail: graham.bowskill@highways.gov.uk

Part 1 Whole Life Performance

1 Are whole life costs taken into account in establishing standards for Construction
thickness and life for road pavements?

Always Sometimes Rarely Never

(a) Asphalt
(b) Concrete
Comments:

2. Are you actively researching whole life costs for use in future standards?

Always Sometimes Rarely Never

Comments: (Please provide an outline of your work)

3. On what type of project is whole life costing used?

Always Sometimes Rarely Never

(a) New construction
(b) Major rehabilitation
(c) Routine maintenance
Comments:

PIARC . 153 . 08.09.B - 2000

4. How are alternative types of pavement construction selected for new road projects?

Always Sometimes Rarely Never

(a) Lowest works/agency cost of construction
(b) Works/agency cost + allowance for
cost of future maintenance
(c) Whole life cost [as for (b) plus
allowance for road user costs]

(d) Other e.g. non quantifiable factors

such as environmental aspects
(please specify)
Comments:

5 Is whole life costing used

Always Sometimes Rarely Never

(a) For motorways/interstate freeways?
(b) Primary/national (non motorway) network?

(c) Local road network?

Comments:

6. How are maintenance options of existing road pavements assessed?

Always Sometimes Rarely Never

(a) Lowest works/agency cost of maintenance
(b) Works/agency cost + allowance for cost
of future maintenance

(c) Whole life cost [as for (b) plus allowance

for road user costs]

(d) Other e.g. non quantifiable factors

such as environmental aspects
(please specify)
Comments:

PIARC . 155 . 08.09.B - 2000

7. Is a Whole Life Cost procedure used for all forms of construction
(pavements and other elements of road construction)?

Always Sometimes Rarely Never

(a) Pavement
(b) Drainage
(c) Subgrade/foundationimprovements
(d) Other e.g. bridges
Comments:

8. Do whole life cost procedures include an allowance for the following future
maintenance needs?

Always Sometimes Rarely Never

(a) Rehabilitation
(i) Reconstruction of worn
out pavement
(ii) Strengthening maintenance
(b) Application of new road surface

(c) Application of thin anti-skid

treatments
(d) Crack/joint sealing
(e) Localised patch repair
(f) Other (Please specify):
Comments:

9. If whole life cost procedures include an allowance for road user costs, please indicate
which costs are considered.

Always Sometimes Rarely Never

During Road Maintenance Works
(a) Additional time costs for road users
delayed at
road maintenance works
(b) Vehicle accident costs at roadworks
sites

PIARC . 157 . 08.09.B - 2000

During Normal Operation
(c) Journey time costs for road users.

(d) Are these adjusted to reflect varying
pavement condition during the
whole life cost evaluation period?

(e) Vehicle accident costs?

(f) Are these adjusted to reflect varying

pavement condition during the
whole life cost evaluation period?

(g) Vehicle operating costs (e.g. fuel,

vehicle maintenance etc)
(h) Are these adjusted to reflect varying
pavement condition during the
whole life cost evaluation period?

Comments:

10. To what extent are road user costs applied (as identified in Q 9)?

Always Sometimes Rarely Never

(a) Network level
(b) Project level
(c) Other (please specify)
Comments:

PIARC . 159 . 08.09.B - 2000

11. Are works/agency costs and road user costs given the same weighting in whole life
cost analyses?

Always Sometimes Rarely Never

Different weightings as follows:
user costs ______%
works/agency costs ______%
Each set of costs kept separate in the
assessments
Comments:

12 At a project level, how is the requirement for future maintenance determined?

Always Sometimes Rarely Never

(a) Engineering judgement
(b) Deterministic performance models
for estimating condition

(i) Dependent on traffic intensity

(ii) Dependent on time
(iii) Dependent on other factors
(Please specify)
(c) Probabilistic performance models
(d) Other (please specify)
Comments:

PIARC . 161 . 08.09.B - 2000

13. At a network level, how is the requirement for future maintenance determined?

Always Sometimes Rarely Never

(a) Engineering judgement
(b) Deterministic performance models
for estimating condition

(i) Dependent on traffic intensity

(ii) Dependent on time
(iii) Dependent on other factors
(Please specify)
(c) Probabilistic performancemodels
(d) Other (please specify)
Comments:

14. Do you update your performance models by checking actual maintenance carried out
against predictedneeds?

Always Sometimes Rarely Never

If models regularly updated,
state typical frequency: ____ years
Comments:

15. Is the residual life of the pavement included in the assessment of whole life costs as
a measure of structural condition?

