Chapter 5

CHAPTER 5
ECONOMIC EVALUATION
5.1
General
The economic evaluation methodology for the bridge construction project under
Phase II of the project is basically the same with that during the Phase I with some
additional assumptions applied on a case-to-case basis. Basically, the economic
evaluation is carried out by comparing the economic cost of the project with the
economic benefit which will be brought about by the bridge construction.
The following three indicators are considered to assess the project viability:
Economic Internal Rate of Return (EIRR)

Net Present Value (NPV)
Benefit/Cost Ratio (B/C)
5.2
Basic Assumptions and Considerations
5.2.1
Implementation Schedule
As discussed in Chapter 8, the project is proposed to be implemented with
the following schedule:
Year 2008
2009-2010
2010-2011
2011-2012
2012-2015
:
:
:
:
:
Project Preparation
Procurement of Consultant
Detailed Engineering Design
Procurement of Contractors
Construction of bridges
The construction of each bridge is variable dependent on the length of

bridge, location and structure type. Maximum construction period of each
bridge is assumed not to exceed two (2) years.
5.2.2
Project Life
The economic life of the project is assumed to be 25 years (2014-2038),
although the physical life of the bridge is much longer. The economic
viability of the bridge construction/improvement shall be evaluated within
the period of 25 years.
Implementation Program
Urgent Bridge Construction Project for Rural Development (UBCPRD), Phase II
5-1
5.3
Conversion into Economic Project Cost

In order to convert the financial bridge improvement/construction costs and other
cost estimates considered for economic evaluation into economic cost, the
following basic assumptions were considered:
1. The tax component that is deducted from the financial cost estimate is taken at
15% following the general assumption accepted by NEDA;
2. Some cost component does not reflect the true economic value since there are
other outside factors that affect the price behavior such as the foreign cost
component and the cost for skilled labor. Shadow pricing for foreign cost
component and skilled labor cost component, again, following the general
assumption accepted by NEDA, is applied. It is estimated that about 30% of
the total project cost is the foreign cost component while 5% consist of cost
for skilled labor. The conversion factors for shadow pricing for these
component is 1.2 and 0.8, respectively;
3. Some cost estimates during the Phase I of the study in 2001 was considered
and applied in the economic evaluation such the EMK values, the restoration
cost per kilometer for temporary bridges, the fare rates for passengers and
vehicles in using boat or raft to cross the river, etc. These costs were
converted into December 2007 prices by applying the Consumer Price Index
for local cost component and the percentage increase/decrease in the value of
US dollar between the period for foreign cost component. It can be noted that
local prices increased by about 5% from 2001 to 2007 while the dollar rate
decreased by about 74% between this period, thus, a slight decrease in the
total price is estimated.
5.4 Project Benefits

The following are the different types of benefits considered and quantified for
economic evaluation:
1. VOC savings from replacement of permanent bridge with new bridge
Construction of new permanent bridge replacing the existing dilapidated
permanent bridge will reduce probability of bridge un-serviceability and saves
vehicle operating cost required for detours.
2. VOC savings from increase in load limit
Heavy vehicles that are currently not allowed to pass the existing bridge with
load limit due to its dilapidated condition will now be able to pass the newly
constructed one and result to savings in vehicle operating costs required for
passing the detours.
5-2
3. VOC savings from replacement of temporary bridge.

Construction of the new permanent bridge replacing the temporary bridge will
reduce the probability of bridge un-serviceability saving the vehicle operating
costs of light vehicles required to pass the detour routes.
4. VOC savings from construction of new bridge where there is no other way to
cross the river.
The construction of new bridge to cross a river where there is no other way to
cross will result to savings in vehicle operating costs for vehicles that are
required to pass the detour routes. In case of fording, the savings in vehicle
operating costs incurred by vehicles from the existing situation to the situation
where there is a new bridge in good condition is quantified.
5. VOC savings from the reduction of bridge un-serviceability due to flooding
The bridge construction works including the raising of bridge elevation and
river protection works will reduce the risk of bridge un-serviceability due to
flooding and saves vehicle operating cost required for vehicles to pass the
detours.
6. VOC savings from widening of bridge (from single lane to 2 lanes)
Vehicle encounters at a single lane bridge cause a slowing or stopping of
vehicles passing one or both directions. VOC savings resulting from
eliminating this slowing or stopping of vehicles will be accounted as one of
the bridge benefits.
7. VOC savings from widening of bridge (from 2 to 4 lanes)
Increase in traffic volume will reduce travel speed of vehicles on a heavily
traveled bridge. VOC savings derived from increase in travel speed by
widening the bridge is also accounted as benefit.
8. Maintenance cost savings
Newly constructed permanent bridge has lesser maintenance requirements
compared to the existing dilapidated existing temporary bridge which requires
frequent maintenance and repair works. Here savings in maintenance cost is
also accounted as bridge benefit.
9. Savings in transport cost for using other modes of transport in crossing the
river
5-3
River-crossings along the secondary national road which has no connection to

