part 2 nov 97 revs valuation of costs and benefits · part 2 the valuation of costs and benefits...

________________________________________________________________________________________________ May 2004

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__________________________________ VOLUME 13 ECONOMIC ASSESSMENT OF ROAD SCHEMES SECTION 1 THE COBA MANUAL

__________________________________ PART 2 THE VALUATION OF COSTS AND BENEFITS Contents Chapter 1. The Valuation of Time Savings 2. The Valuation of Vehicle Operating Costs 3. The Valuation of Accidents 4. The Valuation of Accidents on Links 5. The Valuation of Accidents at Junctions 6. Construction Costs 7. The Preparation of Cost Data for Use in

COBA 8. An Example of Scheme Cost Inputs 9. Highway Maintenance 10. Delays During Construction 11. A Summary of the Items of Costs and

Benefits

Volume 13 Section 1 Chapter 1 Part 2 The Valuation of Costs and Benefits The Valuation of Time Savings ________________________________________________________________________________________________

________________________________________________________________________________________________ June 2006 The COBA Manual 1/1

1. THE VALUATION OF TIME SAVINGS 1.1 Changes in the time taken by traffic to pass along links and to pass through junctions in the COBA network are

the major items of the calculated benefit resulting from a road improvement. It is necessary to put a money value on time savings in order to compare these with construction costs and accident and vehicle operating cost savings.

1.2 Three distinct purposes of travel are distinguished in COBA; travel in the course of Work, Commuting (travel

to and from normal place of work) and Other (travel for other non-work purposes). The latest values of time recommended by the DfT for use in most routine economic appraisals of transport projects are provided in WebTAG Unit 3.5.6. 1.3 Deleted. 1.4 Values of working time are estimated for different types of vehicle occupant and are given in Table 1/1. Buses

include coaches; LGVs and OGVs are defined in Part 4 Chapter 5. OGV values apply to OGV1 and OGV2 classes as defined in Part 4 Chapter 5. For car drivers and passengers and bus passengers the value of working time is based on mileage-weighted incomes of a sample of workers to take account of the variation in mileage travelled by workers with different earnings. The data source for mileage weighting is the National Travel Survey. The information in Table 1/1 is taken from WebTAG Unit 3.5.6 but is presented in a form more suitable for use in COBA.

1.5 Deleted. 1.6 Deleted. 1.7 Deleted. 1.8 Deleted. 1.9 Deleted. 1.10 The COBA program has three vehicle purposes and three person purposes. Other goods vehicles (OGV) and

their occupants are appraised in the working purpose only. Analysis of the National Travel Survey (NTS) produces values for average vehicle occupancies and the proportion of car travel in working time. In combination with data from other sources it has also been possible to estimate the proportion of light goods vehicle travel not in working time (but not split between Commuting and Other non-work). Combining the values of time and occupancies produces values of time per vehicle (based on 2000 national average occupancies) as given in Table 1/1.

Chapter 1 Volume 13 Section 1 The Valuation of Time Savings Part 2 The Valuation of Costs and Benefits

________________________________________________________________________________________________ 1/2 The COBA Manual June 2006

Value of time (pence/hour) Type of Vehicle and Purpose

Weekly AverageOccupancy

Occupant Purpose per occupant per vehicle

Working Car 1.00 0.20

driver passengers

Working Working (Ave working occupant)

2186 1566

(2083)

2499

Non-Working Car Commuting

Other

1.00 0.14 1.00 0.85

driver passengers driver passengers

Commuting Commuting Other Non-Work Other Non-Work

417 417 368 368

475

681 Average Car 1.00

0.68 driver passengers

(Derived from above assuming 13.1% of car kilometres are in 'working' mode, 25.3% in 'commuting' mode and 61.6% in 'other' mode)

867

Working Light Goods Vehicle (LGV)

1.00 0.20

driver passengers

Working Working

842 842

1010

Non-Working LGV Commuting

Other

1.00 0.59 1.00 0.59

driver passengers driver passengers

Commuting Commuting Other Non-Work Other Non-Work

417 417 368 368

663

585 Average LGV 1.00

0.25 driver passengers

(Derived from above assuming 88% of LGV kilometres are in 'working' mode, 2.6% in 'commuting' mode and 9.4% in 'other' mode)

961

Other Goods Vehicle (OGV1&2)

1.00 driver Working 842 842

Public Service Vehicle (PSV)

1.00 12.2

driver passengers

Working }Working (2.9%) (Ave working occupant) }Commuting (20.5%) }Other (76.6%)

842 1672

(1059) 417 368 5916

Average Vehicle (Based on 2002 national average vehicle proportions and 2002 occupancies) 930

Table 1/1: Annual Average Values of Time per Person and per Vehicle in COBA

based on 2000 occupancies (2002 values and resource prices)

1.11 The NTS provides data showing how car and LGV occupancies per kilometre travelled varies from hour to hour throughout the week. Table 1/2 shows how these vary by COBA Flow Group (see Part 4, Chapter 7). It is important to remember that because of differences in average trip lengths the occupancy per vehicle kilometre is different from occupancy per trip.



Weekday Weekend

Flow Group 1 2 3 4/5 W/day Ave 6 7 8 9/10 W/end

Ave

All Week Ave

Working Car 1.18 1.20 1.18 1.21 1.20 1.27 1.28 1.31 1.31 1.28 1.20

Non-Work Car Commuting Other

1.13 1.77

1.15 1.76

1.14 1.79

1.15 1.84

1.14 1.78

1.12 1.84

1.15 1.98

1.14 2.00

1.14 2.00

1.14 1.97

1.14 1.85

Average Car 1.61 1.88 1.68

Working LGV 1.20 1.26 1.20

Non-Work LGV Commuting Other

1.46 1.46

2.03 2.03

1.59 1.59

Average LGV 1.23 1.35 1.25

Table 1/2: Car and LGV Occupancies (per km travelled) by Flow Group

1.12 Car occupancy is reducing as income rises and more car passengers become car drivers. This trend is

expected to continue until 2036. The decline is forecast by considering the elasticity of occupancy with respect to car ownership. The predicted annual percentage reductions are given in Table 1/3. The occupancy of all other vehicle types should be assumed to remain unchanged over time.

Rate of Change by Flow Group (% pa) Range of Years Vehicle Mode

1 & 2 3 4 & 5 6 & 7 8 9 & 10

2002 - 2036 Working Cars -0.066 -0.083 -0.083 -0.098 -0.098 -0.098

Commuting Cars -0.064 -0.070 -0.070 -0.059 -0.059 -0.059

Other Cars -0.231 -0.243 -0.243 -0.244 -0.244 -0.244

2036 onwards Working Cars 0 0 0 0 0 0

Commuting Cars 0 0 0 0 0 0

Other Cars 0 0 0 0 0 0

Table 1/3: Compound Annual Rates of Change in Car Occupancies (%) 1.13 The National Travel Survey (NTS) indicates how the proportion of car mileage in work time varies by hour

of the week. Analysing this data with details of the allocation of hours to flow groups (see Part 4 Chapter 7) and car mileage showed how the proportion of car mileage in work time varies by flow group. The proportion defaults are given in Table 1/4.



Proportion of flow in Flow

Group Work Time Commuting Other Non-

Work

Proportion of Annual Flow

1

2

3

4/5

6

7

8

9/10

12.0%

18.5%

16.0%

14.7%

5.3%

2.1%

3.1%

3.1%

36.0%

25.0%

32.8%

47.7%

20.6%

6.7%

5.5 %

5.5%

52.0%

56.5%

51.2%

37.6%

74.1%

91.2%

91.4%

91.4%

9.7%

35.3%

11.9%

14.6%

8.2%

11.0%

4.1%

5.2% Table 1/4: Proportion of Car Mileage by Mode by Flow Group 1.14 Local proportions of cars in work and non-work time can be used where there is statistically reliable local

data. However in the majority of cases it is unlikely that local values will be significantly different from the national. When local data is available it will usually be from 12 hour or 16 hour roadside interview surveys and it will be necessary to convert these to an average weekday. Table 1/5 shows how the national work time proportion varies by time period. The local short period observation can be factored pro rata to obtain the local annual average value.

Proportion of flow in Flow Group

Work Time Commuting Other Non-Work

Average Weekday 16.4% 31.0% 52.5%

7am – 7pm Weekday 17.3% 29.9% 52.8%

Average Weekend 3.2% 8.5% 88.3%

Average Day 13.1% 25.3% 61.6%

Table 1/5: Proportion of Car Mileage in Work Time by Time Period

1.15 Deleted. The Calculation of Time User Costs in COBA 1.16 The stages by which COBA calculates time user costs for the links and junctions in a Do Minimum or Do-

Something network are set out below:

i) traffic flows are disaggregated by vehicle category, (CARS, LGVs etc.) based on the flow of



vehicles in each hour (by flow group - see Part 4 Chapter 8); ii) the flow is further disaggregated by journey purpose, that is, 'work', 'commuting' and 'other non-

work'. OGV trips are all assumed to be in work, PSVs are work vehicles with a non-work passenger element, cars are mainly 'other non-work' (52%);

iii) the hourly flow of vehicles for each link is thus defined by vehicle category, journey purpose, flow

group and year; iv) the time cost per vehicle is a function of the number of occupants (which varies over time for 'other

non-work' cars) and journey purpose; v) the hourly flow of vehicles is converted to an hourly flow of people by multiplying the number of

vehicles by the appropriate occupancy rate;

vi) COBA then calculates time costs by multiplying the ‘flow of people’ by the value of their time. This applies to link transit and junction delay time costs.

Conversion from Resource Costs to Market Prices 1.17 COBA works in resource costs that have to be converted to market prices for presentation in the Transport

Economic Efficiency (TEE) Table. The market price of time is obtained by multiplying the resource value by (1 + t) where t is the average rate of indirect taxation in the economy; in 2002 this was 20.9%.