Always Sometimes Rarely Never

(Residual life is a measure of the remaining life of the pavement structure
before rehabilitation is needed).
Comments:

PIARC . 163 . 08.09.B - 2000

16 How are future costs dealt with where maintenance works/agency and road user
costs occur in different years?

Always Sometimes Rarely Never

(a) Discounted cash flow
(i) If so, at what annual discount rate (%)? ___% ___% ___% ___%
(ii) Is this rate applied to the full
assessment period?
(b) Other (please specify)

17. What evaluation period do you use for calculating whole life costs in the following
situations?

(a) New construction projects -

concrete pavements ___ years
- asphalt pavements ___ years
(b) Maintenance projects
- concrete pavements ___ years
pavements ___ years
(c) Network evaluation ___ years

18. Do you evaluate the asset (pavement) condition and/or its value at the end of the
evaluation period?

Always Sometimes Rarely Never

If so, how do you do this? (please specify)

19. To what uses are whole-life-costs put?

Always Sometimes Rarely Never

(a) Assessment of innovative products
(b) Establishing new standards
(c) Comparing design options

(d) Setting maintenance standards

(e) Comparing contractor construction
alternatives
(f) Comparing budget options
(g) Other (please specify)

PIARC . 165 . 08.09.B - 2000

20. Are optimum whole life costing needs considered in budget allocations?

Always Sometimes Rarely Never

Comments:

Part 2 Methods of Determining Pavement Residual life

21. How do you measure the condition of a road pavement? Indicate which techniques
are used and whether they are used as part of a network condition assessment or at a
detailed level for individual projects.

Network Project
(a) Measurement technique
(i) Visual condition
- manual systems
- automated recording/manual interpretation
- automated recording/auto interpretation
(ii) Profile - longitudinal
(iii) Profile - transverse
(iv) Texture
(v) Skid resistance - high-speed (over 50 kph)
(vi) Skid resistance - low-speed
(vii) Benkelman beam
(viii) Deflectograph
(ix) Falling Weight Deflectometer
(x) Other (please specify)
(b) Analysis of condition data to determine residual
life. Does this include?

(i) Surface condition

(ii) Structural condition
Comments:

PIARC . 167 . 08.09.B - 2000

2.2 How is the residual life used?
Yes No
(a) As part of a general index of pavement
condition e.g. PSI, PCI
(b) To represent structural condition only
(c) Other (please specify)

2.3 You have now completed the questionnaire. Please circle which of the following most
closely describes your role:

(a) Construction Manager, Designer, Maintenance Manager, Researcher, Contractor, Other

(b) National Highway Administration, Regional Highway Administration, Engineering

Consultancy, Construction Company (State owned or private), University, Other

Would you wish to be involved in future discussions of whole life performance?

Yes No

Preferred contact name and address for further questions or discussions:

Name -
. Company/Employer -
Address -

Please return the completed questionnaire to:

Graham J Bowskill
Highways Agency
Room 3/37
St Christopher House
Southwark Street
London SE1 OTE
UK
Tel: + 44 171 921 4746
Fax: + 44 171 921 4519
E-Mail: graham.bowskill@highways.gov.uk