other road at its end and does not form part of the road network has no detour
route. Road users are obliged to cross the river using boat or raft. The
benefits derived from construction of new bridge will be in the form of
savings in transport cost from using water transport to road transport.
10. Loss of business opportunity due to bridge closing/flooding
In case of flooding when the bridge is rendered impassable for a period of
time until the bridge is restored, it is expected that some portion of the
existing traffic chooses suspend their usual social and economic activities and
wait till the bridge will be opened in cases where there is no available detour
route than to pass the river using other transport mode. The lost economic
opportunity is quantified as the economic benefit of constructing the new
bridge.
The above benefits are quantified for each type of existing bridge as follows:
Type of
Existing
(1)
(2)
(3)
(4)
Bridge
No Structure
Ford Crossing
Spillway
Timber/Bailey
Bridge
Permanent
Bridge with
Load Limit
Permanent
bridge
Note: () Only selected bridges are applicable.
5.5
(5)
(6)
(7)
(8)
(9)
(10)
()
()
()
()
()
()
Benefit Calculation
5.5.1 Basis of Calculation

1) Vehicle Operating Cost (VOC)
Most of the benefits accruing from road and bridge project are in the form of
savings in VOC, which consists of running costs, fixed costs and time costs.
The basis of calculation of savings in VOC is the latest estimate of DPWH by
vehicle type and surface condition as shown in Table 5.5-1
5-4
Table 5.5-1 ESTIMATED ECONOMIC VEHICLE OPERATING COSTS

(MARCH 2008 PRICES)
5-5
2) Traffic Volume in terms of Average Annual Daily Traffic (AADT)

Existing traffic volume of each bridge is estimated based on the result of
actual traffic count conducted under the nationwide traffic count program
(NTCP) and information gathered from regional/district offices and validated
during the actual bridge investigation conducted for this project.
In some cases where there is no bridge structure, opening year traffic is
estimated. Traffic estimation is divided into two: passenger and cargo traffic.
Passenger traffic is estimated based on assumption that 50 passenger trips is
generated per 1,000 population. Cargo traffic is estimated based on total
production of surplus commodities within the direct influence area and
average per capita consumption of general commodities. Total passenger
traffic is converted into motor vehicle traffic based on the vehicle composition
of traffic along the adjacent road and the estimated vehicle occupancy of 3
passengers for cars, 2 passengers for pick-up/vans, 50 passengers for big bus,
1 passenger for motorcycle and 3 passengers for tricycles. Refer to Appendix
5.5-1 Annual Average Daily Traffic
3) Traffic Growth Rates
Traffic growth rates were estimated by region on the basis of the standard
formula used by DPWH considering income growth rate, compound
population growth rate and elasticity of demand for public private and truck
transport. The income growth rate is based on the projected GRDP growth
rate based on past trend. The compound population growth rate is based on
the NSO population projection under medium assumption and the elasticity of
demand for transport is obtained from DPWH estimates.
The estimated regional traffic growth rates for private, public and cargo
transport is shown in Table 5.5-2 below.
5.6
Benefit Calculation
1) VOC savings from replacement of permanent bridge with new bridge
Construction of new bridge will reduce the probability of bridge collapse and
entailing bridge un-serviceability which requires vehicles to take the longer
detour route. The differences in vehicle operating cost between the detour
road and the regular road is considered as benefit.
5-6
Table 5.5-2 Estimated Traffic Growth Rates by Region
a. Probability Model of Bridge Un-serviceability

The model used to measure the annual probability of bridge unserviceability is assumed to follow a normal distribution with the
following parameters:
F(x) = N(m.2) = N[50, 16.72]
= ___ 1___ x EXP (t-m)2
22
22
where,
F(t) = Probability o f bridge un-serviceability at year t

m = Average bridge life (50 years)
= Standard deviation (16.7 years)
b. Bridge Age
Residual life of bridges differs by structure type, traffic volume, geography,
present structural conditions and other factors even calendar age is the same.
Since the bridges identified for reconstruction in this study are already in the
advanced stage of dilapidation, their physical lives are assumed to have
elapsed. Hence, the age of bridges proposed for reconstruction in this study
is set at 50 years.
The of probability densities for bridge at the age of 50 years and newly
constructed bridge in comparison with the original probability densities are
shown in Table 5.6-1
5-7
c. Duration of Bridge Un-serviceability

