SP5 Isolated intersection improvements

Introduction

These procedures (SP5) provide a method of evaluating the economic efficiency of isolated intersection improvements and are intended for projects that have an undiscounted capital cost up to the limits specified in section 4.2.

Accident analysis involving an isolated intersection is only to be undertaken where the site has an accident history of:

• four or more non-injury accidents
• one injury and three or more non-injury accidents, or
• two or more injury accidents.

The most recent 5 calendar year accident history for the site should be used. Detailed accident listings, collision diagrams, a description of common factors in the accidents and a diagnosis of the site factors contributing to the problem should be submitted with the evaluation.

The procedures are designed to consider one option at a time. All suitable options for the proposed works should be considered in order to select the optimal solution. In most situations this will involve incremental analysis of the benefits and costs of the different options. A description of all options considered should be provided in worksheet 1 and included in the incremental analysis; for all other worksheets, only the details for the preferred option needs to be included.

It is necessary to determine the traffic growth rate for the project. This can be done by analysing traffic count data (for at least the last 5 years and preferably for the last 10 years) or by using default values in appendix A2.5.

The worksheets use a 10% discount rate and a 25 year evaluation period. The procedure assumes that funded projects will be completed in the first year and will be in service by the start of year 2. Where costs are common to both the do minimum and the option under consideration, they are not included in the analysis. All costs are to be exclusive of GST.

Evaluation summary

Explanation for worksheet 1

Worksheet 1 provides a summary of the general data used for the evaluation and the analysis results. The information required is a subset of the information entered into LTP online.

1. Evaluator(s)/reviewer(s): Enter the full name, contact details, name of organisation, office location, etc, of the evaluator(s) and reviewer(s).
2. Project/package details: Provide a general description of the project and package (where relevant). Describe the problems with the existing intersection.
3. Location: A brief description of the project location including:
   • a location/route map
   • a layout plan of the project.
4. Alternatives and options: Describe the do minimum, which is usually the least cost option to maintain the intersection in an unimproved state. Describe the options assessed and how the preferred option will improve the intersection.
5. Timing: For purposes of the economic efficiency evaluation, the construction start is assumed to be 1 July of the financial year in which the project is submitted for a commitment to funding.
6. Economic efficiency: Enter the timeframe information, road and traffic data, posted speed limit and traffic volume entering the intersection.
7. PV cost of do minimum: Use worksheet 2 to calculate the PV cost of the do minimum. This should be the lowest cost option that will keep the road in service. It will provide no improvements.
8. PV cost of the preferred option: Use worksheet 3 to estimate the preferred option PV cost.
9. Enter the benefits values from worksheets 4 (travel time cost savings), 5 (vehicle operating cost savings) and 6 (accident cost savings). To bring the benefits up to the base date values, use the appropriate update factors supplied in appendix A12.3. The base VOC incorporates the CO₂ costs and no separate adjustment is required.
10. The national benefit cost ratio is calculated by dividing the PV of the net benefits (PV benefits of the do minimum subtracted from the PV benefits of the option) by PV of the net costs (PV costs of the do minimum subtracted from the PV costs of the option).
11. First year rate of return is calculated as the benefits in the first full year following completion divided by the project costs. The first year benefits are calculated by dividing the totals at W, Y and Z by the discount factors for travel time cost, VOC and accidents respectively. Then multiplying by 0.91 to get the present value.
12. Note: the discount factor for accidents (see explanation for worksheet 6) is different to the discount factor for VOC and travel time cost (see explanation for worksheets 4 and 5).

Table 1 Travel time cost and VOC discount factors (DF^TTC and DF^VOC) for different traffic growth rates for years 2 to 25 inclusive

Travel time cost table (19 kb)

Worksheet 1 (76 kb)

Costs of do minimum

Explanation for worksheet 2

Worksheet 2 is used to calculate the PV cost of the do minimum. The do minimum is the minimum level of expenditure necessary to keep an intersection open and generally consists of maintenance work.

In a limited number of cases, the do minimum will involve capital expenditure. The cost of any works (including investigation, design and construction) must be included in the evaluation. The costs should be discounted to present value by multiplying by the SPPWF for year 1 (0.91) and reported as one of the periodic maintenance costs.

1. Enter the historic maintenance cost data. The annual and periodic maintenance costs should be obtained from maintenance records and resealing records.
2. Calculate the PV of annual maintenance costs (a) for the do minimum by multiplying the annual cost by the discount factor of 9.52.
3. Schedule any periodic maintenance, according to the year in which this work is expected to be undertaken. Apply the appropriate single payment present worth factor (SPPWF) from table 1 below to determine the PV at time zero. Sum the PV of the periodic costs to determine the PV of total periodic maintenance costs (b).
4. Calculate the PV of the annual costs associated with operating the intersection (c) for the do minimum by multiplying the annual cost by the discount factor of 9.52. Note: operating costs must be distinct from, and in addition to, maintenance costs.
5. Calculate the PV total costs of the do minimum by adding (a) + (b) + (c). Transfer the total to A on worksheet 1.

