HE & PDPR unit 4 MAIN FILE.pptx for work

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1. Highway Economics and Preparation of Detailed Project Report (HE & PDPR) BTCE16F8330

2. HIGHWAY ECONOMICS & PREPARATION OF DETAILED PROJECT REPORT (HE & PDPR)

3. COURSE OBJECTIVES The overall objective of the Course is as follows: 1. To give the students an overview of Economics, its basic terms and concepts, and discuss various types of costs and benefits that economist discuss in transport projects. 2. To educate students the importance of transport economic analysis and edify the basic methods of economic analysis carried for transportation engineering projects. 3. To make the students capable of recognizing a project from different methods of economic analysis by identifying the limitations of each method. 4. To expose the students to the surveys to be conducted and the method of preparing detailed project report.

4. COURSE OUTCOMES CO1: Elucidate the elements of transport economics: highway transportation costs, road user costs and benefits. CO2: Explain the economic evaluation of null alternative, methods of analysis when applied to a group of mutually exclusive alternatives, depreciation cost, accounting methods, salvage value estimation, depreciation and taxes.

5. COURSE OUTCOMES CO3: Associate characteristics and limitations of the different methods of economic analysis, ranking of independent projects, sensitivity analysis. CO4: To appreciate the surveys to be conducted and the method of preparing detailed project report.

6. SYLLABUS: UNIT 4 Highway Economics and Preparation of Detailed Project Report UNIT – 4 Preparation of Detailed Project Report – Introduction, DPR Surveys & Formats, Feasibility report, Road inventories and data Sheets, preparation and presentation of project documents, checklist of major operations involved in the survey and investigation for a road project. Questionnaire for Environmental Appraisal (For Road/Highway Projects), Checklists.

7. UNIT 4 Preparation of Detailed Project Report

8. Introduction Detailed project report is a complete document for investment, decision making, approval, planning. Detailed project report is base document for planning the project and implementing the project.

9. OBJECTIVES To understand the importance of developing a detailed project report that assure performance for reliable quality with in optimum cost To appreciate that projects are site specific To understand importance of optimization of the schemes , detailed cost estimate , payback period and return on investment. To describe how bankable projects can help to achieve required performance To understand methodology of project appraisal

10. Brief Description of Project Area  Name of utility  District / town (s) village covered  Location : latitude and longitude  Area , population , boundaries  Climatic conditions  Status of development. Access to electricity  Economic structure – socio – economic features  urban / rural

11. Data Collection of Existing Project DPR Surveys Reconnaissance Survey Pavement Condition Survey Material Survey Pavement Structural Evaluation Topographic/Levelling Survey Traffic Surveys Inventory and Condition Survey of Bridges and CD Structures Engineering Design Cost Estimates

12. DPR Survey Formats Reconnaissance Survey Methods The reconnaissance survey methods may be conducted in the following sequence: a) Study of topographical survey sheets, agricultural, soil, geological and meteorological maps and aerial photography. b) Aerial photography wherever necessary and feasible, and c) Ground reconnaissance including another round of serial reconnaissance for inaccessible and difficult stretches, where required . Reconnaissance survey is generally not required for the work consisting of improvements to existing roads unless bypass roads are involved.

13. Reconnaissance Survey Reports: Based on information collected during the reconnaissance survey, a report should be prepared. The report should include all relevant information collected during the survey and a plan to the scale of 1:50000 showing the alternative alignments studied along with their general profile and rough cost estimate. It should also discuss the merits and demerits of the different alternatives to help the selection of one or more alignments for detailed survey and investigation. Cont.…DPR Survey Formats Road Inventory and Pavement Condition An inventory of the project road has been carried out by visual observations supplemented with sample measurements using tape etc. Kilometer wise features like terrain, land-use, pavement surfacing type and width, shoulder surfacing type & width, Subgrade, local soil type, curve details, retaining structures details, location of water bodies, height of embankment or depth of cut, ROW, CD structures, road side arboriculture, existing utility services and general drainage conditions etc. were recorded. The road inventory has been referenced to the existing KM posts established along the roadside.