Thank you for taking the time to complete this questionnaire

PIARC . 169 . 08.09.B - 2000

ANNEXE 4 / APPENDIX 4
REPONSES AU QUESTIONNAIRE /
RESPONSES TO THE QUESTIONNAIRE
Les personnes ayant rpondu au questionnaire sont les suivantes :
PAYS NOM / NAME ORGANISATION / ORGANIZATION COUNTRY
Algrie Ouzrourou Belkacem C.T.T.P Algeria
Allemagne Dr Knepper Institut de recherche fdral Germany
des autoroutes
Australie Ian Reeves Department of Main Roads, Australia
Queensland
Australie John Bethune Australian Asphalt Association Australia
Autriche W Pichler Technikum Krnten Austria
Autriche Hans Litzka I.U.T., Vienne Austria
Canada Qubec Nelson Rioux Transports Quebec Canada-Quebec
Espagne Angel Garcia-Garay Ministre de lquipement Spain
Etats-Unis Linda Pierce Ministre des transports de lEtat de United States
Washington
Finlande Esko Ehrola Universit dOulu Finland
France Yves Gidoux SETRA France
Grce A Mouratidis Universit Aristote de Greece
Thessalonique
Hongrie Lszlo Gspr Institut des sciences du transport Hungary
Sciences, Budapest
Isral Shimon Nesichi Ministre de lquipement, Israel
Tel Aviv
Italie Alberto Bucchi Universit de Bologne Italy
Japon Ikeda Takuya Institut de recherche de Japan
lquipement
Norvge Sigmund Dorum Administration des ponts Norway
et chausses
Pays-Bas Jan Swart Direction gnrale The Netherlands
de lquipement et de la gestion des
eaux
Pologne Dariusz Sybilski Institut de recherche des ponts et Poland
chauses
Portugal Manuel Prates JAE - Construcao Portugal
Portugal Alberto Garrido TG7, Urb. Ralone Portugal
Rpublique tchque V Neuvirt Nievelt-Labor Praha Czech Republic
Rpublique tchque Alena Zemnkov Frantiek Luxemburk Czech Republic
Roumanie Flora Dosclu Administration des ponts Romania
et chausses
Royaume-Uni Graham Bowskill Agence routire, Londres United Kingdom
Sude John Lang Administration sudoise Sweden
des ponts et chausses
Suisse Markus Caprez I.U.T. fdral suisse Switzerland
Thalande Pipan Khurhiran Centre de dveloppement et de Thailand
recherche des ponts et chausses
Ukraine Yvgeny Prusenko I.U.T. Kharkov des ponts et Ukraine
chausses
PIARC . 171 . 08.09.B - 2000
APPENDIX 5

ANALYSIS OF
THE QUESTIONNAIRE RESPONSES
Part 1: Whole life performance
The main points from the responses to each question are briefly described below. For
each question, the number of replies, from the total of 29, providing each answer is
included.

Question 1: Are whole life costs taken into account in establishing

standards for construction thickness and life for road
pavements?

Always Sometimes Rarely Never

Asphalt 5 10 5 8

Concrete 7 7 5 8

There is little direct information on how design standards have been established but
most countries appear to have standards for design lives of new pavements. In most
cases the design life is 20 years for asphalt pavements and 30 to 40 years for concrete
pavements. It appears that whole life costing is used primarily for the comparative
evaluation of asphalt and concrete pavement alternatives, particularly for high cost
projects. Lack of accurate data is one of the reasons given for not always using whole
life costing.

Some specific points:

Austria Only mechanical and structural parameters have been considered in

deriving pavement thickness design standards.

Greece There are no concrete roads.

Hungary Design standards for new pavements taking whole life costs into
account are currently being developed.

Israel There are no concrete roads. A 20 year design life for asphalt
pavements has been based on literature surveys and economic
analyses.

PIARC . 173 . 08.09.B - 2000

Question 2: Are you actively researching whole life costs for use in future
standards?

Research in this area is being carried out in several countries with positive responses
from 14 organisations. Brief descriptions of the work being carried out in some of the
countries are:

Algeria Study of costs of construction and costs to the road users. Use of the
World Bank HDM III model for maintenance schemes.

Germany Comparison of pavement design types and long-term pavement

performance.

England Identification of optimum design lives for pavements, development of

whole life cost models for bridges and earthworks, development of
network management models and use of a whole life cost approach
in a new pavement management system for national roads.

Australia Pavement performance and assessment of maintenance treatments,

application of whole life cost models (including HDM III) inclusion of
other factors in whole life cost models (e.g. noise), use of
probabilistic whole life costing models for the prediction of the
performance of heavy duty pavements.

Canada - Qubec Work mainly consists of keeping up with technology and reviews of
recent literature.

Greece Semi-empirical methods of pavement design which implicitly allow for

whole life costs and design studies for pavement construction which
take into account long-term performance of materials and structures.