Table 1 Single payment present worth factors (for 10% discount rate)

Single payment present worth factors table (19 kb)

Worksheet 2 (58 kb)

Costs of the options

Explanation for worksheet 3

Worksheet 3 is used for calculating the PV cost of the isolated intersection improvements.

1. Enter the capital cost (including professional services for design and supervision) of the proposed option. The cost is estimated separately on an estimate sheet, which should be attached to this worksheet. Where construction items have an estimated life of less than 25 years, the cost of the item should be multiplied by the factor (MF) given in table 1 below to obtain the total cost for that item over 25 years. Add the cost of the works together, including the adjusted capital items costs. Multiply the cost by the discount factor 0.91 and enter at (a).
2. Enter the cost of maintenance for year 1 at (b). As this is assumed to be the year that the proposed option works are carried out, this cost will commonly be the same as that for the existing maintenance strategy, as per step 2 on worksheet 2.
3. Enter the cost for annual maintenance following completion of the works. Where periodic renewal of capital items (including traffic signs, delineation, spray plastic and road markings) have been included in the cost of works at (a), these should be excluded from the maintenance cost stream. Multiply the annual maintenance costs by 8.57 to get the PV of annual maintenance costs (c) for years 2 to 25 inclusive.
4. Enter the costs of periodic maintenance. Determine which years this maintenance will be required (if at all) and enter the year, estimated cost and SPPWF (from the table in worksheet 3). Calculate the present value (estimated cost × SPPWF) for each type of cost and sum these to obtain the PV of the total periodic maintenance cost (d).
5. Calculate the PV of the annual costs associated with operating the intersection (e) for the option by multiplying the annual cost by the discount factor of 8.57. Note: operating costs must be distinct from, and in addition to, maintenance costs.
6. The sum of (a) + (b) + (c) + (d) + (e) gives the PV total cost of the option, B. Transfer B for the preferred option to worksheet 1.

Table 1 Multiplication factors for items with an estimated life of less than 25 years

Multiplication factors table (27 kb)

Worksheet 3 (48 kb)

Travel time cost savings

Explanation for worksheet 4

This worksheet is used for calculating travel time cost savings from modifying or changing the control of an intersection eg, from priority control to traffic signals. Intersection analysis requires modelling to be used for both the do minimum and project option. It is not allowable to compare calculated delay and measured delay. Instead, the measured delay must be used to calibrate the calculated delay.

The annual travel time costs for the do minimum and the project option are to be calculated either using direct output from a suitable computer programme or by aggregating outputs for representative time periods. Output and notes should be attached. Alternatively, fill in the tables in worksheet 4 as per the instructions below.

Default travel time costs (TTC) are in the table 1 below for the standard road types.

Table 1 Travel time cost for standard traffic mixes for all periods combined (July 2002)

The travel time cost (TTC) calculations start at the beginning of year 2 (following completion of construction works in year 1) and finish at the end of year 25.

For each six year time period:

1. Enter the value of the TTC at the mid-point for the do minimum (1). For example, in the first six year period (years 2 - 7), the end of year 4 is the mid-point; in years 20 - 25, the mid-point is the end of year 22.
2. Enter the value of the TTC at the mid-point for the project option (2).
3. Calculate the 'mid-point benefits' (3) by subtracting the option TTC (2) from the do minimum TTC (1) from to obtain c¹, c², c³, and c⁴.
4. Using the formula provided, calculate the PV of the travel time cost savings for the project option C. In the formula, each mid-point benefit value is multiplied by 6 to obtain the 6 yearly total, which is then discounted to get the PV for each 6 year interval. The results for each 6 year period are summed to obtain the PV total travel time savings, C. Transfer C for the preferred option to worksheet 1.

Travel time cost table (21 kb)

Worksheet 4 (49 kb)

Vehicle operating cost savings

Explanation for worksheet 5

This worksheet is used for calculating vehicle operating cost savings from modifying or changing the control of an intersection eg, from priority control to traffic signals. Intersection analysis requires modelling to be used for both the do minimum and project option.

The annual VOC for the do minimum and the project option are to be calculated either using direct output from a suitable computer programme (such as SIDRA, INTANAL or SCATES) or by aggregating outputs for representative time periods. Output and notes should be attached. Alternatively, fill in the tables in worksheet 5 as per the instructions below.

For intersections, VOC are not directly proportional to growth in traffic volumes. Hence, the calculations of VOC savings are undertaken in six yearly steps and the discounted values are summed to more accurately reflect the savings over the 25 year evaluation period.

The VOC calculations start at the beginning of year 2 (following completion of construction works in year 1) and finish at the end of year 25.