Volume 13 Section 1 Chapter 2 Part 2 The Valuation of Costs and Benefits The Valuation of Vehicle Operating Costs ________________________________________________________________________________________________


2. THE VALUATION OF VEHICLE OPERATING COSTS

2.1 Differences in the vehicle operating costs (VOC) incurred by traffic using the Do-Something road network

compared to the VOC incurred by traffic using the Do-Minimum network are recorded among the benefits resulting from a road improvement.

2.2 The change in total VOC over all links depends on changes in the distance travelled by vehicles and on

average link speeds. In most schemes the aggregate time saving is positive (as is the overall saving in costs of accidents) but the change in overall VOC can be either negative or positive depending on the balance of changes in distance travelled and speeds.

The latest vehicle operating cost (VOC) parameter values recommended by the DfT for use in economic appraisals of transport projects are provided in WebTAG Unit 3.5.6. 2.3 Deleted. 2.4 Deleted. 2.5 Deleted. 2.6 Deleted. 2.7 Deleted. 2.8 There is no specific allowance in COBA for fuel used at junctions. 2.9 Deleted. 2.10 Deleted. Conversion from Resource Costs to Market Prices 2.11 COBA works in resource costs that need to be converted to market prices for inclusion in the Transport

Economic Efficiency (TEE) Table. Because the resource cost of fuel, fuel efficiency and fleet composition change independently the relationship of resource cost per kilometre to market price changes annually. Consequently the program needs to be informed of the changes in tax rates over time. The 2002 base Fuel Tax Rates (that is, the tax expressed as a proportion of the resource cost) and the predicted changes over time are given in Table 2/3. The information in Table 2/3 is taken from WebTAG Unit 3.5.6 but is presented in a form suitable for use in COBA.

Chapter 2 Volume 13 Section 1 The Valuation of Vehicle Operating Costs Part 2 The Valuation of Costs and Benefits


Vehicle Type

Range of Years Cars LGV/OGV/PSV

Intermediate Final Intermediate Final

2002 Base Tax Rates 277% 345% 249% 310%

Annual Changes (% pa)

2002 - 2003 2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007 2007 - 2099

-8.51 -0.14 6.30 5.62 2.25 0.00

-8.13 -0.13 5.95 5.33 2.15 0.00

-6.06 0.40 6.30 5.62 2.25 0.00

-5.72 0.38 5.92 5.31 2.13 0.00

Table 2/3: Annual Changes in Fuel Tax Rates (%)

2.12 The intermediate tax rate is used to convert the resource cost to the price excluding VAT and the final tax rate converts to the price including VAT. For example, the cost including VAT equals the resource cost multiplied by (1 + final tax rate).

2.13 The tax rates for non-fuel VOC are assumed to be constant over time as they are only affected by VAT. The

VAT rate is assumed to remain constant over time. 2.14 Deleted. 2.15 Deleted. Carbon Emissions 2.16 Carbon emissions should be considered in terms of the change in the equivalent tonnes of carbon released as

a result of implementing a highway scheme, see WebTAG Unit 3.3.5 for further details. Carbon emissions are estimated from fuel consumption in the Do Minimum and the Do Something options. Changes in carbon emissions for the opening year and over the whole appraisal period, as well as the monetary value for carbon emissions over the whole appraisal period should be recorded in the Appraisal Summary Table (AST). The change in tonnes of carbon emitted and the monetary value given to the change has been added to COBA.

Volume 13 Section 1 Chapter 3 Part 2 The Valuation of Costs and Benefits The Valuation of Accidents ________________________________________________________________________________________________


3. THE VALUATION OF ACCIDENTS 3.1 The benefits from a reduction in the number and severity of accidents constitute an important element in the

appraisal of trunk road schemes. It is necessary to put a money value on accident savings so that they are given an appropriate valuation relative to that given to construction costs and to time and vehicle operating cost savings. Standard values are produced for use in valuing the savings of accidents resulting from road improvements and road safety measures. The values used in COBA are derived on the same basis as given in Highways Economics Note No. 1 November 2003 (2002 prices and values). The latest version of HEN1 is available from RS Division, DfT. Table 3/1 details the components of accident costs which in addition to the ‘casualty’ cost include the costs associated with damage to property, insurance administration, police time and an allowance for damage only accidents.

COST PER CASUALTY, £

Fatal casualty Serious casualty Slight casualty

1,249,890 140,450 10,830

COST PER ACCIDENT, £

Damage to Property Insurance

Administration Urban

Rural

Motorway

Fatal accident

Serious accident Slight accident Damage only

230 143 87 42

5977 3203 1890 1352

10136 4620 3063 2019

12894 11002 5566 1941

Police Cost

Urban

Rural

Motorway

Fatal accident

Serious accident Slight accident Damage only

1463 122 44 3

1387 341 44 3

2030 320 44 3

Number of Damage Only Accidents per pia 17.7 7.8 7.6

Table 3/1: Components of Accident Costs (2002 values and prices) 3.2 To determine overall accident costs, details of the average accident severity split (that is, the number of fatal,

serious and slight casualties per accident) and the proportion of fatal/serious/slight accidents are required. Information on the severity split by links and junctions type is given in Part 2 Chapter 4 for links and Chapter 5 for junctions. Note that accidents are classified according to the most seriously injured casualty and that for accident coding purposes ‘rural’ roads are defined as those with a speed limit of more than 40 mph (64 kph). Those with speed limits of 40 mph or below are defined as ‘urban’ roads.

Chapter 3 Volume 13 Section 1 The Valuation of Accidents Part 2 The Valuation of Costs and Benefits


3.3 Details of the average proportion of fatal/serious/slight accidents on links is given in Table 3/2 and at

junctions in Table 3/3. The proportions are based on 1999–2001 data. Accident rates and severity have been reducing over recent years and this trend is expected to continue into the future; see paragraph 4.5 and Table 4/3 in Chapter 4. The forecasting of the proportion of fatal/serious/slight accidents is based on a similar methodology. First, the fatal and serious proportion is forecast by applying the ‘accident rate change coefficient’ given in Table 4/1 in Chapter 4. The sum of these is subtracted from unity to determine slight proportion.

LINK ONLY ACCIDENT PROPORTIONS (2000 Base)

ROAD TYPE ACCIDENT PROPORTIONS ACCIDENT TYPE

Casualty Severity Fatal (f) Serious (se) Slight (sl)

1 – 3 Motorways 0.014 0.096 0.890

Speed Limit 30/40 mph > 40 mph

Casualty Severity f se sl f se sl

4 – 8

9

S2 A Roads Other S2 Roads

0.013

0.009

0.146

0.147

0.841

0.844

0.050

0.027

0.232

0.208

0.718

0.765

10 - 15 Dual Carriageways 0.014 0.140 0.847 0.028 0.159 0.813

LINK AND JUNCTION COMBINED ACCIDENT PROPORTIONS (2000 Base)


1 – 3 Motorways 0.013 0.093 0.894



4 - 8

9


0.009

0.007

0.126

0.126

0.865

0.867

0.038

0.024

0.207

0.198

0.755

0.778


Table 3/2: Proportions of Fatal, Serious and Slight Accidents on Links (Average 1999 - 2001)

Volume 13 Section 1 Chapter 3 Part 2 The Valuation of Costs and Benefits The Valuation of Accidents ________________________________________________________________________________________________


PROPORTIONS OF ACCIDENTS AT JUNCTIONS (2000 Base)



3 Arm Priority 0.0072 0.1240 0.8688 0.0243 0.1883 0.7874

4 and 5 arm Priority 0.0060 0.1162 0.8778 0.0271 0.2064 0.7665

3 Arm Traffic Signals 0.0060 0.1066 0.8874 0.0092 0.1171 0.8737

4 and 5 Arm Traffic Signals 0.0060 0.1069 0.8871 0.0088 0.1153 0.8759

Roundabouts (Standard and Small) 0.0027 0.0746 0.9227 0.0056 0.0912 0.9032

Mini Roundabout 0.0028 0.0868 0.9104 0.0056 0.0912 0.9032

Signalised Roundabouts 0.0031 0.0643 0.9326 0.0039 0.0624 0.9337

Table 3/3: Proportions of Fatal, Serious and Slight Accidents at Junctions (Average 1999- 2001)

3.4 The average accident costs used in COBA will normally be appropriate even where local accident rates

differ from the average. In some circumstances the severity split may differ with a consequent change in average accident costs, but this is only likely to be significant in a few cases. The Overseeing Organisation should be consulted if it is considered necessary to use local severity splits. General policy is to discourage the use of a local severity split unless it can be shown that exceptional conditions genuinely arise which are unlikely to be corrected by modest remedial works.

3.5 In order to accept a local severity split the user must: i) demonstrate that the severity split is significantly different in statistical terms from the COBA

value, and also that this does not result from one or two particularly bad accidents, the effect of which will be evened out by less extreme accidents as time goes by. Data covering all available accident history, with a minimum of five years must be supplied;

ii) arrange an Accident Investigation and Prevention Study by the Local Authority to identify the

causes of the safety problem and recommend remedial safety measures. Where this study concludes that modest remedial works are unlikely to correct the problem then a local severity split may be used. However where modest remedial works are recommended, the cost of these works should be included in the "do minimum" and the revised COBA severity split used.

3.6 Statistics of damage only accidents are not generally available because they are not comprehensively

reported by the police. On the basis of some survey information, these are taken in COBA to occur at the rates given in Table 3/1. These rates are assumed to remain constant over time. The accident costs given in Part 2 Chapter 4 and Chapter 5 include an allowance for damage only accidents at these rates.