Hungary Development of a pavement design standard including whole life cost

aspects.

Israel Development of a network level pavement management system

including consideration of life cycle issues.

Poland Some work on whole life costing is being carried out for the
assessment of innovative products.

PIARC . 175 . 08.09.B - 2000

Romania Development of a methodology for carrying out a cost-benefit
analysis of road safety works, calculation of the bearing capacity and
residual life of the road, load transfer across joints in concrete roads
and inclusion of environment protection costs with vehicle operating
costs.

Switzerland Modelling behaviour of asphalt and concrete roads.

Ukraine Investigation of transportation costs depending on road condition, the

economic loss due to budget deficits, the definition of levels of
charges and operating costs of roads is being carried out to compare
the expenditure on roads with other government investments.

Question 3: On what type of project is whole life costing used?

Always Sometimes Rarely Never

New Construction 5 16 3 3

Major rehabilitation 4 10 8 4

Routine maintenance 1 6 7 12

None of the countries have a general policy to take whole life costs into account, either
for pavement construction or maintenance. Question 1 showed whole life costs are
used widely to compare asphalt and concrete options. In general, whole life costing
which takes into account future maintenance costs (and sometimes user costs) is used
mainly for new construction if the projects costs are high, the work is privately financed
or the projects are funded by a major international funding agency. However, budget
restrictions can sometimes result in the selection of a non-optimal alternative.

Whole life costing is not seen as important for routine maintenance work because costs
are generally low. With major maintenance, costs are generally lower than for new
construction and, often, alternative choices are limited, (e.g. rehabilitation of highways in
Japan is limited to one option involving milling and overlay). Where the major
maintenance work costs are high, whole life costing may be considered for the
comparison of options, (e.g. in Canada, whole life costs are used for projects costing
more than C$1M).

Only Germany and Poland said whole life costing is not used but Australia and USA
suggested approaches were different between States. In the USA, whole life costing in
some form is generally used in all states.

PIARC . 177 . 08.09.B - 2000

Question 4: How are alternative types of pavement construction selected for
new road projects?

Always Sometimes Rarely Never

a) Lowest works/agency cost of construction 7 13 4 4

b) Works/agency cost + allowance for cost of 2 15 6 4

future maintenance

c) Whole life cost [as for (b) + allowance for 1 7 9 7

road user costs]

(d) Other (e.g. Non-quantifiable factors) 3 10 3 7

Whole life costing is often considered for the initial selection between asphalt and
concrete pavement types but not very often then used for evaluating actual alternative
tenders for the new pavements. In most countries, the selection of new road projects is
based either on lowest initial works cost or lowest cost including an allowance for future
maintenance. The latter option is more likely to be used for high cost or long life
projects. User costs are currently included in the evaluation only in a small number of
countries although it appears that the subject is being debated in other countries (e.g.
USA).

Different countries consider various other factors. Some of the external factors
considered are:

Germany Use of recycled materials and noise mitigation

England Noise mitigation

Australia Reduction of noise and vehicle water spray

Austria Environmental costs related to fuel consumption

Japan Vehicle operating costs

Netherlands Use of recycled materials

Portugal Noise mitigation and contamination of aquifers

Ukraine Ecology, safety, use of local materials and industrial wastes

Noise was generally identified as a major influence on road projects.

PIARC . 179 . 08.09.B - 2000

Question 5: (On what road types) is whole life costing used?

Always Sometimes Rarely Never

Motorways/interstate freeways 11 9 4 4

Primary/national (non-motorway) network 6 9 9 4

Local road network 1 8 6 14

Whole life costs are mainly considered for high cost new construction projects that are,
principally, motorways.

Question 6: How are maintenance options for existing road pavements

assessed?

Always Sometimes Rarely Never

(a) Lowest works/agency cost of construction 7 13 3 1

(b) Works/agency cost + allowance for cost of 3 13 6 2

future maintenance

(c) Whole life cost [as for (b) + allowance for

road user costs] 1 7 9 6

(d) Other (e.g. non-quantifiable factors) 1 7 6 7

As with new pavements, maintenance options are evaluated on the basis of lowest
works costs or lowest works cost with some allowance for future maintenance. There is
limited use of road user costs in the evaluations.