In order to estimate the duration of un-serviceability of bridges, the number
of months required for bridge construction was assumed as a function of
bridge length as follows:
Log (M) = 0.572 log(L) + 0.043
Where: M = Standard number of months required for bridge
Construction
L = Bridge length (m)
All the bridges under the study are assumed to be reconstructed within two
(2) years, hence, the maximum value of M is set at 24.
d. Calculation of Benefit
The benefit of VOC savings from replacement of permanent bridge with
new bridge is calculated from the following equation:
Bx = [(fo(x)- fw(x))*d*AADTxi*(DLo*VOCoi-DLw*VOCwi) +
(fo(x)- fw(x))]*C
Where:
Bx
fo(x)
=
=
fw(x)
d
AADTxi
DLo
DLw
VOCoi
=
=
=
=
=
VOCwi
Benefit at year x
Probability of bridge un-serviceability in year x for
without project case
Probability of bridge un-serviceability in year x for with
project case
Number of days required for bridge reconstruction
Average Annual Daily Traffic of vehicle type i in year x
Length of detour route (km)
Length of regular route (km)
Vehicle operating cost of vehicle type i along detour route
(p/km)
Vehicle operating cost of vehicle type i along regular
route (p/km)
Bridge reconstruction cost
5-8
Table 5.6-1 PROBABILITY DENSITIES OF PERMANENT BRIDGES

Original Probability
New Bridge
Bridge at Age 50
Year
Density
(With Project) (Without Project)
51
2.3846%
0.0270%
4.8862%
52
2.3718%
0.0323%
4.8599%
53
2.3506%
0.0384%
4.8166%
54
2.3213%
0.0455%
4.7565%
55
2.2842%
0.0538%
4.6804%
56
2.2396%
0.0633%
4.5890%
57
2.1880%
0.0743%
4.4833%
58
2.1299%
0.0868%
4.3643%
59
2.0660%
0.1011%
4.2333%
60
1.9968%
0.1173%
4.0915%
61
1.9230%
0.1356%
3.9403%
62
1.8453%
0.1563%
3.7812%
63
1.7644%
0.1794%
3.6154%
64
1.6811%
0.2052%
3.4446%
65
1.5959%
0.2339%
3.2701%
66
1.5096%
0.2657%
3.0933%
67
1.4229%
0.3007%
2.9156%
68
1.3364%
0.3391%
2.7383%
69
1.2506%
0.3810%
2.5625%
70
1.1661%
0.4265%
2.3895%
71
1.0835%
0.4758%
2.2201%
72
1.0031%
0.5289%
2.0554%
73
0.9254%
0.5858%
1.8961%
74
0.8506%
0.6465%
1.7429%
75
0.7790%
0.7110%
1.5963%
Total
42.4697%
6.2113%
87.0225%
2) VOC Savings from Increase in Load Limit
For temporary bridges, the following load limits is assumed:
Bailey Bridge
Load Limit 5t
Timber Bridge :
Load Limit 3t
Trucks are not allowed to cross the

bridge.
Trucks and Buses are not allowed to
cross the bridge.
The same traffic regulation is applied for permanent bridges with load limit.
The benefits are calculated as follows:
5-9
Bx
=
AADTxi =
DLo
DLw
VOCoi
=
=
=
VOCwi
Benefit at Year x
Average Annual Daily Traffic of vehicle type I (Truck, Bus) in
year x
(p/km)
Vehicle operating cost of vehicle type i along regular route
(p/km)
3) VOC Savings from Replacement of Temporary Bridges

a. Probability Model of Bridge Un-serviceability
For bailey and timber bridges, more linear behavior on the probability of
bridge collapse is used considering that the lives of these bridge types are
very short as compared with permanent ones.
The physical lives of bailey and timber bridges is assumed as follows:
Bailey Bridge :
Timber Bridge :
7 years
5 years
The short physical life of temporary bridges is attributed not only to rapid
dilapidation of the bridge component but also due to the high risk of
bridge washout during rainy season. An annual probability of bridge unserviceability is assumed to be distributed uniformly over physical life
period.
b. Physical Age of Existing Bridges
It may be unusual that all existing temporary bridges are new ones, they
are rather constructed at a certain period of time before. With the absence
of reliable data, the average physical age of existing bridges is assumed as
follows:
Bailey Bridge :
Timber Bridge :
2 years
3 years
The probability density of timber and bailey bridge are shown in Table
5.6-2 together with the probability of newly constructed bridge.
5-10
Table 5.6-2 PROBABILITY DENSITIES OF BRIDGE UNSERVICEABILITY FOR TEMPORARY BRIDGES

Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Total
New Bridge
(With Project)
0.0270%
0.0323%
0.0384%
0.0455%
0.0538%
0.0633%
0.0743%
0.0868%
0.1011%
0.1173%
0.1356%
0.1563%
0.1794%
0.2052%
0.2339%
0.2657%
0.3007%
0.3391%
0.3810%
0.4265%
0.4758%
0.5289%
0.5858%
0.6465%
0.7110%
6.2113%
Timber Bridge
(Without Project)
33.3333%
33.3333%
33.3333%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
20.0000%
539.9999%
Bailey Bridge
(Without Project)
25.0000%
25.0000%
25.0000%
25.0000%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
14.2857%
399.9997%
c. Duration of Bridge Un-serviceability

The period required for the restoration of collapsed/washed out temporary
bridges are estimated as follows:
Bridge Length
(m)
5.20
20.30
30.50
50.100
101.150
151.200
201.250
251.300
301.350
351-
Period of Restoration
(days)
30
40
60
77
90
100
108
115
120
125
5-11
In the previous feasibility study for the Phase I of the project in 2001, the
cost of restoration is roughly estimated at P50,000 per meter. However,
since the construction materials used for restoration of temporary bridges
are mainly locally sourced and considering that the US dollar value has
already gone down by about 75% while the local price has increase by
about 5%, the present restoration cost per meter is estimated at P48,000.
d. Calculation of Benefit
The VOC savings from replacement of temporary bridge are calculated
from the following equation:
Bx = [(fo(x)- fw(x))*d*AADTxi*(DLo*VOCoi-DLw*VOCwi) +
(fo(x)- fw(x))]*C
Where:
Bx
fo(x)
=
=
fw(x)
AADTxi
DLo
DLw
VOCoi
=
=
=
=
VOCwi
Benefit at year x
Probability of bridge un-serviceability in year x for
without project case
Probability of bridge un-serviceability in year x for with
project case
Number of days required for reconstruction of temporary
bridge
(P/km)
route (P/km)
Bridge restoration cost
Buses and trucks are excluded among the traffic for timber bridges while
trucks are excluded among the traffic for bailey bridges, since these
vehicles are not allowed to pass the temporary bridges.
4) VOC Savings from Construction of New Bridge where There is No Way to
Cross the River
In cases where the river has high water depth or is located along a deep ravine
that prevents all types of vehicle from crossing the river even by ford crossing,
vehicles have to take detour route all year round.
The VOC savings from this situation to that with the new bridge is calculated
as follows:
5-12
Bx = [AADTxi*(DLo*VOCoi-DLw*VOCwi)]*365
Where:
Bx
AADTxi
DLo
DLw
VOCoi
=
=
=
=
=
VOCwi
Benefit at year x
(P/km)
route (P/km)
5) VOC Savings from Reduction in Bridge Un-serviceability due to Flooding

Typhoons or heavy rains during the rainy season cause flood along the rivers,
rendering the bridges to be temporarily unusable. The bridge construction
works including the raising of bridge elevation and river protection works will
reduce risk of bridge un-serviceability due to flooding.
The equation used in calculating the benefits derived from the reduction of
risk in bridge un-serviceability due to flooding is:
Bx = AADTxi*d*(DLo*VOCoi-DLw*VOCwi)
Where:
Bx
=
AADTxi =
d
=
DLo
DLw
VOCoi
=
=
=
VOCwi
Benefit at year x
Average number of days impassable along the regular
route due to flooding
(P/km)
route (P/km)
The average number of days impassable along the regular route due to
flooding is estimated based on the interview with the residents near the
concerned bridge.
6) VOC Savings from Bridge Widening (from single lane to 2 lanes)
Vehicle encounters at a single lane bridge cause slowing or stopping of
vehicles in either one or both directions.
5-13
The total incremental traffic costs, composed of running, fixed and time costs,
are calculated on the basis of the basic traffic costs and the unit penalties in
the form of dl-values and deceleration, acceleration, crossing time and waiting
time.
The equation shown below are the formulae used, based on the DPWH
Highway Planning Manual, for the calculation of incremental traffic costs on
an annual basis in P1,000.
Incremental Running and Fixed Costs:
RF =
1.7934 (A*2*B +C*(D-2*B)+E*F) + 0.005862