14. Material Survey Soils and materials investigation for a road project is an essential requirement for design and construction. During design stage of the road pavement, embankment and other structures, the existing soils and materials inventory is needed for their characteristics, availability of required quality and sufficient quantity for construction at reasonable cost. The project will require different type of construction materials, which include: Soil for embankment, subgrade and shoulder Granular materials for sub-base, drainage layer and backfill Stone aggregate and sand for pavement courses and cement concrete works Water for use in construction especially in case of cement concrete Grain size analysis : As per IS: 2720(part 4) Atterberg limits : As per IS: 2720(part 5) Moisture-Density test(Heavy Compaction) : As per IS: 2720(Part 8) CBR (Unsoaked, and 4 days soaked) : As per IS: 2720(Part 16) Aggregates tests : IS: 2386(part-4) : 1963, IS: 383-1970, Is 5640 – 1970 Bitumen Binder:: IS: 1209 – 1978, IS: 73 – 2006.

15. Pavement Structural Evaluation The structural strength evaluation of the existing pavements was carried out as per IRC 81: 1997. Pavement sections were cut open from the surface up-to the subgrade level and subgrade soil samples were collected in water proof bags for determination of moisture content, wet sieve analysis to determine classification of soil and also to determine the Consistency limits. Plan of Study Field Studies – BBD studies, Unevenness studies Topographical Survey Topographic survey using total station equipment was conducted and a contour map shall be prepared showing contour line drawn at an interval of 0.5m, it also indicate all the prominent existing features such as roads, railway tracks, colonies, (independent houses also), power lines, water bodies, farms, gardens, fields etc. Few reference stones were marked on the survey map and their levels were enlisted (smaller to larger scales). Providing and fixing of boundary stones at an intervals of 50m and additionally wherever bends occurs was done as per the directions of Engineer In charge. Block levelling Office processing Test pit investigation survey Sub soil investigation Hydrology and Drainage Investigations

16. Traffic Surveys Estimation of traffic over the project corridor is an essential step towards establishing the project viability; the objective was to assess the prevailing traffic characteristics. This includes conducting field traffic surveys, data analysis, estimation of local traffic and diverted traffic. The present traffic surveys have been planned in a way to obtain all the necessary information and data deemed necessary for development of the project. Traffic Volume Studies Spot speed studies Speed & delay studies Parking studies Accident studies

17. SURVEY QUESTIONNAIRE: Location: __________________________________________ Date: ___________________ STANDARD FORMAT ORIGIN-DESTINATION SURVEY Questions Please take a moment to answer a few questions about your trip. Your responses will help determine the need for improvements in this area. 1) Where did your trip begin? City/Town _____________________________ State ______________________ PIN _______ 2) What type of place is your trip start point? ❒ Primary Residence ❒ Workplace ❒ Store ❒ School (I am a student) ❒ Recreation Area ❒ Other _______________________________ 3) Where did your trip end? City/Town _____________________________ State_____________________________ PIN __________ 4) What type of place is your trip end point? ❒ Primary Residence ❒ Workplace ❒ Store ❒ School (I am a student) ❒ Recreation Area ❒ Other _________________________________ 5) What was the purpose of your trip? ❒ Work Commute ❒ Business Related ❒ Shopping ❒ School (attend class) ❒ Recreation ❒ Other ___________________ 6) How many people were in the vehicle, including the driver? ❒ 1 ❒ 2 ❒ 3 ❒ 4 ❒ 5 or More 7) What type of vehicle were you in? ❒ Passenger vehicle (car, motorcycle, SUV, pick-up truck, minivan) ❒ Commercial vehicle ❒Other ____________________________ 8) Do you regularly use this route? ❒ Yes ❒ No 9) Please add any comments on transportation you May have. Comments ___________________________________________________________________________________________ Thank you very much for your cooperation!