Noise, safety requirements (e.g. reduction in vehicle water spray) use of recycled or
waste materials, traffic disruption (particularly urban areas) and roadworks duration are
given as the main non-quantifiable factors.

Where pavement management systems are in use or under development (e.g. UK,
USA, Israel) the facilities to deal with future maintenance costs and road user costs are
included.

PIARC . 181 . 08.09.B - 2000

Question 7: Is a whole life cost procedure used for all forms of construction
(pavements and other elements of road construction)?

Always Sometimes Rarely Never

i) Pavements 5 15 5 3

ii) Drainage 3 4 8 13

iii) Subgrade/foundation improvements 3 4 11 10

iv) Other (e.g. bridges) 4 12 5 7

Whole life costing is used mainly for evaluating construction and major maintenance
options for pavements and maintenance options for bridges. It should be noted that the
approach is not adopted for drainage and foundation improvements.

Question 8: Do whole life cost procedures include an allowance for the

following future maintenance needs?

Whole life costing is mainly applied on major maintenance (strengthening) schemes (i.e.
rehabilitation, strengthening treatments) and sometimes for the application of new
surfaces. Crack sealing and patch repairs are treated on an annual basis.

Always Sometimes Rarely Never

Rehabilitation

i) Reconstruction of worn out pavement 5 12 5 5

ii) Strengthening maintenance 5 12 5 5

Application of new road surface 6 9 8 5

Application of thin anti-skid treatments 2 8 4 14

Crack/joint sealing 5 5 3 15

Localised patch repair 3 5 6 14

Question 9: If whole life cost procedures include an allowance for road user
costs, please indicate which costs are considered?

Road user costs are considered by only a few countries. These costs consist mainly of
user delay costs at roadworks and the journey time and vehicle operating costs incurred
during normal operation. Journey time costs and vehicle operating costs are generally
related to pavement condition.

PIARC . 183 . 08.09.B - 2000

The costs of accidents are included in whole life cost analyses less frequently. One of
the reasons for this is the difficulty in putting a value to accidents.

The role of user costs did not appear to be clear. Only Japan said that user costs have
a definite role, in the choice of materials.

Always Sometimes Rarely Never

During Road Maintenance Works:

Additional time costs for road users delayed at 4 8 5 5

road maintenance works

Vehicle accident costs at roadworks sites 3 3 6 10

During Normal Operation:

2 8 4 8
Journey time costs
2 9 3 7
Are these costs adjusted to reflect varying
pavement condition during the whole life cost
analysis period?

2 5 4 10
Vehicle accident costs
0 4 4 12
Are these costs adjusted to reflect varying
pavement condition during the whole life cost
analysis period?

4 6 3 9
Vehicle operating costs
2 4 5 8
Are these costs adjusted to reflect varying
pavement condition during the whole life cost
analysis period?

Question 10: To what extent are road user costs applied (as identified in
Question 9)

Always Sometimes Rarely Never

a) Network level 5 6 4 8

b) Project level 3 8 7 4

User costs are applied at the network level and project level in a total of 14 countries
with 6 countries including them at both levels and 4 countries at only one level (e.g. in
Israel user costs are included within the network level pavement management system
while in the USA, whole life costing is used only at the project level to compare
pavement construction options).

PIARC . 185 . 08.09.B - 2000

For road network analyses, the evaluation is normally based on the sum of the initial
and future works costs.

Question 11: Are works/agency costs and road user costs given the same
weighting in whole life cost analyses?

Always Sometimes Rarely Never

Works/agency costs and user costs given the 6 4 5 5
same weighting

10 6 3 3
Works/agency costs and user costs are kept
separate in assessments

Where used, works and user costs are generally given the same weighting. Where the
weightings are different, the actual values vary between different countries. Thailand
and Sweden give greater weighting to user costs (60%) than works costs (40%), while
the Netherlands, Finland, Portugal and Switzerland give greater weighting to works
costs.

Works and user costs are calculated separately. User costs are sometimes used as a
separate decision criterion (e.g. in Japan, it is used sometimes to rationalise the use of
expensive materials).

Question 12: At a project level, how is the requirement for future maintenance
determined?

Note: Each country appears to have interpreted future maintenance quite differently
and the answers may not refer to predicting a future profile for use in whole life cost
analyses.