3.7 For the purposes of appraisal it is necessary to form a view on how costs will vary over future years. The

value of most elements of accident costs are proportional to national income, and for this reason it is assumed that values change in line with GDP per head. The actual and forecast changes in GDP per head are given in Table 3/4. In accordance with Treasury Green Book guidance these growth rates are decreased after thirty years when the discount rate is reduced. The reduction is the same proportional reduction as the

Chapter 3 Volume 13 Section 1 The Valuation of Accidents Part 2 The Valuation of Costs and Benefits


change in the discount rate. (The % pa values given in Table 3/4 do not include this proportional reduction.)

Range of Years

Rates of Growth in

Accident Values (% pa)

2002 - 2003 2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007 2007 - 2011 2011 - 2021 2021 - 2031 2031 - 2051 2051 - 2061

2061 onwards

1.98 2.22 3.21 2.96 2.46 2.20 1.94 1.55 1.99 1.81 2.00

Table 3/4: Assumed Compound Annual Rates of Growth of Accident Values (%) 3.8 The total cost of accidents on a road network is calculated by multiplying the number of accidents predicted

to occur on the network by the cost per accident. As explained above, the cost per accident varies by type and area of road. The number of accidents on a given length of road is expressed as an accident rate, defined as so many ‘Personal Injury Accidents per million vehicle kilometres’, so that doubling either the length or the traffic flow on the road will double the number of accidents. Apart from length and flow level, in COBA there are two determinants of the number of accidents: the number and type of junctions and the type of links.

3.9 COBA incorporates a method of separating out the effects of links and junctions on accidents. Where

junctions are coded for delay calculation, these should be coded for accident calculation. In addition, where there are junctions which are subsumed in links for speed calculations (in particular in urban areas), but which are likely to be associated with accidents, these should be coded as ‘accident-only’ nodes. Finally, where either a very large link-only network is used and ‘accident-only’ nodes are difficult to identify, or local data on existing accidents are difficult to split between links and junctions, combined ‘link and junction’ accident rates can be attributed to links. The treatment of accidents on links and junctions is described in detail in the following two Chapters.

Volume 13 Section 1 Chapter 4 Part 2 The Valuation of Costs and Benefits The Valuation of Accidents on Links ________________________________________________________________________________________________

___________________________________________________________________________________________________ May 2004 The COBA Manual 4/1

4. THE VALUATION OF ACCIDENTS ON LINKS 4.1 The COBA user has to decide whether to code junction accidents separately from link accidents. ‘Combined’

accident rates and costs attribute all accidents to links. The ‘link-only’ rates and costs exclude junction accidents (that is, those occurring within 20 metres of a junction) and so both default and local ‘link-only’ accident rates are lower than the ‘combined’ rates for a particular link. Accidents at junctions are then modelled separately (see Part 2 Chapter 5). The preferred method of evaluating accidents is to separate link and junction accidents, using local accident data to define the ‘Do-Minimum’ rates and the default rates for new links and junctions in the ‘Do-Something’. However, ‘Combined’ accident rates and costs should be selected in COBA when:

i) local data for the ‘Do-Minimum’ are not available; ii) local data have already been collected in ‘combined’ form and resources to disaggregate the data are not available; or, iii) a large network is being used and ‘accident-only’ nodes would be difficult to identify.

4.2 Accident rates and severities have been falling steadily over time and the trend is expected to continue in the

future. The Government has also announced National Casualty Reduction targets and the methodology and parameters in COBA are consistent with those targets.

4.3 Local data can be obtained from the appropriate police or local authority and should relate to a period when

conditions on the road have been broadly unchanged (for example, no abnormal changes in traffic flow, no changes in junction design or road geometry, etc). Local data should normally cover the five years previous to the COBA assessment and must cover at least three years. The number of accidents in each year must be input, including zero for those links or years where no accidents occurred, and COBA will then internally produce a local accident rate (accidents per million vehicle kilometres) for each link.

4.4 For existing links where local accident data are not available and for new links, the program will use the

default accident rates shown in Table 4/1, they are based on data from 1999-2001. There are fifteen accident types relating to the type of road which are further subdivided by speed limit. In the following tables many cells in the table are at present identical; when available data permit separate rates to be calculated users will be advised. The “Modern”, “Older” and “Other” link descriptions used in the tables are defined as:

“Modern” roads designed and built to geometric standards relevant post 1980, “Older” the majority of the major road network which was not built to recent standards. For single

carriageways this description refers to ‘A’ roads only, and “Other” ‘B’, ‘C’ and ‘unclassified’ single carriageway links. 4.5 The declining trend in accident rates was examined in TRL Report 382 and at a more disaggregate level in

later work undertaken for the DETR. It was found that the changes in accident rates and the number of severities per accident are explained by the relationship:

AN = A0

x βN

Where: AN = the accident rate or number of casualties per accident N years after base year;

A0 = the accident rate or number of casualties per accident in the base year;

βN = change coefficient raised to the power N (the number of years after the base year).

4.6 The values for the accident rate change coefficient β incorporated in the COBA program for the different link accident types are given in Table 4/1. They are the same for ‘Link Only’ and ‘Link and Junction Combined’ analyses and should be applied from any year from 1995 until year 2010. Between 2011 and 2020 and 2021 and 2030 the accident rate change is assumed to be one half and one quarter respectively of

Chapter 4 Volume 13 Section 1 The Valuation of Accidents on Links Part 2 The Valuation of Costs and Benefits

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the 1995 to 2010 reduction. For example, if the coefficient β is 0.9 for 1995 to 2010 then it is 0.95 for 2011 to 2020 ( or [1 + β]/2 ). Zero change is assumed post 2030.

LINK ONLY (2000 Base)

ACCIDENT TYPE ROAD TYPE Accident Rate

(Pia/mvkm) β

1 2 3

D2 Motorway D3 Motorway D4 Motorway

0.089 * 0.089 * 0.089 *

1.001 1.001 1.001

30/40 mph 50/60/70 mph Pia/mvkm β Pia/mvkm β

4 5 6 7 8 9

Modern S2 Roads Modern S2 Roads with HS Modern WS2 Roads Modern WS2 Roads with HS Older S2 A Roads Other S2 Roads

0.297 0.297 0.297 0.297 0.297 0.297

0.984 0.984 0.984 0.984 0.984 0.983

0.174 0.138 0.113 0.102 0.226 0.297

0.973 0.973 0.973 0.973 0.973 0.998

10 11 12

Modern D2 Roads Modern D2 Roads with HS Older D2 Roads

0.295 0.295 0.295

0.984 0.984 0.984

0.119 0.089 0.154

0.973 0.973 0.973

13 14 15

Modern D3+ Roads Modern D3+ Roads with HS Older D3+ Roads

0.295 0.295 0.295

0.984 0.984 0.984

0.119 0.089 0.154

0.973 0.973 0.973

LINK AND JUNCTION COMBINED (2000 Base) ACCIDENT

TYPE ROAD TYPE Accident Rate (Pia/mvkm)

β

1 2 3

D2 Motorway D3 Motorway D4 Motorway

0.098 ** 0.098 ** 0.098 **

1.001 1.001 1.001

30/40 mph 50/60/70 mph Pia/mvkm β Pia/mvkm β

4 5 6 7 8 9

Modern S2 Roads Modern S2 Roads with HS Modern WS2 Roads Modern WS2 Roads with HS Older S2 A Roads Other S2 Roads

0.844 0.844 0.844 0.844 0.844 0.844

0.984 0.984 0.984 0.984 0.984 0.983

0.293 0.232 0.190 0.171 0.381 0.404

0.973 0.973 0.973 0.973 0.973 0.998

10 11 12

Modern D2 Roads Modern D2 Roads with HS Older D2 Roads

1.004 1.004 1.004

0.984 0.984 0.984

0.174 0.131 0.226

0.973 0.973 0.973

13 14 15

Modern D3+ Roads Modern D3+ Roads with HS Older D3+ Roads

1.004 1.004 1.004

0.984 0.984 0.984

0.174 0.131 0.226

0.973 0.973 0.973

Notes: HS refers to the one metre wide hard strip provided both sides of the carriageway; * this rate includes accidents at merge/diverge areas and on slip roads; ** this rate includes accidents at the ends of the slip roads, for example, at roundabout, traffic signals etc. Table 4/1: Default Accident Rates and Accident Rate Reduction Factor (β) (personal injury accidents per million vehicle kilometres - 2000 Base)



4.7 Table 4/2 shows the severity split incorporated in COBA in terms of casualties per accident by link type based on data for 1999 - 2001.

LINK ONLY CASUALTIES (2000 Base)

ACCIDENT TYPE ROAD TYPE CASUALTIES PER P.I.A.


1 – 3 Motorways 0.0229 0.1591 1.467



4 – 8

9


0.0137

0.0098

0.1647

0.1605

1.133

1.063

0.0577

0.0296

0.3294

0.2634

1.249

1.216


LINK AND JUNCTION COMBINED CASUALTIES (2000 Base)


1 – 3 Motorways 0.0220 0.1520 1.462



4 - 8

9


0.0092

0.0075

0.1392

0.1379

1.157

1.124

0.0436

0.0262

0.2855

0.2513

1.286

1.245


Table 4/2: Average Number of Casualties per Accident (2000 Base)



4.8 Table 4/3 gives the casualty rate reduction factors β for each link type incorporated in the COBA program. The changes are assumed to apply up to 2010 with zero change thereafter.

LINK ONLY Change Factors β

ROAD TYPE ALL SPEED LIMITS ACCIDENT TYPE Casualty Severity Fatal (f) Serious (se) Slight (sl)

1 – 3 Motorways 0.960 0.946 1.010

Speed Limit (mph) 30/40 mph > 40 mph


4 - 8

9


0.959

0.979

0.965

0.966

1.011

1.010

0.994

0.988

0.979

0.973

1.003

1.007


LINK AND JUNCTION COMBINED Change Factors β

ROAD TYPE ALL SPEED LIMITS ACCIDENT

TYPE Casualty Severity Fatal (f) Serious (se) Slight (sl)

1 – 3 Motorways 0.960 0.946 1.010

Speed Limit (mph) 30/40 mph > 40 mph


4 - 8

9


0.954

0.973

0.964

0.961

1.010

1.011

0.988

0.985

0.975

0.973

1.005

1.008


Table 4/3: Casualties Per Accident Change Factors β. 4.9 Table 4/4 shows the accident costs incorporated in COBA by link type using the average 1999 - 2001

severity splits given in Table 4/2. The severity split and hence cost varies considerably by link type. Junction accidents are, on average, less severe than those attributable to links and therefore the ‘combined’ link and junction cost is lower than the ‘link-only’ average. Because the severity of accidents is expected to reduce over time the average accident costs change each year and the costs in the table are only attributable to the Base year of the data.