18. Engineering Design Analysis of data collected during various engineering surveys/investigations and the formulation of improvement proposals including planning and design of various project components are included in DPR.   Geometric Design of Highway The geometric deficiencies of the project road will be identified from the topographic surveys and improvements will be proposed accordingly, keeping in view the design standards, practical feasibility and land acquisition consideration. Generally, design speeds for Hilly terrains 50 kmph have been adopted. Since Realignments are not proposed, shifting of existing alignment being proposed in the poor geometric sections for improvement of geometrics to be in conformity with the IRC guidelines.   Pavement Design The pavement design includes Overlay design of the existing pavement Benkelman Beam Deflection Test Results and Pavement Condition Survey data as well as close reconnaissance by experts were used to determine the strengthening requirement of existing pavement. The thickness of overlay was proposed judiciously considering the provisions of IRC: 81-1997. Based on Design wheel load, Grade of Concrete, Traffic Intensity, Thin White topping overlay has been designed as per IRC: SP: 76-2015.

19.   Preliminary Cost Estimates The rate of materials adopted in the preliminary cost estimate is based on the basic rates of PW, P & IWTD S.O.R. For items where these rates are not available, the rates were adopted as per Market rates. For the working out of preliminary cost estimate, work items are split into the following sub-heads: Site Clearance and earthworks Granular Pavement Courses Asphalting Works Culverts, Retaining Walls and other structures Drainage and other Protective works Road Furniture and Road Safety Works Traffic Management and maintenance during construction

20. STAGES IN PROJECT PREPARATION The stages involved in the preparation and sanction of road projects are: a) Pre-feasibility study The pre-feasibility study is necessary to enable the funding agency to appreciate the features of the project. This is to be done based on reconnaissance survey by collecting information based on the present status of the road and the anticipated traffic after development/improvement b) Feasibility study /Preliminary project report preparation The feasibility study is intended to establish whether the proposal is acceptable in terms of soundness of engineering design and expected economic benefits from the project for the investment involved. c) Detailed engineering and plan of construction Detailed engineering covers detailed alignment surveys, soil and materials surveys, pavement design studies, drainage studies, environmental management plan based on environmental impact assessment studies (if required), detailed drawings, estimates and implementation schedules and documents.  

21. PROJECT COST DETAILS  Basic Equipment Cost  Consultant charges  Duties , Taxes & Freight a) Excise duty / customs duty/ sales tax  Freight and Transit Insurance  Raw materials  Man Power cost  Engineering Project Management. Supervision  Interest During Construction

22. Project Investment Criteria Basically Cost – Benefits analysis  Investment criteria can be  Payback period  Discounted cash flow (DCF) Technique a) Net Present Worth (NPW) b) Benefit Cost Ratio ( B C Ratio) c) Internal rate of return ( IRR ) Project Investment Criteria Payback Period  length of the time required by the cumulative net cash inflows to cover up the fixed capital investment. PBP = Total Capital Investment / Total cash inflow or Net benefits per year

23. Project Investment Criteria Payback Period  Easy to understand  Other methods are complicated in nature and difficult to comprehend for technical people  Investment should include fixed capital &working capital Net benefits to be adjusted for interest and tax liabilities Discounted Cash Flow ( DCF) Technique  A technique which brings past & future cost benefits to their Present Worth ( PW)  Take into account “ Time Value of Money ’’

24. Project Investment Criteria  Discounted Cash Flow ( DCF)  Past Benefits Cost – Compounding  Future Benefits Cost – Discounting  Past Present Future

25. DPR Structure  Title Page , Name,affliation,date etc  Acknowledgement  Content list  Abbreviation  Executive Summary  Introduction Background  Main technical & financial analysis chapters  Recommended action plan  Appendices

