Economic Analysis of Transportation Project using HDM-4 Model

Roads are the dominant mode of transportation in India. Roads carry almost 85 percent of the country’s passenger traffic and more than 62 percent of its fright traffic. Due to improvement in transportation network, reduction in transportation costs can be realized in numerous ways, such as reduction in travel time, decrease in vehicle operating costs, increased safety and reduction in the level of air and noise pollution. In addition to reduction in transportation cost, it also increase comfort to passengers and also enhancing land value. Economic analysis is a critical component of a comprehensive project evaluation methodology that considers all key quantitative and qualitative impacts of highway investments. The scope of present study consists of evaluating the impact on traffic and checking economical viability of the project. Strengthening and widening for two lanes with paved shoulder of flexible pavement road namely, Nashik-Peth Section of NH-848 is taken as a case study. In spite of heavy initial investment in strengthening and widening to two lane with paved shoulder of flexible pavement, economic analysis carried out using HDM-IV software results indicates that there is great saving towards Vehicle Operating cost (VOC) and Travel Time cost (TTC) after improvement. Economic Internal Rate of Return of 27.30% also indicate that improvement of flexible pavement is economic viable.