Assessment of Transportation Infrastructure: Roads and Bridges Yu.V. Kozyr, RSA, General Director of Kopart 36-86, Greena street, Моscow 117628, kozyr@kopart.ru Bangkok, July, 2007
Transformation of commercial benefits to value under income approach
If you know sources of commercial benefits, you can transform them to assess commercial efficiency of construction of non-commercially used roads For the state/municipalities: NPV = - road construction costs – capitalized portion of repairs costs + expected total increased receipts due to road construction (higher lease payments on state-owned real estate facilities, higher land tax, higher value of the state property in its interest in newly built real estate facilities) + expected reduced maintenance and operating costs related to publicly owned municipal enterprises (transport enterprises and utilities) and emergency services (police, ambulances, firefighters) For private investors: NPV = - road construction costs + expected total increased receipts due to road construction (an increase in people traffic, higher sales of newly built real estate facilities)
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Example of bridge evaluation based on comparative approach
Facilities to be evaluated: Construction structures of motorway bridge Location of real estate facility: Russia, Moscovskaya Oblast, Khimky Rights to be evaluated: Title Ground for evaluation Contract Purpose of evaluation: Evaluation of market value of the title to real estate to disclose in financial statement for the end of a financial year Evaluation objectives Evaluation of market value of the title to real estate based on application of a number of approaches Date of evaluation: 31 July 2004 Date of inspection of a facility to be evaluated 12 August 2004 Dates of work from 19.08.2004 to 01.09.2004 Date of report issue 01.09.2004 Carrying value The total amount of RUB 91,673,467 gross of VAT, including structures of the whole bridge, superstructure of accesses, excavations and other infrastructure elements Available limitations on titles N/A
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DESCRIPTION OF ASSESSABLE FACILITY
Design of АО Skanska «Bridge «IKEA», Moscow, Russia No. 01-0300 was issued 18.10.99 and provided for construction of a three span motorway bridge with "traffic on top", of 114 m length, 8.8 m wide with two buttresses. Medium buttress height from the edge of foundation – 5.5 m Buttresses – reinforced-concrete, solid-cast Abutments – reinforced-concrete, solid-cast. Length between buttresses : 34,0 – 46,0 – 34,0 м. Bridge superstructure – Double T- metal beams with reinforced-concrete paving slabs Pedestrians bridge superstructure – reinforced-concrete
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DESCRIPTION OF ASSESSABLE FACILITY (continued)
Bridge structures composition: columns, beams, slabs, etc. Material Specifications: Concrete В 30 (К 35); steel bars А III (А400Н), AIV (А500W), Steel structures: binding bolts St52-3, welded beams and columns St52-3 or S355JRG2 , Square pipes S355J2H, Hot-rolled sections St37-2, St52-3 or S355J2 Corrugated sheet St37-2, hot dipped galvanized grills, bolts 8,8 (DIN931) hot dipped galvanized screws 8,8 (DIN934) hot dipped galvanized washers (DIN126)
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Composition of assessable facilities
No. п/п Names of assessable facilities Quantity Marking Notes 1 Double T- metal roadway bearers 36 pcs. (4 m – 18 pcs., 8 m-12 pcs., 24 m – 6 pcs.) along 34 m spans primary bearing members: I1300-12-550*25-700*30 intermediary: I1100-12-550*25-700*35 along 46 m span primary bearing members: I1300-12-550*25-800*35 intermediary: I1100-12-550*25-800*35 Total steel amount – 270 tonnes 2 Floor slabs (reinforced concrete bridge paving) 30 (slab marking) 1-В/…; 1/Б/… Total volume – 290 cub. m, reinforcements of floor slabs– 50 tonnes 3 Metal slabs 21 (12 slabs without outlets and 9 slabs with welded elements) Without marking For welded fasting of roadway bearers sizes about 0,8х0,6х0,030 (0,035) 4 Bridge structure, reinforced concrete, corrugated 1 Without marking Length about 18 LM cross section about 0.6 sq. m
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Location of assessable facility
The assessable facility is located at the IKEA warehouse in Khimki, Moskovskaya Oblast, about 3.5 km away from the Moscow outer motorway. Traffic accessibility is good. Access to loading devices and vehicles is in place. Shipment of assessable structures during purchase-sale is in place