(D*G+2*B*H+I*(D-2*B)+2*B*J)
Incremental Time Costs:

T = 0.004104 (D*G+2*B*H + I*(D-2*B)+2*B*J)
Where:
RF
T
A
B
C
D
E
F
G
H
I
J
=
=
=
=
=
=
=
=
=
=
=
=
Running costs plus fixed costs (inP1,000)

Time costs (inP1,000)
dlencounter
Number of encounters per day
dlnon-encounter
AADT
dlwaiting
Number of waiting vehicles per day
Crossing time in seconds
Deceleration + acceleration encounters in seconds
Deceleration + acceleration non-encounters in seconds
Waiting time in seconds
The values for the variables in the given equations are taken/derived from the
Tables given in Chapter 5 of the Guidelines on Economic Evaluation of
Design Standards of Pavement and Bridges (Highway Planning Manual,
Volume 7), October 1982.
7) VOC Savings from Bridge Widening (from 2-lanes to 4-lanes)
Travel speed of vehicles on a bridge will be remarkably reduced when the
traffic volume reaches the capacity of the carriageway. The increase in travel
time in crossing the bridge due to reduction of travel speed will entail
additional traffic cost. This incremental cost derived from bridge widening
that is considered as savings will be accounted as benefit.
5-14
Travel time is calculated based on speed-volume relationships assumed as

follows:
V1
V2
V3
V1
V2
Q1
Q2 Q3
V3
Traffic Volume
Q1
Q2
Each travel speed is assumed as follows: Q3
=
=
=
=
=
=
V1
V2
V3
Bus/Truck
=
=
=
Car/Jeepney
All vehicles
All vehicles
= 60 km/h
= 30 km/h
= 10km/hr
free-flow speed
speed at capacity
minimum speed
10% of capacity
capacity
110% of capacity
= 50 km/hr
Traffic capacity is estimated as follows:

2-lane existing bridge
4-lane new bridge
24,000 vehicles/day
68,000 vehicles/day
The benefit derived from widening of bridge is calculated as follows:

Bx = RCox+FTCox-(RCwx-FTCwx)
Where:
Bx
RCox
FTCox
RCwx
FTCwx
=
=
=
=
=
Benefit at year x
Running cost of without case in year x
Time and fixed cost of without case in year x
Running cost of with case in year x
Time and fixed cost of with case in year x
RCx = Vli * VOCi * AADTxi * L * 365

Vxi
1,000
FTCx = L__ / Vxi * VOCi * 60 * AADTxi * 365
1,000
Where:
RCx
FTCx
Vli
Vxi
VOCi
=
=
=
=
=
Running cost in year x

Fixed and time cost in year x
Free flow speed of vehicle type i
Travel speed of vehicle type I in year x
Vehicle operating cost of vehicle type i (P/km)
5-15
AADTxi =
L
=

Bridge length (m)
8) Maintenance Cost Savings

Maintenance cost for bridges include routine and periodic maintenance cost.
Savings such maintenance cost by constructing new bridge is accounted as
benefit.
a. Routine Maintenance Cost Savings
Routine maintenance includes sweeping and cleaning of decks, painting of
rails and repairs of deck plates of temporary bridges. The cost of routine
maintenance is computed by multiplying the Equivalent Maintenance
Kilometer (EMK) factors and bridge length.
EMK factor varies depending on the bridge type as shown below:
Bailey
Timber
Concrete
Steel
0.1
0.1
0.01
0.035
The latest EMK constant approved by DPWH as of 2001 was

P75,226/year/km which is converted into 2007 prices at .
The Routine Maintenance Cost savings is calculated as follows:
MCSx = (Lo * EMKx Lw * EMKw) * 75,226
Where:
MCSx
Lo
Lw
EMKo
EMKw
=
=
=
=
=
Maintenance cost savings in year x

