Infrastructure planning and management

Lecture(4)

Civil Engineering Dept.Master Program

2013-2014

Measurement of System performance

Infrastructure performance measurement

Infrastructure performance measurement must be multidimensional, reflecting the full range of social objectives set for infrastructure system . The performance of infrastructure could be measured by effectiveness, reliability, and cost.

Measurement of System performance

Infrastructure performance measurement

Cost

ReliabilityEffectiveness

Effectiveness

Capacity and delivery of services

Quality of services delivered

The system’s compliance with regulatory concern

The system’s broad impact on the community

ReliabilityA recognition of various uncertainties inherent in infrastructure’s services, is the likelihood that infrastructure effectiveness will be maintained over an extended of time or the probability that service will be available at least at specified levels through the design life

CostThe costs are incurred and paid at different times and places, by different agencies and groups(e.g., users, neighbors, taxpayers), and in monetary and nonmonetary terms . When the cost is acceptable and low, this gives indication that the performance is well.

Examples of Measures of System Reliability

Examples Measures Type of Indicator, MeasureEngineering safety factors Deterministic

Percentage contingency allowance

Risk class rating

Statistical, probabilistic

Confidence limit

Confidence probabilities

Risk functions

Demand peak indicator Composite(typically deterministic indicator of statistical variation)

Peak-to-capacity ratio

Return frequency (flood)

Fault-tree analysis

Examples of Measures of System Cost

Planning and design cost Investment,

replacement, capital, or initial cost

Construction cost

Equity

Debt

Operation cost

Recurrent or O&M cost

Maintenance cost

Repair and replacement cost

Depreciation cost

Depletion cost

Timing of expenditure

Timing and source

Discount and interest rate

Exchange rate and restrictions

Sources of fund

Service life

Losses of Value of Infrastructure Facilitates

• Due to change in demand or change in amount and type of services requirement.

Functional

• Occurring when better approaches (e.g, better equipment) are available to carry out the functions of the facility.

Technological

• Due to ordinary wear and tear, corrosion from age or usePhysical

• Due to change in the buying power of moneyMonetary

• Arising from fires, explosions, earthquakes, etcCasualty-related

• Resulting from changes in legal requirements related to the serviceability or outputs of machines and structures

Legal

Losses of Value of Infrastructure Facilitates

Condition of being antiquated, old-fashioned, or out-of-date

No longer meets current needs or expectation levels Aging, technology, standard change 2-yr old computers good example

Inability to meet changing performance requirements

Obsolescence & Service Life

“Always remember that someone, somewhere is making a product that will make your product obsolete” -Georges Doriot

“Planned obsolescence” by Vince Packard’s The Waste Makers Practice of deliberately designing products to

last for a shorter period of time Systemically doing this leads to inferior

products

Obsolescence & Service Life, What Causes It?

Technological changeRegulatory change

SDWA forced upgradesEconomic / social changesValue / behavior changes

Service vs. Physical Lives

Physical Lives: time it takes for infrastructure to wear out/fail Predicting this may be irrelevant

Service life: time actually used In general these 2 are different

Power plants become obsolete because of technology/policy changes

In some cases, tax code drives expectations

Service Lives, Connections

“Design service life” only meaningful if defined in terms of obsolescence Assumptions about lifetime will likely change

over time Infrastructure seldom abandoned before

replacement in place Expectations will increase

Need to consider expectations and deterioration functions

Service Lives, Rates of Change

Information economy is making older transport modes obsolete E.g., ground -> air shipping

How long should infrastructure last? Physical or service? “How long do you want to use it?” Where will it go when we’re done? What could we do with Roman roads now?

Service Lives, Strategies to Mitigate

Plan and design for flexibilityBuild to assure optimum performance level

is achievedMonitor change to defer obsolescenceRefurbish and retrofit early

Cost-Effectiveness Measures for Projects of Routine Nature

1.Minimize the amount of resources required TO

• Achieve a given level of service• Meet other requirements demanded of the particular

situation

2.Maximize the level of services

Aims of Cost-Effectiveness Measures

Methods for comparing and Prioritizing :Infrastructure

Alternatives

1 • Simple Cost Basis

2• Simple Cost Basis Plus

Consideration of Other Specified Engineering Factors

3• Life-Cycle Cost Basis

(usually made on a present value basis

4• Cost Basis Including

Adjustments Made for Additional Screening Criteria

5• Additional Primarily Cost-

Driven Methodologies for State and Local Infrastructure Systems

6 • Full Financial Analyses

7 • Economic Analyses (or Benefit-Cost Analyses(

8 • Multi-Dimensional Analyses

9 • Special Studies

Parameters commonly used for formulas involving an

interest rate• Interest rate per interest

period.i• Number of interest period.n

• Present sum of money.P• Future sum of money at

the end of n period (equivalent to P with

interest rate i).F

• Amount of each end-of-period payment or receipt

in uniform series of n period.

A

F

Pn

P

AAAA A

AAAA A

F

(F/P, i , n)(P/F, i , n)

(P/A, i , n)(A/P, i , n)

(F/A, i , n)(A/F, i , n)

Sample Cash Flow Diagram

Common formulas for equivalency Calculations

F/P

P/F

Single

amount

niniPF )1(),,/(

niniFP

)1(

1),,/(

n

n

ii

iniAP

)1(

1)1(),,/(

i

iniAF

n 1)1(),,/(

P/A

A/P

F/A

A/F

Uniform

series

1)1(

)1(),,/(

n

n

i

iiniPA

1)1(),,/(

ni

iniFA

Examples

A project costs $40,000,000 and takes five years to construct. If all of this money is borrowed at the beginning of construction, how much money is owed by the sponsor when the project is ready to operate? If the money is borrowed in five equal installments, how much is owed? In each case, assume 7 percent interest for money borrowed.

40M$

F??=

$069,102,56

)07.01$(40)5%,7,/()( 5

MPFPFa

F??=

8M$ 8M$8M$8M$8M$

220413,11)07.01$(8)5%,7,/(

$912,005,38

$807.0

1)07.01($8)5%,7,/)((

52

5

1

MPF

MMAFb

F=F1+F2=38,005,912+11,220,413=49,226,325M$

Homework

Solving the following question in the Handbook

6.1,6.2,6.3