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TECHNICAL CLASSIFICATION OF MOTOR ROADS OF GENERAL USE
According to technical classification of motor roads of general use the assessable structures of a motor bridge can be used for a motor road of category II with two traffic lanes of 3.75 m width and with no central dividing strip Class of К load for АК standard load should be accepted as equal to: For motor roads I А, IБ, IВ, category I I – 11.5 (kN); For motor roads categories I I I and I V –10.0 (kN); For motor roads category V – 6 (kN); For bridge structures and pipes on roads of all categories – 14(kN) For wooden bridges - 11.3 (kN)
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Traffic intensity
Road category allows for determination of motor bridge traffic intensity of less than 4,000 vehicles per day Estimated speed – 100…120 km/h. This data can be used to estimate the frequency of road repairs
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COST PARAMETERS OF MOTOR BRIDGES OF CATEGORY II
Information about a similar facility No.1: Urals news «Bridge length is 220 m. ….Tentative cost of a motor bridge is RUB 100 million.» Information source: toz.khv.ru/template.php Unit cost: 100 000 000 / 220 = RUB 454,545/ LM
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COST PARAMETERS OF MOTOR BRIDGES OF CATEGORY II (continued 1)
Information about a similar facility No.2: «The overall length of the bridge crossing is 0.7km, the bridge length is 170 LM and its estimated cost is about RUB 150 million at current prices. With such considerable construction costs and relatively low prospective traffic intensity of 800 vehicles per day ( including cargo traffic) the payback period will be about 15 years which is twice as much as what is acceptable. Taking into consideration the shortage of finances in the road fund, the construction of a new bridge crossing is not feasible in the short run ». Information source: http://government.mosreg.ru Unit cost: 150 000 000 / 170 = RUB 882 353 /LM. Information about a similar facility No.3: «The bridge crossing of 391 m costing RUB 215 million has become the longest crossing». www.volga-astrakhan.ru Unit cost : 215 000 000 / 391 = RUB 549 872 LM
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Conclusion
Based on the study of costs of today’s bridges available on various Internet sites a tentative average unit cost is determined (refer to the above data): UNIT COSTS: Length 170 m – RUB 882 353 /LM Length 220 m – RUB 454 545 /LM Length 391 m – RUB 549 872 /LM Average unit cost – RUB 628 923 /LM
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Final calculation (comparative approach)
Average unit price – RUB 628 923 /LM Bridge length – 114 m Total cost of construction of the assessable bridge : 114 х 628 923 = RUB 71 697 222 million
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Commercially used roads: valuation for owners
Prw – road value for owners, - average number of cars travelling on the road per day (traffic), - average distance of one trip, p – payment per 1 km M – expected operating time for the road, Ce1 – operating costs per 1 year, gp – expected growth rate of payments, goc – expected growth rate of operating costs, r – discount rate for payments, rf – risk free rate.
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Commercially used roads: valuation for users
Pruextra – road extra value for users in comparison with value of free charge road, tfc – time for moving of km, if use free charge road, tc – time for moving of km, if use charge road (tc < tfc), ptu – time unit value, cu – user’s costs (gas oil + depreciation of car), gpt – expected growth rate of time unit value, gcu – expected growth rate of user’s costs, cu - % savings, an account of time saved when using a toll road (i.e. cu > 0, if tc < tfc)
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Final Summary
On a final note, I would like to sum up the principal point covered during this presentation: First of all, it’s extremely important to identify precisely who will benefit Secondly, one must pinpoint what type of value is to be determined Finally, having done this, one must apply one of the following methods: Depreciated Replacement Cost (DRC); Discounted Cash Flow of Beneficiaries
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