Length of existing bridge (m)
Length of new bridge (m)
EMK factor of existing bridge
EMK factor of new bridge
b. Periodic Maintenance
The periodic replacement of timber and bailey bridges includes
replacement of abutments, piers, panels and decks, which are considered
as part of maintenance costs.
The periodic maintenance costs for concrete and steel bridges are almost
negligible since all abutments and piers are assumed to be concrete.
5-16
The estimated maintenance costs for each type of bridge are presented
below.
ESTIMATED ECONOMIC MAINTENANCE COST IN DECEMBER 2007 PRICES (P1,000)
Replacement
Bridge
Frequency
Elements
(Years)
30
1. Timber Bridge
Abutments 5, 10, 15, 20, 25
472.97
Piers
5, 10, 15, 20, 25
657.56
Deck
5, 10, 15, 20, 25
733.21
Total
5, 10, 15, 20, 25 1,863.74
2. Bailey Bridge
Abutments
15
602.28
Piers
10, 20
189.12
Deck
5, 10, 15, 20, 25 1,718.91
Bridge Length (m)

40
50
80
100
150
200
250
472.97
1,131.82
975.03
2,579.81
472.97
1,505.54
1,218.78
3,197.29
472.97
2,438.87
1,950.06
4,861.89
472.97
299.72
2,437.57
5,910.30
472.97
4,679.56
3,657.43
8,809.94
472.97
6,177.01
4,863.18
11,513.16
472.97
7,658.63
6,079.05
14,210.66
602.28
378.25
2,257.33
602.28
567.36
2,935.75
602.28
947.55
4,668.24
602.28
1,136.99
5,695.00
602.28
1,705.65
8,599.39
602.28
2,268.17
11,523.50
602.28
3,016.90
14,058.39
9) Savings in Transport Cost for Using Other Modes of Transport in Crossing the
River
a. Assumptions
River-crossings along the secondary national road which has no
connection to other road at its end and does not form part of the road
network has no detour route. Road users are obliged to cross the river
using boat or raft. The benefits derived from construction of new bridge
will be in the form of savings in transport cost from using water transport
to road transport.
Incremental traffic cost to cross a river using boat is roughly estimated
based on the result of hearing survey at the bridge site currently crossing
with boat/raft. The current fare in riding a boat is averaging P20 per
passenger, the fee for transporting light vehicles in a raft is estimated at
P1,000 per vehicle and the time value in estimating the savings in loss of
time is based on the time cost per minute (converted into per hour basis) as
established by DPWH. The duration of flooding is estimated on the
average to be 14 days.
However, based on actual experiences, not all the traffic choose to cross
the river under this situation, some portion of existing traffic, those with
not-so-urgent trip nature, prefer to wait until the flood subsides. A general
assumption considered is that about 60% of total traffic prefers to cross the
river and 40% prefer to wait.
Average occupancy rate of each vehicle type is estimated as follows:
Car/Van
3.3 persons
5-17
Jeepney
Bus
Truck
15.9 persons
41.2 persons
1 person
b. Passenger Fare Collection Benefit Calculation

The incremental cost due to fare collection from passenger is
Bx
=
(3.3*AADTx1+15.0* AADTx2*41.2* AADTx3*+1*
AADTx4)*20*d*(Fo(x) -Fw(x))+C*(Fo(x) -Fw(x))
Where:
Bx
AADTx1 =
AADTx2 =
AADTx3 =
AADTx4 =
d
=
Fo(x)
=
Fw(x)
Incremental cost due to fare collection

in year x
Traffic volume of car/van in year x
Traffic volume of jeepney in year x
Traffic volume of bus in year x
Traffic volume of truck in year x
Number of days required to restore the bridge
Probability of bridge un-serviceability for existing bridge
in year x
Probability of bridge un-serviceability for new bridge in
year x
Cost of restoring the bridge
The cost of transporting vehicles to cross a river is calculated on the

assumption that there shall be linear relationship with river width. Vehicle
fare for bridges whose river width is less than 50m is assumed to be the
same.
c. Vehicle Fare Collection Benefit Calculation
The incremental cost due to vehicle fare collection is calculated as
follows:
Bx = (500*MAX(0.1,L/500)*AADTx1+(600*MAX(0.1,L/500)*
AADTx2+(1,000*MAX(0.1,L/500)*41.2*
AADTx3,4
*d*(Fo(x)
-Fw(x))
Where:
Bx
=
AADTx1 =
AADTx2 =
AADTx3 =
AADTx4 =
d
=
Benefit in year x
Traffic volume of car/van in year x
Traffic volume of jeepney in year x
Traffic volume of bus in year x
Traffic volume of truck in year x
Number of days required to restore the bridge
5-18
Fo(x)
Fw(x)
Probability of bridge un-serviceability for without project

case in year x
Probability of bridge un-serviceability for with project
case in year x
Bridge length (m)
d. Incremental Cost Due to Los` s of Time Benefit Calculation