LINK ONLY COSTS (2000 Base)

ACCIDENT TYPE ROAD TYPE ACCIDENT COSTS (£)

1 -3 Motorways 88,330

Speed Limit 30/40 mph 50/60/70 mph

4 - 8

9


79,560

73,320

152,070

107,080

10 - 15 Dual Carriageways 79,020 101,450

LINK AND JUNCTION COMBINED COSTS (2000 Base)

1 - 3 Motorways 86,130

Speed Limit 30/40 mph 50/60/70 mph

4 - 8

9


70,560

67,890

128,540

101,400

10 - 15 Dual Carriageways 69,420 95,910

Table 4/4: Average Cost per Injury Accident by Link Type (2000 Base)

(2002 values and prices)

Volume 13 Section 1 Chapter 5 Part 2 The Valuation of Costs and Benefits The Valuation of Accidents at Junctions ________________________________________________________________________________________________


5. THE VALUATION OF ACCIDENTS AT JUNCTIONS

5.1 COBA can estimate the numbers and costs of accidents at junctions and on links separately. This is the

recommended method for COBA appraisal and should be used unless information on junction characteristics is lacking. All new junctions should be coded for accident appraisal, as should all existing junctions where there are significant forecast traffic flow changes and where accidents are likely to occur; junctions which are coded for accident but not traffic delay purposes are called ‘accident-only nodes’. In the absence of local data on junction-attributable accidents COBA default values for junctions should be used.

5.2 COBA incorporates two models that relate accidents at junctions to given flow configurations. These allow

forecasts of future accident numbers to be derived for existing and new junctions. For existing junctions, the use of local accident data is recommended, with default values being used in the absence of such data. The number of accidents occurring ‘at’ (that is within 20 metres of) each junction as recorded by the appropriate police or local authority should be used. Local data should normally cover the five years previous to the COBA assessment and must cover at least three years.

5.3 The models are of two types, both of the basic form: A = a (f)b, where A is the annual number of accidents, f is a function of traffic flow and a and b vary among junction

types. They have been estimated by reference to accidents and flows at existing junctions. The choice of function varies according to junction type as indicated in Table 5/1 which also shows the associated values of a and b.

5.4 In the Cross Product (C) model, (f) is the value produced by multiplying the combined inflow from the two

major opposing links by the sum of the inflows on the other one or two minor links. Inflows are measured in thousands of vehicles per annual average day. In the inflow (I) model, (f) is the value of the total inflow from all links in thousands of vehicles per annual average day. Where the user inputs local accident numbers for existing junctions, the COBA program calculates a ‘local’ value for a, with b being fixed at the national value.

5.5 As with links, accident rates and their severity at junctions have been falling steadily over time and the trend

is expected to continue in the future. The Government has also announced National Casualty Reduction targets and the methodology and parameters in COBA are consistent with those targets.

5.6 The classification of junctions for accident assessment distinguishes three broad categories, that is,

major/minor, signals and roundabouts (subdivided into standard, small, mini and signalled). Major/minor junctions include staggered, standard priority, multiple, Y-junctions and cross-roads. Staggered junctions can be treated either as crossroads or as pairs of three-arm junctions. Normally, where the stagger is significant and the junction effectively operates as two T-junctions, it should be coded as two three-arm junctions. This also applies to the coding of junctions for delay purposes (see Part 6 paragraph 8.22).

Chapter 5 Volume 13 Section 1 The Valuation of Accidents at Junctions Part 2 The Valuation of Costs and Benefits


NON BUILT-UP (Above 40 MPH)

BUILT-UP (UP to 40 MPH)

Junction Type No. of

Arms

Highest Link

Standard(Single or

Dual)

Formula Type

Junction Type

Coeff ‘a’

Power ‘b’

Junction Type

Coeff ‘a’

Power ‘b’

PRIORITY 3 3 4 4 5 5

S D S D S D

C C I C I I

1 3 5 7 9

11

0.195 0.195 0.361 0.240 0.361 0.361

0.460 0.460 0.440 0.710 0.440 0.440

2 4 6 8

10 12

0.195 0.195 0.361 0.240 0.361 0.361

0.460 0.460 0.440 0.710 0.440 0.440

PRIORITY WITH GHOST ISLANDS

3 3 4 4 5 5

S D S D S D

C C I C I I

13 15 17 19 21 23

0.195 0.195 0.361 0.240 0.361 0.361

0.460 0.460 0.440 0.710 0.440 0.440

14 16 18 20 22 24

0.195 0.195 0.361 0.240 0.361 0.361

0.460 0.460 0.440 0.710 0.440 0.440

PRIORITY WITH SINGLE LANE DUALLING

3 3 4 4 5 5

S D S D S D

C C I C I I

25 27 29 31 33 35

0.195 0.195 0.361 0.240 0.361 0.361

0.460 0.460 0.440 0.710 0.440 0.440

26 28 30 32 34 36

0.195 0.195 0.361 0.240 0.361 0.361

0.460 0.460 0.440 0.710 0.440 0.440

SIGNALS 3 3 4 4

5/6 5/6

S D S D S D

I C C C I I

37 39 41 43 45 47

0.223 0.494 1.378 0.494 0.254 0.238

0.610 0.420 0.200 0.420 0.620 0.850

38 40 42 44 46 48

0.223 0.291 1.378 0.291 0.254 0.160

0.610 0.510 0.200 0.510 0.620 0.970

ROUNDABOUTS – STANDARD

3 3 4 4

5/6 5/6

S D S D S D

C C C C I I

49 51 53 55 57 59

0.033 0.033 0.024 0.063 0.007 0.019

0.760 0.760 0.890 0.690 1.770 1.420

50 52 54 56 58 60

0.033 0.033 0.048 0.022 0.014 0.006

0.760 0.760 0.740 0.850 1.530 1.730

- SMALL 3 3 4 4

5/6 5/6

S D S D S D

C C C C I I

61 63 65 67 69 71

0.033 0.033 0.101 0.101 0.044 0.044

0.760 0.760 0.660 0.660 1.280 1.280

62 64 66 68 70 72

0.033 0.033 0.263 0.263 0.095 0.095

0.760 0.760 0.540 0.540 1.140 1.140

- MINI 3 3 4 4

5/6 5/6

S D S D S D

C C C C I I

73 75 77 79 81 83

0.012 0.012 0.070 0.070 0.013 0.013

1.040 1.040 0.640 0.640 1.470 1.470

74 76 78 80 82 84

0.012 0.012 0.070 0.070 0.013 0.013

1.040 1.040 0.640 0.640 1.470 1.470

- SIGNALLED 3 3 4 4

5/6 5/6

S D S D S D

C C C C I I

85 87 89 91 93 95

0.033 0.033 0.024 0.063 0.007 0.019

0.760 0.760 0.890 0.690 1.770 1.420

86 88 90 92 94 96

0.033 0.033 0.048 0.022 0.014 0.006

0.760 0.760 0.740 0.850 1.530 1.730

Table 5/1: Junction Accident Parameters – 1997 Base



5.7 As an example, imagine a rural 4-arm major/minor junction with inflows as shown in Figure 5/1 (AADT in '000s):

8

10

2 1

Figure 5/1: Example of 4-Arm Major Minor Junction The major road in this case is a dual carriageway and so the relevant formula is for junction type 7, is of the

Cross Product type, and is: A = 0.24 (f) 0.710. Given the above flows, the value of the flow factor (f) is 54 (that is, (8+10) x (1+2)) and the predicted

number of personal injury accidents per annum is: A = 0.24 (54) 0.710 = 4.08. 5.8 In all applications of the Cross Product model, any combined inflow from the one or two minor opposing

links that amounts to less than 1 (that is, 1000 AADT) will be taken by COBA to be 1 because such low flows were rarely encountered in the research which produced the accident formulae; consequently little evidence of the effect of changes in very low combined inflows was found. In such cases the formulae are sensitive only to changes in combined minor or major link inflows which involve inflow levels over 1000 (AADT). This cut-off applies also to the combined inflow from the two major flows. However it will usually be inappropriate to model such low flow junctions as paragraph 5.6 and Table 5/2 make clear.

If the junction had single carriageways only, the formula would be of the Inflow type for junction type

number 5. Where the value of the flow factor (f) is 21 (that is, 10+8+2+1); the formula would be: A = 0.361 (21) 0.440 = 1.38 5.9 It must be stressed that these junction accident formulae have been derived from actual records of accidents

and flows at junctions. The accident predictions for given junction types with flow levels and configurations outside the ranges recorded in the research are not a reliable guide to design, although they provide useful indications when used in conjunction with other methods of operational analysis. They should be used with great care when considering individual junctions, for example, junction accident rates may vary to some extent with the local spacing of junctions and other characteristics not included in the COBA accident formulae. When comparing the COBA accident benefits of different junction types (as part of an economic appraisal of preferred junction type), the user should check that the ranking by accident benefits accords with engineering judgement. Sensitivity tests using a range of likely accident rates may be appropriate. In



particular, comparisons based on flow levels outside the observed ranges of the COBA junction formulae set out in Table 5/2 should be scrutinised carefully, especially where the combined inflow minimum value of 1 is imposed in a Cross Product accident formula. In such cases accident predictions may not be sensitive to small changes in flows. The Overseeing Organisation should be consulted where the assessment of preferred junction type depends critically on accident benefits.