Always Sometimes Rarely Never

Engineering judgement 10 10 4 2

Deterministic Performance Models for

estimating condition

Dependent on traffic intensity 7 10 5 4

Dependent on time 4 13 4 5

Dependent on other factors 4 5 2 5

Probabilistic Performance Models 0 5 3 11

Future maintenance requirements are determined from both engineering judgement and
deterministic performance models based on traffic, time and other factors:

Germany Financial aspects (costs) are considered

PIARC . 187 . 08.09.B - 2000

Australia Historic performance is taken into account

Canada-Qubec Evaluations are based on the anticipated life of each treatment;

performance curves are being developed

USA Pavement condition (rutting, ride, cracking)

Japan Forecast surface characteristics (national highways, national

expressways and trunk highways are surveyed at between 1 and 3
year intervals)

Netherlands Subsoil, construction type and surfacing

Romania Climate

Sweden Trend analysis, traffic loading and climate

Switzerland Financial aspects (costs) are considered

Thailand Urban or local roads

Ukraine Durability, air temperature, moisture content of foundation,

freeze/thaw cycles

Question 13: At a network level, how is the requirement for future

maintenance determined?

Always Sometimes Rarely Never

Engineering judgement 9 11 2 3

Deterministic Performance Models for

estimating condition

Dependent on traffic intensity 4 12 5 4

Dependent on time 3 11 4 4

Dependent on other factors 2 5 4 7

Probabilistic Performance Models 2 6 4 10

Future maintenance requirements at the network level are determined is a similar way
to those at the project level. Israel is developing a pavement management system for
network level analysis. In England network whole life cost models are being developed
for use in national and local networks of trunk roads. There is a greater use of
probabilistic models at this level.

PIARC . 189 . 08.09.B - 2000

Question 14: Do you update your performance models by checking actual
maintenance carried out against predicted needs?

Always Sometimes Rarely Never

Update performance models by comparing 6 9 7 2
maintenance carried out and maintenance
predicted

Most countries update their performance models by checking actual maintenance

carried out against predicted maintenance needs. Frequencies for updating the models
can be summarised as:

Updating frequency (years)

On-going 1-3 4-6 7-9 >9
Number of countries 1 8 4 0 1

Germany is currently developing a database using data from the 3 year routine surveys.
In Hungary, 61 trial sections have been monitored since 1991 to build data for
performance models. Updating is expected to be part of the pavement management
system under development in many countries.

Question 15: Is the residual life of the pavement included in the assessment
of whole life costs as a measure of structural condition?

Always Sometimes Rarely Never

Residual life included in the assessment as a 7 12 4 5
measure of structural condition

The residual life concept is used in a majority of the countries.

Austria Residual life is used to compare asphalt and concrete construction

alternatives.

Israel Residual life concept is included within the pavement management

system under development

Japan Residual life is currently not used, but is being researched. Falling
Weight Deflectometer measurements may be used to determine
residual life.

Portugal Residual life is used only in the evaluation of large projects.

PIARC . 191 . 08.09.B - 2000

Question 16. How are future costs dealt with where maintenance
works/agency and road user costs occur in different years?

Always Sometimes Rarely Never

Discounted cash flow 14 6 2 2

Is the rate applied to full assessment period? 14 2 0 1

Discounting is used in many of the countries and where used it is usually applied
throughout the assessment period. The annual discount rates used vary between 3 to
12%, distributed as shown below:

Annual Discount Rate (%)

0-3 4-6 7-9 10-12
Number of countries 3 8 5 4

In Austria, the difference between the interest rate and inflation rate is used. In
Romania, the discount rate is based on the inflation rate. An annual discount rate is
expected to be included in the pavement management system being developed in
Israel, the actual value is yet to be decided. There was no link in the data to assign the
discount rates used to the pavement type being analysed.

Question 17: What evaluation period do you use for calculating whole life
costs in the following situations?