An average of 60 minutes per vehicle crossing are estimated to be wasted
for waiting for their turn to board a raft and cross the river. This data is
gathered from the field investigation.
The incremental cost due to loss of time is estimated by the following
equation:
Bx = (VOCi AADTxi)*60*
10)
Where:
Bx
VOCi
AADTxi
d
=
=
=
=
Fo(x)
Fw(x)
L * d*(Fo(x) -Fw(x))
1,000
Incremental cost due to loss of time in year x

Basic time cost of vehicle type i
Traffic volume of vehicle type i in year x
Number of days required to restore/reconstruct
the bridge
Probability of bridge un-serviceability for existing bridge
in year x
Probability of bridge un-serviceability for new bridge in
year x
Bridge length (m)
Loss of business opportunity due to bridge closing/flooding

In case of flooding when the bridge is rendered impassable for a period of
time until the bridge is restored, it is expected that some portion of the
existing traffic chooses suspend their usual social and economic activities
and wait till the bridge will be opened in cases where there is no available
detour route than to pass the river using other transport mode. The lost
economic opportunity is quantified as the economic benefit of
constructing the new bridge.
The value of economic opportunity for passenger vehicle is assumed as
the average monthly income of the local residents which is estimated at an
average of P5,000 per month. The value of economic opportunity for
cargo vehicles is based on the average income of business operation in the
locality served by the bridge which is estimated at an average of P10,000
per month. The duration of bridge closing/flooding is the same as 14
days.
5-19
5.7
Results of Economic Evaluation

The results of the economic evaluation based on the abovementioned methodology for
the 167 bridges are presented in Appendix 5.7-1.
The summary results of the economic evaluation per contract package considered under
UBCPRD, Phase II is presented in Table 5.7-1 below.
Table 5.7-1
Contract
Package
Summary Results of Economic Evaluation per Contract Package

Province
ILOCOS S. 1
ILOCOS S. 2
I LOCOS S. 2
PANGASINAN 5
CAGAYAN 2
II
ISABELA 1
ISABELA 3
N. VIZCAYA
N. VIZCAYA SUB
N. VIZCAYA SUB
AURORA
AURORA
AURORA
AURORA
AURORA
AURORA
AURORA
AURORA
AURORA
BATAAN 2
BULACAN 2
PAMPANGA 1
PAMPANGA 1
BATANGAS I
BATANGAS III
BATANGAS IV
LAGUNA SUB
CAMARINES S 4
ALBAY 3
CAMARINES S. 1
CAMARINES S. 2
SORSOGON 2
Bridge Name
Urdas
San Antonio I
Quinarayan
Villamil
Tulong
Cabagan-Sta.
Maria
Ilot
Maddiangat
Siguem I
Biyoy
Amper
Dibutunan
Diarabasin
Borlongan
Diapalan
Dinadiawan A
Ditawini
Bungo
Gumaninang
Tuyo
Kay Tialo
Pampanga Delta
Cabetican
Cacauan
Pinagtulungan
Dona Alicia
Buenavista
Pagatpatan Coquit
Oas
Quitang
San Jose
Ariman
Length
(km)
81.0
75.0
30.0
112.0
455.0
EIRR (%)
w/o time
NPV
(P1,000)
97.6
19.7
24.0
44.6
33.0
507,552
16,374
20,986
180,025
399,093
600.0
17.3
136,970
35.0
216.0
60.0
160.0
224.0
672.0
180.0
84.0
63.0
84.0
84.0
252.0
63.0
36.0
96.0
240.0
150.0
30.0
40.0
60.0
30.0
75.0
36.0
25.0
60.0
54.0
30.5
31.2
46.9
26.2
23.8
25.2
25.3
25.1
25.7
25.7
25.7
22.5
76.1
30.3
42.3
41.8
20.6
89.4
52.3
68.4
65.8
44.6
23.6
25.0
30.8
21.6
33,262
173,142
121,249
77,514
94,320
266,981
87,132
48,206
41,934
49,835
49,835
84,791
422,865
86,041
396,551
224,416
36,322
142,993
77,548
143,856
76,772
110,218
17,842
12,983
37,763
11,981
5-20
III
NEGROS OCC 1
NEGROS OCC 1
NEGROS OCC 1
NEGROS OCC 1
NEGROS OCC 1
NEGROS OCC 5
CEBU 3
NEGROS OR. 1
NEGROS OR. 1
NEGROS OR. 1
ZAMBO CITY
ZAMBO CITY
IV
ZAMBO SBUGAY
ZAMBO SBUGAY
ZAMBO SBUGAY
ZAMBO SBUGAY
ZAMBO SBUGAY
DAVAO CITY 2
DAVAO CITY 2
DAVAO DS 1
DAVAO DS 2
DAVAO DS 2
DAVAO DS 2
DAVAO DS 2
DAVAO DS 2
DAVAO DS 2
AGUSAN DN 2
AGUSAN DN 2
AGUSAN DN 2
AGUSAN DS 1
SURIGAO DN 1
SURIGAO DN 1
SURIGAO DN 1
Himogaan
Da-an Lunsod
Patun-an
Talave
Madaboy
Hinigaran
Magsaysay
Malaga
Talaptap
La Libertad
Curuan I
Sinunuc II
(Maasin)
Guilinan
Tigbongabong
Madum
Siocon
Pisawak
Panglas
Panalum II
Digos I
Kipanan III
Lamidan
Manguile 1
Manguile 2
Caburan Small
Caburan Big
Buhang
Banza
Paypay Twin
Wawa'
Hinatigan I
Agona-Bangan
San Pedro
140.0
50.0
96.0
34.0
34.0
155.0
120.0
50.0
60.0
150.0
30.0
35.0
20.9
17.5
19.2
28.9
31.4
50.3
18.7
21.6
18.5
41.07
170,427
16,188
10,779
9,536
31,746
128,223
325,892
24,769
46,252
22,761
47,153
46.0
35.48
58,274
68.0
36.0
45.0
140.0
180.0
30.0
30.0
42.0
60.0
60.0
75.0
45.0
30.0
30.0
100.0
90.0
90.0
231.0
32.0
32.0
46.0
26.28
22.46
112.02
117.60
58.33
50.82
53.75
68.19
64.77
32.62
100.53
124.84
128.27
50.82
28.97
107.61
117.21
134.37
41.07
35.48
26.28
38,497
14,995
311,546
302,549
112,078
100,287
102,410
164,989
106,837
34,842
116,582
795,507
722,112
154,594
82,911
136,639
135,445
190,503
47,153
58,274
38,497
5-21