Junction Type Thousands Veh/Day

3-Arm 4 or more Arm

Major/Minor Signal & Roundabout Major/Minor Signal Roundabout - Standard - Small - Mini

5 - 1015 - 20

5 - 1010 - 20

25 - 3025 - 3515 - 20

(Single) 15 - 20 (Dual) (Single) 25 - 35 (Dual) (Single) 30 - 40 (Dual)

Table 5/2: Observed Ranges of Flow in COBA Junction Accident Model Calibration 5.10 The costs and casualty split per personal injury accident in COBA for junctions are detailed in Table 5/3.



JUNCTION

TYPE COST OF

ACCIDENT CASUALTIES PER P.I.A

(2000 Base) £ FATAL SERIOUS SLIGHT 1 £101,550 0.0265 0.2413 1.355 2 £67,690 0.0075 0.1350 1.144 3 £101,550 0.0265 0.2413 1.355 4 £67,690 0.0075 0.1350 1.144 5 £111,820 0.0295 0.2793 1.459 6 £66,320 0.0062 0.1292 1.244 7 £111,820 0.0295 0.2793 1.459 8 £66,320 0.0062 0.1292 1.244 9 £111,820 0.0295 0.2793 1.459

10 £66,320 0.0062 0.1292 1.244 11 £111,820 0.0295 0.2793 1.459 12 £66,320 0.0062 0.1292 1.244 13 £101,550 0.0265 0.2413 1.355 14 £67,690 0.0075 0.1350 1.144 15 £101,550 0.0265 0.2413 1.355 16 £67,690 0.0075 0.1350 1.144 17 £111,820 0.0295 0.2793 1.459 18 £66,320 0.0062 0.1292 1.244 19 £111,820 0.0295 0.2793 1.459 20 £66,320 0.0062 0.1292 1.244 21 £111,820 0.0295 0.2793 1.459 22 £66,320 0.0062 0.1292 1.244 23 £111,820 0.0295 0.2793 1.459 24 £66,320 0.0062 0.1292 1.244 25 £101,550 0.0265 0.2413 1.355 26 £67,690 0.0075 0.1350 1.144 27 £101,550 0.0265 0.2413 1.355 28 £67,690 0.0075 0.1350 1.144 29 £111,820 0.0295 0.2793 1.459 30 £66,320 0.0062 0.1292 1.244 31 £111,820 0.0295 0.2793 1.459 32 £66,320 0.0062 0.1292 1.244 33 £111,820 0.0295 0.2793 1.459 34 £66,320 0.0062 0.1292 1.244 35 £111,820 0.0295 0.2793 1.459 36 £66,320 0.0062 0.1292 1.244 37 £69,640 0.0092 0.1631 1.444 38 £64,330 0.0064 0.1157 1.214 39 £69,640 0.0092 0.1631 1.444 40 £64,330 0.0064 0.1157 1.214 41 £67,340 0.0095 0.1423 1.467 42 £64,660 0.0061 0.1177 1.253 43 £67,340 0.0095 0.1423 1.467 44 £64,660 0.0061 0.1177 1.253 45 £67,340 0.0095 0.1423 1.467 46 £64,660 0.0061 0.1177 1.253 47 £67,340 0.0095 0.1423 1.467 48 £64,660 0.0061 0.1177 1.253

Table 5/3:Junction Accident Costs (2002 values and prices) based on

2000 Base Severity Splits [Junction Types 1-48]



JUNCTION TYPE

COST OF ACCIDENT

CASUALTIES PER P.I.A (2000 Base)

£ FATAL SERIOUS SLIGHT

49 £54,470 0.0060 0.1019 1.21450 £54,160 0.0027 0.0806 1.163 51 £54,470 0.0060 0.1019 1.214 52 £54,160 0.0027 0.0806 1.163 53 £54,470 0.0060 0.1019 1.214 54 £54,160 0.0027 0.0806 1.163 55 £54,470 0.0060 0.1019 1.214 56 £54,160 0.0027 0.0806 1.163 57 £54,470 0.0060 0.1019 1.214 58 £54,160 0.0027 0.0806 1.163 59 £54,470 0.0060 0.1019 1.214 60 £54,160 0.0027 0.0806 1.163 61 £54,470 0.0060 0.1019 1.214 62 £54,160 0.0027 0.0806 1.163 63 £54,470 0.0060 0.1019 1.214 64 £54,160 0.0027 0.0806 1.163 65 £54,470 0.0060 0.1019 1.214 66 £54,160 0.0027 0.0806 1.163 67 £54,470 0.0060 0.1019 1.214 68 £54,160 0.0027 0.0806 1.163 69 £54,470 0.0060 0.1019 1.214 70 £54,160 0.0027 0.0806 1.163 71 £54,470 0.0060 0.1019 1.214 72 £54,160 0.0027 0.0806 1.163 73 £54,470 0.0060 0.1019 1.214 74 £56,740 0.0028 0.0965 1.182 75 £54,470 0.0060 0.1019 1.214 76 £56,740 0.0028 0.0965 1.182 77 £54,470 0.0060 0.1019 1.214 78 £56,740 0.0028 0.0965 1.182 79 £54,470 0.0060 0.1019 1.214 80 £56,740 0.0028 0.0965 1.182 81 £54,470 0.0060 0.1019 1.214 82 £56,740 0.0028 0.0965 1.182 83 £54,470 0.0060 0.1019 1.214 84 £56,740 0.0028 0.0965 1.182 85 £47,820 0.0039 0.0703 1.258 86 £53,860 0.0031 0.0705 1.221 87 £47,820 0.0039 0.0703 1.258 88 £53,860 0.0031 0.0705 1.221 89 £47,820 0.0039 0.0703 1.258 90 £53,860 0.0031 0.0705 1.221 91 £47,820 0.0039 0.0703 1.258 92 £53,860 0.0031 0.0705 1.221 93 £47,820 0.0039 0.0703 1.258 94 £53,860 0.0031 0.0705 1.221 95 £47,820 0.0039 0.0703 1.258 96 £53,860 0.0031 0.0705 1.221

Table 5/3 (continued): Junction Accident Costs (2002 values and prices) based on

2000 Base Severity Splits [Junction Types 49-96]



5.11 As with links, accident rates and accident severity at junctions have been falling steadily over time and the trend is expected to continue in the future. The Government has also announced National Casualty Reduction targets and the methodology and parameters in COBA are consistent with those targets. The declining trend in accident rates was examined in TRL Report 382 and at a more disaggregate level in later work undertaken for the DTLR. It was found that the changes in accident rates and the number of severities per accident at junctions are explained by the relationship:

AN = A0

x βN

Where: AN = the accident rate or number of casualties per accident N years after base year

A0 = the accident rate or number of casualties per accident in the base year;

β = change coefficient; and

N = the number of years after base year. 5.12 The values for the change coefficient β found by the research are given in Table 5/4 for ‘Major’ and ‘Minor’

junctions in Built-up (BU = 30 or 40 mph speed limits) and Non Built-up (NBU = above 40 mph speed limit) locations. They are the same for each junction type. ‘Major’ means that a motorway or A Road is the highest link standard approaching the junction while ‘Minor’ means that only lower class roads approach the junction. The ‘Major’ values of β are held as default within the program and are assumed to apply for all years from 1995 to 2010. As with links, the number of casualties per accident post 2010 is held constant at the 2010 level. But between 2011 and 2020 and 2021 and 2030 the accident rate reduction is assumed to be one half and one quarter respectively of the 1995 to 2010 reduction. Zero change is assumed post 2030.

Number of Casualties per Accident Junction

Classification

Accident Rate β Fatal

β Serious

β Slight β

Major, BU 0.991 0.949 0.962 1.010

Minor, BU 0.976 0.961 0.959 1.011

Major, NBU 0.984 0.968 0.958 1.006

Minor, NBU 0.996 0.976 0.972 1.011

Table 5/4: Accident and Casualty Severity Rate Change Coefficient β for Junctions

Volume 13 Section 1 Chapter 6 Part 2 The Valuation of Costs and Benefits Construction Costs ________________________________________________________________________________________________

___________________________________________________________________________________________________ June 2006 The COBA Manual 6/1

6. CONSTRUCTION COSTS 6.1 Cost-benefit analysis compares the benefits of a project with its costs. The benefits measured by COBA are the

streams of user cost savings appraised over the nominal life of the scheme (see Part 1 Chapter 5) and discounted to the present value year. The costs to be taken into account in COBA are the construction, land and property costs involved in carrying out the road improvement, including preparation and supervision costs. All costs are allocated to the sector incurring the costs, that is, Central Government, Local Government or the Private Sector (for example Developers). COBA users should read WebTAG Unit 3.5.9 for detailed guidance on preparation of scheme costs for appraisal purposes.

6.2 In addition, COBA will calculate non-traffic related maintenance cost savings. Where delay and diversion is

imposed on road users during the construction period, an estimate of the traffic delay costs should be input to the COBA assessment. These are treated as negative benefits in COBA. The procedures explained in Part 2 Chapters 6 to 8 apply to both ‘Do-Minimum’ and ‘Do-Something’ costs.

6.3 Deleted. 6.4 The accounting approach in the appraisal of transport schemes has changed to the market price unit of account,

though COBA continues to operate in the factor cost unit of account. (See Part 1, Chapter 6 for a fuller explanation). COBA requires any elements of indirect taxation (including VAT) to be removed from cost inputs. Under some circumstances the Highways Agency pays VAT on construction costs, (in others it doesn’t) and any elements of indirect taxation should be removed before being input into COBA. For the purposes of appraisal, Land-fill tax (where its extent is known) should be treated as a ‘charge’ and no adjustment is necessary for input into COBA.