For each six year time period:

1. Enter the value of the VOC at the mid-point for the do minimum (1). For example, in the first six year period (years 2 - 7), the end of year 4 is the mid-point; in years 20 - 25, the mid-point is the end of year 22.
2. Enter the value of the VOC at the mid-point for the project option (2).
3. Calculate the 'mid-point benefits' (3) by subtracting the option VOC (2) from the do minimum VOC (1) from to obtain c¹, c², c³, and c⁴.
4. Using the formula provided, calculate the PV of the VOC and CO₂ benefits for the project option D. In the formula, each mid-point benefit value is multiplied by 6 to obtain the 6 yearly total, which is then discounted to get the PV for each 6 year interval. The results for each 6 year period are summed and multiplied by a factor of 1.075 to account for CO₂, to obtain the PV total VOC and CO₂ savings, D. Transfer D for the preferred option to worksheet 1.

Worksheet 5 (49 kb)

Accident cost savings

Explanation for worksheet 6

These simplified procedures are suitable only for accident-by-accident analysis (method A in appendix A6). There must be 5 years or more accident data for the site and the number and types of accidents must meet the specifications set out in appendix A6.1 and A6.2. If not, either the accident rate analysis or weighted accident procedure described in appendix A6.2 should be used. The annual accident cost savings determined from such an evaluation are multiplied by the appropriate discount factor and entered in worksheet 1 as total E.

1. Enter number of years of typical accident rate records at (3) and the number of reported accidents in the reporting period for each of the severity categories at (4).
2. Fatal and serious severity ratio: If the number of fatal and serious accidents at the site is greater than the limiting number specified in appendix A6.1, leave line (5) blank and go to line (6). Otherwise, in line (5) enter the ratio of fatal/(fatal + serious) and serious/(fatal + serious) from the table A6.19 series (all movements, all vehicles).
3. Multiply the total fatal + serious accidents (4) by the ratios (5) to get the adjusted fatal and serious accidents (6) for the reporting period. For minor and non-injury accidents, transfer the accident numbers from (4). To get the accidents per year (7), divide (6) by (3).
4. Enter the adjustment factor for the accident trend from table A6.1(a) in line (8). Multiply (7) by (8) to obtain the accidents per year (at time zero) for each accident category (9).
5. Enter the under-reporting factors from tables A6.20(a) and A6.20(b) in line (10). Multiply (9) by (10) to get the total estimated accidents per year (11).
6. Enter the accident costs for 100km/h speed limit (12) and 50 km/h speed limit (13) for each accident category (all movements, all vehicles) from the table A6.21 series. Calculate the mean speed adjustment for the do minimum [((1) - 50) divided by 50] in (14).
7. Calculate the cost per accident for the do minimum (15) by adding (13) plus (14) and then multiplying this by the difference between accident costs in (12) and (13).
8. Multiply accidents per year (11) by (15) to get cost per accident per year (16). Add the costs for fatal, serious, minor and non-injury accidents in line (16) to get the total accident cost per year (17).
9. Determine the forecast percentage accident reduction for each accident category (18). Determine the proportion of accidents remaining [100% minus the percentage reduction in (18)] and record in (19).
10. Calculate the predicted accidents per year (20) by multiplying the accidents per year of the do minimum (11) by the percentage of accidents remaining (19).
11. Repeat the calculations from lines (12) through (15), in lines (21) through (24) using the option mean speed (2), to obtain the cost per accident for the option (24).
12. Multiply the predicted number of accidents per year (20) by the cost per accident (24) to get the total accident costs per year for each accident category in line (25). Add together the costs for fatal, serious, minor and non-injury accidents to get total accident costs per year (26).
13. Calculate the annual accident cost savings by subtracting the values in (26) from (17). Multiply the annual accident cost savings (27) - or the total from the accident rate or weighted accident analysis - by the discount factor in table 1 for the appropriate speed limit and traffic growth rate to determine the PV accident cost savings. Transfer this total, E for the preferred option to worksheet 1.

Table 1 Accident cost discount factor (DF^AC) for different traffic growth rates and speed limits for years 2 to 25 inclusive

Accident cost discount factor (30 kb)

Worksheet 6 (31 kb)

BCR and incremental analysis

Explanation for worksheet 7

Cost benefit analysis

1. Under benefits, enter the PVs for the benefits for the do minimum and for each option. Then subtract the benefits for the options from the benefits for the do minimum to get the net benefits for each option.
2. Under costs, enter the PVs for the capital, maintenance and operating costs for the do minimum and each option. Subtract the PV costs for the do minimum from the costs for each of the options to get the net costs of each option.
3. Calculate the national BCR by dividing the net benefits by the net costs.

Incremental analysis

1. Select the appropriate target incremental BCR from appendix A12.4.
2. Rank the options in order of increasing cost.
3. Compare the lowest cost option with the next higher cost option to calculate the incremental BCR.
4. If the incremental BCR is less than the target incremental BCR, discard the second option in favour of the first and compare the first option with the next higher cost option.
5. If the incremental BCR is greater than the target incremental BCR, the second option becomes the basis for comparison against the next higher cost option.
6. Repeat the procedure until no higher cost options are available that have an incremental BCR greater than the target incremental BCR. The highest cost option with an incremental BCR greater than the target incremental BCR is generally the preferred option.

Worksheet 7 (59 kb)