Chapter 5

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CHAPTER 5

Economic Internal Rate of Return (EIRR)

Basic Assumptions and Considerations

The construction of each bridge is variable dependent on the length of

Conversion into Economic Project Cost

5.4 Project Benefits

3. VOC savings from replacement of temporary bridge.

River-crossings along the secondary national road which has no connection to

5.5.1 Basis of Calculation

Table 5.5-1 ESTIMATED ECONOMIC VEHICLE OPERATING COSTS

2) Traffic Volume in terms of Average Annual Daily Traffic (AADT)

Table 5.5-2 Estimated Traffic Growth Rates by Region

a. Probability Model of Bridge Un-serviceability

F(t) = Probability o f bridge un-serviceability at year t

c. Duration of Bridge Un-serviceability

Table 5.6-1 PROBABILITY DENSITIES OF PERMANENT BRIDGES

Trucks are not allowed to cross the

3) VOC Savings from Replacement of Temporary Bridges

Table 5.6-2 PROBABILITY DENSITIES OF BRIDGE UNSERVICEABILITY FOR TEMPORARY BRIDGES

c. Duration of Bridge Un-serviceability

5) VOC Savings from Reduction in Bridge Un-serviceability due to Flooding

1.7934 (A*2*B +C*(D-2*B)+E*F) + 0.005862

Incremental Time Costs:

Running costs plus fixed costs (inP1,000)

Travel time is calculated based on speed-volume relationships assumed as

Traffic capacity is estimated as follows:

The benefit derived from widening of bridge is calculated as follows:

RCx = Vli * VOCi * AADTxi * L * 365

Running cost in year x

Average Annual Daily Traffic of vehicle type i in year x

8) Maintenance Cost Savings

The latest EMK constant approved by DPWH as of 2001 was

Maintenance cost savings in year x

Bridge Length (m)

b. Passenger Fare Collection Benefit Calculation

Incremental cost due to fare collection

The cost of transporting vehicles to cross a river is calculated on the

Probability of bridge un-serviceability for without project

d. Incremental Cost Due to Los` s of Time Benefit Calculation

Incremental cost due to loss of time in year x

Loss of business opportunity due to bridge closing/flooding

Results of Economic Evaluation

Summary Results of Economic Evaluation per Contract Package

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1.7934 (A2B +C(D-2B)+E*F) + 0.005862