6.5 Deleted. 6.6 Deleted. 6.7 Deleted. 6.8 Deleted. Land and Property Costs 6.9 COBA users should read WebTAG Unit 3.5.9 Annex A for detailed guidance on preparation of land and

property costs for appraisal purposes. 6.10 Deleted. 6.11 Deleted. 6.12 Deleted. 6.13 Deleted. 6.14 Deleted. 6.15 Deleted. 6.16 Deleted. 6.17 Deleted.

Chapter 6 Volume 13 Section 1 Construction Costs Part 2 The Valuation of Costs and Benefits


6.18 Deleted. Risk Assessment and Adjustment Factors for Optimism Bias

6.19 All scheme cost estimates should include an assessment of the risks involved. The Department requires a

Quantified Risk assessment (QRA) to be undertaken with an adjustment reflecting the risk analysis made to the base costs of a scheme.

6.20 Optimism bias is the tendency of appraisers to underestimate costs and to overestimate benefits. Capital cost

optimism bias should be assessed according to the guidance given in WebTAG Unit 3.5.9. 6.21 Deleted. Construction Period and Optimism Bias 6.22 In addition to cost overruns the actual construction period is often longer than that envisaged. It is therefore

necessary to allow for 'optimism bias' in the estimate of construction duration. The major effect of increasing the construction duration is likely to be in the estimate of construction delays.

Volume 13 Section 1 Chapter 7 Part 2 The Valuation of Costs and Benefits The Preparation of Cost Data for Use in COBA ___________________________________________________________________________________________________


7. THE PREPARATION OF COST DATA FOR USE IN COBA

7.1 Guidance on the estimation and treatment of road scheme costs is provided in WebTAG Unit 3.5.9. 7.2 The elements of base costs given in TAG Unit 3.5.9 are largely self explanatory and should not give rise to

difficulties of interpretation or valuation when preparing COBA input. Land costs, however can present particular problems (see Part 2 Chapter 6).

Preparation Costs 7.3 Preparation costs include Consulting Engineers’/Agent Authorities fees, actual costs of pursuing alternative

routes (if any) in the early stages of the scheme, Public Consultation, Public Inquiry and the cost of any surveys carried out during scheme preparation. The defaults for the preparation costs contained within COBA are:

(1) at Roads Programme 12% of scheme construction, land and property costs; Entry Stage (2) at Preferred Route and 9% of scheme construction, land and property costs; Public Consultation Stages (3) at Order Publication Report 6% of scheme construction, land and property costs; Stage (and for Public Inquiry) (4) at Works 2% of scheme construction, land and property costs Commitment Stage It is recognised that preparation costs cannot be predicted with any accuracy at the early stages and the above

guidelines have been estimated from data collected from the roads programme overall. These values are therefore representative for the average scheme. Preparation costs are assumed to occur evenly from the present day to the start of construction.

Supervision Costs 7.4 Supervision costs are those associated with the cost of site staff and include a percentage for on site testing of

materials. Recent research has shown that these costs are, on average, 5% of scheme construction, land and property costs. Supervision costs should be spread evenly throughout the contract period.

Delays During Construction and During Future Routine Maintenance 7.5 In addition to the direct costs of construction, allowances may have to be made for delays imposed upon

existing traffic during construction of a scheme and/or delays during future routine maintenance of the Do- Minimum and Do-Something networks (see Chapters 9 and 10 for more details). Where such delays are likely to be significant, it may be appropriate to model them. For urban schemes only, it may sometimes be possible to compute the delays from the same mathematical model that was used to predict the overall traffic effects of the scheme. The delays may be costed using a separate COBA run, comparing user costs with reduced capacity or diversionary routes during construction, with user costs in the absence of such delays. Alternatively, QUADRO may be used to model and estimate diversionary delays. Where diversion and network effects are not likely to prove significant, a simpler manual calculation should suffice. This will involve an estimate of total delays (by vehicle category) and costing of these delays using the values of time given in the latest

Chapter 7 Volume 13 Section 1 The Preparation of Cost Data for Use in COBA Part 2 The Valuation of Costs and Benefits ___________________________________________________________________________________________________

___________________________________________________________________________________________________ 7/2 The COBA Manual June 2006

WebTAG Unit 3.5.6. Present Value Year 7.6 All items in COBA, including scheme costs, are measured at the constant prices of a given base year, the

Present Value Year. This means the effect of general inflation, that is the increase in the average prices of all goods and services, is excluded. The Retail Price Index (RPI) is used to measure general inflation and should be used to convert user costs/benefits to different price bases. Table 7/1 gives quarterly values of the Retail Price Index (RPI). The table will be updated from time to time by the Overseeing Organisation.

7.7 For construction costs, account must be taken of any change in the cost of road construction relative to the

general price level. This used to be done in COBA by using the Relative Price Factor. However, the latest WebTAG guidance Unit 3.5.9 recommends the use of inflation rates relevant to the delivery of transport schemes. These should be used in the preparation of base cost inputs for COBA from now on.

7.8 Deleted. 7.9 Deleted. 7.10 Deleted. 7.11 Deleted. 7.12 Deleted 7.13 Deleted.

Volume 13 Section 1 Chapter 7 Part 2 The Valuation of Costs and Benefits The Preparation of Cost Data for Use in COBA ___________________________________________________________________________________________________


Retail Price Index (RPI)

Year and Quarter Quarter Annual

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

2001 Q1 2001 Q2 2001 Q3 2001 Q4

2002 Q1 2002 Q2 2002 Q3 2002 Q4

2003 Q1 2003 Q2 2003 Q3 2003 Q4

2004 Q1 2004 Q2 2004 Q3 2004 Q4

2005 Q1 2005 Q2 2005 Q3 2005 Q4

2006 Q1 2006 Q2 2006 Q3 2006 Q4

171.8 173.9 174.0 173.8

173.9 176.0 176.6 178.2

179.2 181.3 181.8 182.9

183.8 186.3 187.4 189.2

189.7 191.9 192.6 193.7

194.2 197.6

106.9 115.2 126.2 133.5 138.4 140.7 144.1 149.1 152.7 157.5 162.8 165.4 170.3

173.4

176.2

181.3

186.7

192.0

Notes: RPI Base: Jan 1987 = 100

Latest information on RPI is available from National Statistics on 0207-533-5874.

Table 7/1: Values of RPI

Chapter 7 Volume 13 Section 1 The Preparation of Cost Data for Use in COBA Part 2 The Valuation of Costs and Benefits ___________________________________________________________________________________________________


7.14 The allocation of construction costs in the correct proportion for each year during which construction takes place cannot always be precise, especially when a scheme is in its early stages and several options are being considered. However, an accurate profile of construction costs covering the contract period should be used whenever possible, particularly when the contract period stretches over three or four years. Table 7/2 shows the default distribution of construction costs (excluding land costs) over varying construction periods based on the average of a large number of schemes.

Contract Period Years

Percentage of Total Cost Total

Years Before Opening First Scheme 4 3 2 1 Year

1.5 2.0 2.5 3.0 3.5 4.0

29 68 3 47 50 3 16 42 39 3 30 34 33 3 11 29 30 27 3 22 25 25 25 3

100 100 100 100 100 100

Table 7/2: Time Distribution of Construction Works Cost for a Typical Scheme 7.15 Deleted.

Volume 13 Section 1 Chapter 8 Part 2 The Valuation of Costs and Benefits An Example of Scheme Cost Inputs ___________________________________________________________________________________________________


8. AN EXAMPLE OF SCHEME COST INPUTS 8.1 The proforma now provided in WebTAG Unit 3.5.9 should be used to prepare scheme cost inputs for COBA. Paragraphs 8.2 to 8.8 and sample cost calculation sheets deleted.

Chapter 8 Volume 13 Section 1 An Example of Scheme Cost Inputs Part 2 The Valuation of Costs and Benefits ___________________________________________________________________________________________________


Volume 13 Section 1 Chapter 9 Part 2 The Valuation of Costs and Benefits Highway Maintenance __________________________________________________________________________________________________


9. HIGHWAY MAINTENANCE 9.1 Since COBA is concerned with evaluating differences in the overall costs of operating a ‘Do-Minimum’ and

any number of ‘Do-Something’ networks it is important to appraise the change in the costs to both the highway authority and the road user of maintaining each network under consideration.

9.2 Maintenance costs can be divided into two broad categories for economic appraisal purposes, referred to as

‘non-traffic related costs’ (Group 1) and ‘traffic related costs’ (Group 2). Non-traffic Related Costs (Group 1) 9.3 Group 1 costs are comprised of the following items: drainage, street lighting footway/cycle tracks, safety

fence/barrier, boundary fences, bridges/culverts/subways, remedial earthworks, verge maintenance, sweeping, gulley emptying, signals/signs/crossings, road markings, salt/snow plough/fencing and motorway compounds.

9.4 Although some of the above Group 1 items are strictly speaking traffic related (Group 2) they are generally

judged to incur relatively small amounts of expenditure and as such have been included in Group 1. 9.5 Group 1 costs can generally be described as an annual charge per unit length of road. The difference between

the ‘Do-Minimum’ and ‘Do-Something’ Group 1 costs is usually small, and tends to favour the ‘Do-Minimum’ because the ‘Do-Something’ adds to the length of road that has to be maintained.

9.6 These costs are irregular items in that higher expenditure is incurred in some years than others. For

computational convenience, COBA treats this uneven flow of costs as an equivalent stream of constant costs arising in each year of the appraisal period.

9.7 Whenever possible, current estimated costs per unit length of road should be input to COBA. These should

be obtained from the Integrated Highways Maintenance System (IHMS) for the appropriate link class, and suitably deflated to present value year values using the RPI (see Table 7/1 Chapter 7).

9.8 Where specific local costs data are not input the default values given in Table 9/1 will be used. The program

allocates the maintenance type based on the link classification and road width. Special link classifications 12 - 14 are assumed to have zero maintenance cost.