26. What DPR Should ideally provide ?  Final cost details and benefits expected  Detailed specification of equipment & materials.  All information to prepare tender documents.  Probable list of equipment & material manufacturers  Project management process PARAMETERS OF PROJECT APPRAISAL AND APPRAISAL PROCEDURE PROJECT ELIGILITY  Technically feasible and provide optimal cost solution for the selected alternative  Techno – economically sound with IRR not less than 12% ( Internal Rate of Return )  Compatible with expansion plan of the utility & region  Complies with all environmental standards guideline .  All clearances have been obtained

27. ASCERTAIN PROJECT PROFILE  Type , Purpose , Scope  Location , Access to site  Environmental Management  Technology PARAMETERS OF PROJECT APPRAISAL AND APPRAISAL PROCEDURE REVIEW PROJECT Need & Justification :  Existing and proposed system  Demand supply scenario  Alternative considered  Study if any carried out by State Govt / utility  Status & Preparedness  Procurement procedures & competitiveness

28.  status & Preparedness  Procurement procedures & competitiveness  O & M arrangements  Market & selling arrangements a) PPA with purchaser if applicable (Power purchasing agreement)  Financing plan a) Debt Equity b) Phasing of expenditure Cont.…REVIEW PROJECT CHECK AVAILABILITY OF APPROVALS & CLEARANCES Statutory Clearances such as  Land Availability & Acquisition  Forest Clearance  Highway Clearance  Electricity clearance  Fund related clearance  Pollution control board clearance etc.

29. APPROVALS  Board approval  Approval of PPA  CERS / SERC  State government ASSESS REASONABLENESS OF COST  Price level  Basis and reasonableness of cost estimate a) Information available for similar projects appraised in the past b) Budgetary offers received from suppliers c) Similar job done by same / other borrowers in the past Cont.… IDC - Price variation Contingency – Other costs

30. PERFOM FINANCIAL & RISK ANALYSIS Evaluate Costs & Benefits a) Benefits b) Reduction in losses c) Additional Generation in MU  Specify Assumptions of base case . Calculate FIRR, EIRR  Financial Internal Rate of Return  Economic Internal Rate of Return Assess Risks : a) Pre implementation b) Implementation c) Post implementation  Perform Sensitivity & Scenario Building

31. Environmental Impact Assessment Environment impact assessment or initial environment examination be carried out in accordance with ADB’s Environmental Assessment Requirements of ADB 1998guidelines for selected infrastructure projects 1993 as amended from time to time /World Bank Guidelines / Government of India Guidelines, as applicable Reporting Requirements of EIA The consultant would prepare the stand-alone reports as per the requirement of the ADB/World Bank / GOI, as applicable, with contents as per the following: Executive Summary Description of the Project Environmental setting of the project. Identification and categorization of the potential impacts (during pre-construction, construction and operation periods). Analysis of alternatives (this would include correlation amongst the finally selected alternative alignment/routing and designs with the avoidance and environmental management solutions). The public consultation process. Policy, legal and administrative framework. This would include mechanisms at the states and national level for operational policies. This would also include a description of the organizational and implementation mechanism recommended for this project. Typical plan or specific designs for all additional environmental items as described in the scope of work.

32. The EMP (Environmental Management Plan) reports would include the following: Brief description of the project, purpose of the EMP, commitments on incorporating environmental considerations in the design, construction and operations phases of the project and institutional arrangements for implementing the EMP. A detailed EMP for construction and operational phases with recourse to the mitigation measures for all adverse impacts. Detailed plans for highway-side tree plantation (as part of the compensatory afforestation component). Environmental enhancement measure would be incorporated. Enhancement measures would include items described in the scope of work and shall be complete with plans, designs, BOQ (Bill of Quantities) and technical specifications. Environmental monitoring plans during and after construction including scaling and measurement techniques for the performance indicators selected for monitoring. The EMP should be amendable to be included in the contract documents for the works. Incorporating any other as per the suggestions of the ADB/ World Bank/ <GOI>, till the acceptance of the reports by the ADB/ World Bank / GOI as applicable.

33. THANK YOU