Evaluation Period (years)

Number of countries 0-10 11-20 21-30 31-40 >40
New construction
- Asphalt 1 14 5 3 0
- Concrete 1 4 9 6 0

Maintenance
- Asphalt 5 10 1 1 0
- Concrete 8 4 3 2 0

Network evaluation 4 4 4 1 1

Evaluation periods are variable but in general, new construction projects are evaluated
over a longer period than maintenance projects and concrete pavements are evaluated
over longer periods than asphalt pavements. Network evaluation periods vary over a
wide range from 3 to more than 40 years.

PIARC . 193 . 08.09.B - 2000

Particular points made in the replies are:

France Evaluation periods are a function of the road hierarchy

Japan No decision has yet been made on evaluation periods to be used for
whole life costing, but it is expected to be in the region of 40 to 50
years.

Netherlands Evaluation periods are specific to particular analyses and therefore

difficult to compare

Question 18: Do you evaluate the asset (pavement) condition and/or its value
at the end of the evaluation period?

Always Sometimes Rarely Never

Evaluate asset condition and/or value at the 4 8 6 7
end of the evaluation period

Some of the methods used to evaluate the asset value at the end of the evaluation
period are:

England Asset value is related to the residual life

Austria Used for comparing different construction types with different design
lives and is calculated from the percentage of remaining life related
to the costs of new construction

Canada - Qubec Residual value is proportional to the cost of the last major
intervention multiplied by the proportion of the residual life in relation
to the life of this last major intervention

USA Asset value is estimated within the pavement management system

France Asset value is estimated as the cost of works required to restore the
pavement to its "as new" condition

Israel Salvage value is estimated within the pavement management system

Japan It is planned to use FWD data to determine asset value (cf.: Residual
life)

Norway Asset value is based on structural evaluation and visual condition

data

Czech Republic Based on visual condition data

PIARC . 195 . 08.09.B - 2000

Switzerland Asset value is based on a Standard (SN 640 733 b)

Thailand Asset value is estimated to be 50% of initial construction cost

Ukraine Asset value is based on defects and visual condition assessment

Question 19: To what uses are whole life costs put?

Always Sometimes Rarely Never

Assessment of innovative products 3 10 8 4

Establishing new standards 2 8 8 6

Comparing design options 6 13 4 1

Setting maintenance standards 3 7 8 5

Comparing contractor construction 6 9 7 2

alternatives

Comparing budget options 4 9 6 4

The main use of whole life costing is for the comparison of design options (asphalt and
concrete) at different stages of the tendering process. Whole life costing is also used to
consider environmental effects.

Question 20: Are optimum whole life costing needs considered in budget
allocations?

Always Sometimes Rarely Never

Optimum whole life cost needs considered in 3 7 7 7
budget allocations

This facility is included in pavement management systems but is rarely used at present.
Hungary plans to use include whole life cost considerations for budget allocations in the
near future. In Japan, the Ministry of Construction takes into consideration long-term
costs when preparing 5-year road improvement plans. Canada-Qubec uses a
pavement management system for the prioritisation of the available budget and
optimisation of constrained budgets rather than whole life costing.

PIARC . 197 . 08.09.B - 2000

Part 2: Methods Of Determining Residual Life
Question 21: How do you measure the condition of a road pavement? Which
techniques are used and are they used as part of a network
condition assessment or at a detailed level for individual
projects?

Network Project
Measurement technique
Visual condition:
manual systems 18 2
automated recording/manual interpretation 10 11
automated recording/automated interpretation 7 6
Longitudinal profile 19 22
Transverse profile 16 20
Texture 10 11
High-speed skid resistance 10 14
Low-speed skid resistance 4 13
Benkelman beam 2 10
Deflectograph 8 6
Falling Weight Deflectometer 11 21
Other 3 2
Residual life evaluation based on:
Surface condition 13 13
Structural condition 12 17

Other techniques identified were: Dynaflect, video surveys and the Curviameter

In France, at the network level, a global indicator (within a scale of 0 to 20) is used to
represent condition. The indicator is based on surface and structural condition and the
cost of restoring to as new condition.

The high numbers of responses showing use of high and low speed skidding resistance
at the project level, suggests the question has not been understood.

Question 22: How is the residual life used?

Yes No
Residual life is used
as part of general condition index 9 15
to represent structural condition only 11 8

Residual life is seen to contribute to assessments of both general condition and

structural condition.

PIARC . 199 . 08.09.B - 2000