ROAD MAINTENANCE TYPE

1

2

3

4

5

6

CARRIAGEWAY STANDARD

S2

D2AP

D3AP

D2M

D3M

D4M

COBA ROAD CLASS (see Part 5 Chapter 1)

1, 7-10,

15

2, 7-9, 11,

16-17

3, 7-9, 11,

16-17

4, 18-20

5, 18-20

6, 18-20

COST (£/km/year)

7400

10400

12900

17100

19500

19500

Table 9/1: Non-Traffic Related Maintenance Costs (2002 values and prices)

Chapter 9 Volume 13 Section 1 Highway Maintenance Part 2 The Valuation of Costs and Benefits ___________________________________________________________________________________________________

___________________________________________________________________________________________________ 9/2 The COBA Manual May 2004

Traffic Related Costs (Group 2) 9.9 Group 2 costs are comprised of both the works and traffic delay costs associated with the following items:

reconstruction, overlay, resurfacing, surface dressing and patching. 9.10 It can be assumed that when a vehicle reassigns from an old road to a new road, it ceases to impose wear and

tear on the old road and instead imposes it on the new road. For the purposes of the economic assessment of road schemes, net change in Group 2 maintenance costs between the ‘Do-Minimum’ and ‘Do-Something’ situations is assumed to be insignificant. This is still a reasonable assumption in most cases where the old road is known to be in a sound structural condition.

9.11 However, this is unlikely to be a reasonable assumption where different major maintenance works are

planned in the foreseeable future in the ‘Do-Minimum’ compared with the ‘Do-Something’. This could be the case if the existing road is in, or is deteriorating into, a poor structural condition. In this case more costly maintenance works may be needed in the ‘Do-Minimum’ compared to the ‘Do-Something’ with lower traffic flows on the old road, and a different kind of assessment needs to be made. The COBA user should set out explicitly the assumptions made about future maintenance work.

9.12 In addition to these works costs, there are user costs associated with the delay to traffic whilst the works are

carried out. These are the time delays forecast to occur at future maintenance works sites, and the associated vehicle operating and accident costs.

Delays During Roadworks 9.13 The computer program QUADRO should normally be used to assess traffic related user delay costs during

roadworks (externally to the COBA program) and the results input to COBA, to produce aggregate Net Present Values for both the High and Low traffic forecasts.

9.14 The QUADRO Manual (DMRB 14.1) describes in detail how Group 2 costs should be assessed. However,

the basic QUADRO method is described below so that in those cases where maintenance costs for Group 2 are significantly different between the ‘Do-Minimum’ and ‘Do-Something’, users can see how the two programs can be used in conjunction with each other.

9.15 Given the physical layout of a site which is to be the subject of extensive maintenance work, together with

predicted future traffic flows in each direction, a 24 hour flow profile, the duration of the works, information about any diversion routes and a works cost profile, the QUADRO program will compute the Present Value of both works and traffic delay costs of any future maintenance profile defined by the user. Clearly the results obtained will depend upon the validity of the assumptions made about the need for and the type of maintenance to be carried out during the 30 year appraisal period and the likely traffic management arrangements during maintenance works. There will need to be common agreement reached in connection with these aspects of specific proposals between the Overseeing Organisation before the program is used. In all cases the program should be run for both the ‘Do-Minimum’ and ‘Do-Something’ options. Care will be needed when deciding how many existing links in the ‘Do-Minimum’ option are affected by substantial reassignment of traffic to the new link(s), since in general only a fairly substantial change in traffic flow will affect predicted maintenance profiles. Therefore only existing links with substantial changes should be considered for the purpose of this exercise.

9.16 Maintenance operations should be estimated on the assumption that they will be conducted on a cost-effective

basis in relation to both works costs and traffic delay costs. Clearly, works which are expensive in terms of both expenditure and user costs should not be undertaken until all alternative options (for example, night time working) have been investigated.

Volume 13 Section 1 Chapter 9 Part 2 The Valuation of Costs and Benefits Highway Maintenance __________________________________________________________________________________________________


9.17 Future traffic flows should be consistent with those used in the appropriate COBA analysis. This is particularly relevant where traffic flows and journey times derived from the traffic appraisal are to be used directly in the economic appraisal (see also Part 4 Chapters 2 and 3). Values of economic parameters and the discount rate built into the QUADRO program are consistent with COBA.

9.18 The principles of economic appraisal and the QUADRO method are best illustrated by way of an example.

Suppose the road scheme in question bypasses an existing stretch of road which is in a poor state of repair. In the ‘Do-Minimum’ situation it is estimated that a major reconstruction of the existing carriageway will be required in 2005 followed by resurfacing in 20 years time. In the ‘Do-Something’ situation traffic volumes would be reduced on the existing road so that resurfacing need not be considered for 10 years. It is estimated that the new road will not need resurfacing for 20 years. The ‘Do-Minimum’ and ‘Do-Something’ options display the following estimated maintenance profiles:

DO-MINIMUM Existing Road 2005 2025 2045 3 month reconstruction 1 month resurfacing 3 month reconstruction £1,000,000 £300,000 £1,000,000 DO-SOMETHING Existing Road 2015 2045 1 month resurfacing 3 month reconstruction £300,000 £500,000 New Road 2025 2055 1 month resurfacing 2 month overlay £300,000 £750,000

Table 9/2: Estimated Maintenance Works Cost Profiles (average 2002 prices) 9.19 All costs used in the maintenance profile should use current estimates deflated to the present value year using

the Retail Price Index (see Table 7/1 Chapter 7). 9.20 COBA already has the discounting procedure built into it. In order to combine the effects of the preferred

maintenance profile (that is, usually the lowest PVC) for both ‘Do-Minimum’ and ‘Do-Something’ with the scheme capital costs and benefits in the COBA program, it is necessary to input the undiscounted QUADRO works and user costs separately (see phase 9 of the QUADRO printout) to COBA in the years in which they occur, as shown in Table 8/1.

9.21 The final COBA results will then automatically include the effect of the selected Do-Minimum and Do-

Something maintenance profiles. 9.22 Alternatively, the difference in total discounted costs for the Do-Minimum and Do-Something QUADRO

profiles can be manually incorporated with the COBA results to give the final scheme NPV and BCR.

Chapter 9 Volume 13 Section 1 Highway Maintenance Part 2 The Valuation of Costs and Benefits ___________________________________________________________________________________________________

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Volume 13 Section 1 Chapter 10 Part 2 The Valuation of Costs and Benefits Delays During Construction __________________________________________________________________________________________________

__________________________________________________________________________________________________ May 2004 The COBA Manual 10/1

10. DELAYS DURING CONSTRUCTION 10.1 Cost benefit analysis is concerned with evaluating differences in the overall network costs of ‘Do-Something’

options against the ‘Do-Minimum’ and any assessment therefore must include user costs imposed by the road construction itself. For a simple village by-pass where the only disruption to traffic could be at the tie-ins with the existing road the construction delay may be minimal. However, with schemes such as on-line motorway widening construction delays or their avoidance form a major part in the decision making process.

10.2 The assessment of construction delays is important in both the estimation of overall benefits and the ranking

of options. Therefore, an analysis or reasons for assuming insignificant disbenefits, must be included in all economic appraisals.

10.3 The assessment of delays during construction is usually carried out using QUADRO (DMRB 14.1) the

undiscounted QUADRO results can then be input into COBA or the discounted results can be manually incorporated with the COBA results to give the overall scheme NPV and BCR.

Chapter 10 Volume 13 Section 1 Delays During Construction Part 2 The Valuation of Costs and Benefits __________________________________________________________________________________________________

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Volume 13 Section 1 Chapter 11 Part 2 The Valuation of Costs and Benefits A Summary of the Items of Cost and Benefit in COBA __________________________________________________________________________________________________

__________________________________________________________________________________________________ June 2006 The COBA Manual 11/1

11. A SUMMARY OF THE ITEMS OF COST AND BENEFIT IN COBA

Introduction 11.1 This Chapter describes how the program brings together the various elements of the appraisal and presents the

results in summary tables. Historically, the program has accepted input and worked in resource costs and even with the move to the ‘willingness-to-pay’ calculus necessary for the appraisal of multi-modal schemes this has not changed. Table 14 - ‘Conversion of Travel Costs to Market Prices by Vehicle Category’, shows how the tax elements are added to the resource costs of the user benefits. Tables 15A to C summarise the results (in market prices) in willingness-to-pay terms in a form compatible with ‘Transport Appraisal and the New Green Book’ (WebTAG Unit 2.7.1).

11.2 It is important to note that COBA is only able to allocate the elements of the appraisal that the program

calculates. There may be other significant costs and benefits that should be included in the decision making process (see paragraph 11.8).

Table 14, Phase 16 - ‘Conversion of Travel Costs to Market Prices by Vehicle Category’ 11.3 This Table (see Table 11/1) shows the calculations necessary to convert the time and vehicle operating cost

changes calculated in resource costs to market prices. The individual components given in Tables 9A to F of the output are presented under the TEE categories and converted to market prices by the appropriate tax correction factors.

Table 15A, Phase 16 - ‘Economic Efficiency of the Road System in Market Prices (TEE Table)’ 11.4 This is an adaptation of the TEE Table (see WebTAG Unit 3.5.2, The Transport Economic Efficiency Sub-

Objective). Table 11/2 shows how the elements of the TEE Table calculated by COBA are transferred from Table 14 and combined with the Delays During Construction and Maintenance Delay Savings to produce the ‘Net Consumer User Benefit’ and ‘Net Business Impact’.

11.5 COBA takes the input values for the Construction Delays and Maintenance Delay Savings (entered as

resource costs), converts to market prices and allocates between ‘Consumers’ and ‘Business’ in proportion to the Consumer and Business User (Time and VOC) benefits of the scheme under normal operating conditions.

