Financial viability evaluation for a toll road project considering traffic volume-serviceability interactions

Tanaphat Jeerangsuwan, Purdue University

Abstract

Socioeconomic growth in any region requires the continuous development and expansion of its transportation network. The limited financial capabilities of public owners gave rise to the Public-Private Partnership (PPP) approach as an innovative project procurement methodology to attract private investment to highway projects. Nonetheless, many of the privately-financed road projects have suffered from operating deficits and therefore have had difficulties in fulfilling their construction debt obligations. These difficulties are mainly attributed to the limitations of existing financial evaluation approaches, which result in the overestimation of operating toll revenue and the underestimation of the project life cycle costs such as maintenance and rehabilitation expenditures. Therefore, this thesis presents a financial viability evaluation framework that utilizes a modified User Equilibrium traffic assignment algorithm to estimate toll road traffic demand considering its interactions with levels of service. Traffic flows in transportation network links are determined using a new performance function that represents the user's route choice which is a function of the travel time, pavement serviceability and the user's trip expenses. The proposed framework also considers the effects of the rehabilitation maintenance programs on project financial viability, since the demand estimation model takes into consideration the deterioration of the pavement serviceability due to the traffic flows on each link. This makes possible the estimation of the maintenance costs and times and the evaluation of the effects of the rehabilitation programs on the traffic demand. Sensitivity analyses are performed to validate the model capabilities in supporting private and public entities as well as financial institutes in selecting the optimal capital structure and design parameters such as toll rates and the traffic capacity of a PPP highway infrastructure project.

Degree

M.S.C.E.

Advisors

Kandil, Purdue University.

Subject Area

Civil engineering

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