Chapter 11 Volume 13 Section 1 A Summary of the Items of Cost and Benefit in COBA Part 2 The Valuation of Costs and Benefits __________________________________________________________________________________________________

__________________________________________________________________________________________________ 11/2 The COBA Manual June 2006

TIME OPERATING FUEL OPERATING OTHER From

Table VEHICLE

CATEGORY WORK COMM/

OTHER

TOTAL TIME

WORK COMM/OTHER WORK COMM/

OTHER

TOTALOPER. COSTS

9A 9B

9E

Personal Travel CAR

Private LGVTOTAL

Adjustment MARKET PRICE

PSV


Σ

Σ x t Σ = AA

Σ x t Σ = GG

Σ Σ x t

Σ = BB

Σ x t Σ = HH

Σ Σ(row)

Σ

Σ(row) Σ=

Σ

see note viΣ = CC

-

Σ

Σ x tFΣ = DD

-

Σ

Σ x t Σ = EE

-

Σ

Σ x tNΣ = FF

-

Σ

Σ(row) Σ -

9B 9C 9D

Freight Freight LGV

OGV1 OGV2

TOTAL Adjustment

MARKET PRICE

Σ Σ x tΣ =II

-

Σ Σ (row)

Σ

Σ see note viΣ = JJ

-

Σ Σ x t Σ =KK

-

Σ

Σ(row) Σ

9E

Private Sector Operating Costs


Σ x tΣ =LL

-

Σ(row) Σ

see note viΣ = MM

-

Σ x t Σ = NN

-

Σ(row) Σ

Totals Σ Σ Σ Σ Σ Σ Σ Σ

THIS ANALYSIS IS BASED ON ……………….. TRAFFIC GROWTH AND .………………. ECONOMIC GROWTH COSTS ARE IN ( PV Year ) PRICES IN MULTIPLES OF A THOUSAND POUNDS AND ARE DISCOUNTED TO (PV Year) EVALUATION PERIOD (evaluation period) YEARS FIRST SCHEME YEAR …… CURRENT YEAR ….. DISCOUNT RATE (discount rate) PERCENT FOR (years) YEARS THEREAFTER (discount rate) for (years) THEREAFTER (discount rate) PERCENT

Notes:

(i) ‘t’ is the average rate of indirect tax on final consumption in the economy; (ii) ‘tF’ is the rate of indirect tax on fuel as a final consumption good; (iii) ‘tF∋’ is the rate of indirect tax on fuel as an intermediate consumption good; (iv) ‘tN’ is the rate of indirect tax on non-fuel vehicle operating costs as a final consumption good; (v) ‘tN∋’ is the rate of indirect tax on non-fuel vehicle operating costs as an intermediate consumption good; (vi) The adjustment for Work Operating Fuel is: Σ Total x ( 1 + tF∋ ) x ( 1 + t ) - Σ Total.

Table 11/1: Conversion of Travel Costs to Market Prices by Vehicle Category

(Table 14, Phase 16 of the COBA output)



IMPACT TABLE REF TOTAL CARS &

PRIVATE LGVs

GOODS VEHS &

BUS. LGVs

BUS AND COACH

CONSUMER USER BENEFITS

User Benefits

Travel time = ∑(row) BB - HH

Vehicle operating costs = ∑(row) DD + FF - -

Travel time and vehicle operating costs:

During construction See note (ii) -

During maintenance See note (ii) -

NET CONSUMER USER BENEFITS (1) = ∑(column) ∑ - ∑

BUSINESS USERS

User Benefits

Travel Time = ∑(row) AA II GG + LL

Vehicle operating costs = ∑(row) CC + EE JJ + KK -

Travel time and vehicle operating costs:

During Construction See note (ii)

During Maintenance See note (ii)

Subtotal (2)

Private Sector Provider Impacts

Operating Costs (3) = ∑(row) MM + NN

Other Business Impacts

Developer and Other Contributions (4) - -

NET BUSINESS IMPACT (5) = (2)+(3) + (4) ∑ ∑ ∑ ∑

TOTAL Present Value of Transport Economic Efficiency Benefits (6) = (1)+(5) ∑ ∑ ∑ ∑

THIS ANALYSIS IS BASED ON ……………….. TRAFFIC GROWTH AND .………………. ECONOMIC GROWTH COSTS IN ( PV Year ) PRICES IN MULTIPLES OF A THOUSAND POUNDS AND DISCOUNTED TO (PV Year) EVALUATION PERIOD (evaluation period) YEARS FIRST SCHEME YEAR …… CURRENT YEAR ….. DISCOUNT RATE (discount rate) PERCENT FOR (years) YEARS THEREAFTER (discount rate) PERCENT for (years) THEREAFTER (discount rate) PERCENT

Notes: (i) Items AA to NN referenced on Table 11/1 (ii) COBA takes the input values for the Construction Delays and Maintenance Delay Savings, converts to

market prices (multiplies by 1 + t) and allocates between ‘Consumers’ and ‘Business’ in proportion to the Consumer and Business User (Time and VOC) benefits of the scheme under normal operating conditions.

Table 11/2: Economic Efficiency of the Road System in Market Prices

(Table 15A, Phase 16 of the COBA output)



Table 15B, Phase 16 – ‘Public Accounts’ 11.6 This Table (see Table 11/3) shows the summary of Public Accounts (see WebTAG Unit 3.5.1, Public

Accounts).

IMPACT TABLE REF TOTALS

LOCAL GOVERNMENT FUNDING

Operating costs (1 + t) x (Maintenance Expenditure Savings)

Investment Costs (1 + t) x (Scheme Costs less Maintenance Capital Cost Savings)

Developer and Other Contributions

NET IMPACT (7)

CENTRAL GOVERNMENT FUNDING

Operating costs (1 + t) x (Maintenance Expenditure Savings)

Investment Costs (1 + t) x (Scheme Costs less Maintenance Capital Cost Savings)

Developer and Other Contributions

Indirect Tax Revenues (see calculation paragraph 11.7)

NET IMPACT (8)

Present Value of Costs (PVC) (9)

THIS ANALYSIS IS BASED ON ……………….. TRAFFIC GROWTH AND .………………. ECONOMIC GROWTH COSTS IN ( PV Year ) PRICES IN MULTIPLES OF A THOUSAND POUNDS AND DISCOUNTED TO (PV Year) EVALUATION PERIOD (evaluation period) YEARS FIRST SCHEME YEAR …… CURRENT YEAR …..DISCOUNT RATE (discount rate) PERCENT FOR (years) YEARS THEREAFTER (discount rate) PERCENT for (years) T

HEREAFTER (discount rate) PERCENT

: Notes: (i) Because tax rates change over time the values entered in this table cannot necessarily be derived

from a simple factoring of the values in Table 11/1; (ii) Costs entered into COBA are in Resource Cost terms;

(iii) ‘t’ is the average rate of indirect taxation in the economy.

Table 11/3: Public Accounts (Table 15B, Phase 16 of the COBA output)



To Calculate the Indirect Tax Revenues 11.7 The calculation of the change in Indirect Tax Revenues is given below. For an explanation of the

elements CC, JJ etc. and definitions of the tax rates used in the calculation see Table 11/1. The 2002 defaults are:

t = 0.209, tF Cars = 3.45, tF OGV = 3.10, tF∋ Cars = 2.77, tF∋ OGV = 2.49, tN = 0.175, and tN∋ = ZERO. Because tax rates change over time the calculation must be carried out for each year of the appraisal.

For Work Trips the change in Indirect Tax Revenue in 2002 is:

= CC x tF∋Cars / (1 + tF∋Cars) + ( JJ + MM) x tF∋OGV / (1 + tF∋OGV)

Using defaults for 2002 the equation is reduced to:

= CC x 0.734 + ( JJ + MM) x 0.713

For Non-Work Trips (‘Commuting’ and ‘Other’) the change in Indirect Tax Revenue in 2002 is:

= DD x (tF - t) / (1 + tF) + FF x (tN - t) / (1 + tN)

Using defaults the second term is negative and the equation reduces to:

= DD x 0.728 - FF x 0.029

The entry in Table 15B is the sum of the Work and Non-Work calculations above. If more fuel is used the value calculated will be negative as the Government receives more tax revenue.

Table 15C, Phase 16 – ‘Analysis of Monetised Costs and Benefits’ 11.8 Table 11/4 summarises the monetised costs and benefits as calculated by COBA. There may also be other

significant costs and benefits, some of which cannot be presented in monetised form (see WebTAG Unit 3.5.1, Public Accounts). Where this is the case, the analysis presented in Table 11/4 does NOT provide a good measure of value for money and should not be used as the sole basis for decisions.



IMPACT TABLE REF TOTALS

TEE Benefits

Consumer User Benefits (1)

Business Benefits (2)

Private Sector Provider Impacts (3)

Accident Benefits Emissions Benefits

(10)

(10A)

Present Value of Benefits (PVB) (11) (1) + (2) + (3) + (10) + (10A)

Government Funding Present Value of Costs (PVC) (9)

Overall Impact

Net Present Value (NPV) (11) – (9)

Benefit to Cost Ratio (BCR) (11) / (9)

THIS ANALYSIS IS BASED ON ……………….. TRAFFIC GROWTH AND .………………. ECONOMIC GROWTH COSTS IN ( PV Year ) PRICES IN MULTIPLES OF A THOUSAND POUNDS AND DISCOUNTED TO (PV Year) EVALUATION PERIOD (evaluation period) YEARS FIRST SCHEME YEAR …… CURRENT YEAR …..DISCOUNT RATE (discount rate) PERCENT FOR (years) YEARS THEREAFTER (discount rate) PERCENT for (years) THEREAFTER (discount rate) PERCENT

Note: There may also be other significant costs and benefits, some of which cannot be presented in monetised form. Where this is the case, the analysis presented above does NOT provide a good measure of value for money and should not be used as the sole basis for decisions.

Table 11/4: Analysis of Monetised Costs and Benefits (Table 15C, Phase 16 of the COBA output)

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