Brno University of Technology
Faculty of Civil Engineering
Department of Structural Economy and Management
Economic Efficiency of Flood
Protection Measures
Vít Hromádka, Eva Vítková
6th Bulgarian-Austrian Seminar 2013
Introduction
Main goal of the paper
• The paper presents the results of long-term development
of the methodology oriented on the flood protection
measures economic efficiency evaluation
Schedule of presentation
Flood protection measures
Principles of the economic efficiency assessment
Costs and benefits for valuation
Economic efficiency of the flood protection measures
assessment
• Conclusions
•
•
•
•
6th Bulgarian-Austrian Seminar 2013
Flood Protection
Nonstructural flood protection measures
•definition of flooding areas
•legislative assurance of flooding areas
•forecasting system
•early warning systems
•information of public
Structural flood protection measures
•retention
•increasing of watercourses capacity
•protection walls
•stabilization of watercourses
•regulation of forestry
•regulation of activities in agriculture
6th Bulgarian-Austrian Seminar 2013
Economic Efficiency Principles
n
NPVE = ∑
B −C
i
(
)
1
+
r
i =1
where:
NPVE Economic Net Present Value
B
in monetary units expressed benefits of the project
C
in monetary units expressed costs of the project
r
discount rate
n
lifetime of the project, the duration of the valuated
period in years
6th Bulgarian-Austrian Seminar 2013
Costs Connected With Flood
Protection Measures
Costs for economic valuation
•Investment costs
•Appreciable operating costs
•Appreciable costs caused by flood
•Other impacts
6th Bulgarian-Austrian Seminar 2013
Appreciable Costs Caused
by Flood – Loss Savings
Basic steps for the appreciable costs caused by flood
assessment:
•Assessment of value of the property in the territory
threaten by flood
•Assessment od expected damages on buildings
caused by flood – damage curves
•Flood losses prediction
6th Bulgarian-Austrian Seminar 2013
Territory Categories
• Determination of the average value of the property per
square unit of the territory
• Territory categories come out from the territory planning
documentation
Color
Mar
king
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Territory Category
Residential areas
Recreational areas
Areas of Civil Infrastructures
Green Areas
Mixed residential areas
Transport infrastructure areas
Technical infrastructure areas
Areas for production and storage
Mixed production areas
Water and water-management areas
Agricultural areas
Woodland areas
Natural areas
Mixed parts of unbuilt-up area
Mixed parts of unbuilt-up area
Specific areas
6th Bulgarian-Austrian Seminar 2013
Assessment of Value of the
Property in the Territory
• Territorial Property Index (TPI) for the category of the
territory
• Expressing the value of the property per the square
meter
TPI
VPT
TRA
Territorial Property Index
Value of Property in Territory
Total Residential Area
6th Bulgarian-Austrian Seminar 2013
Code
803 3
803 5
803 6
Name of representative
Land
acreage
Total value
(m2)
Technoeconomic
index
(CZK/m2)
(m2)
120.0
362
77,426
9,293,112
6.2
37
65,604
406,194
1,988.6
7,983
31,377
62,397,011
Property representatives –
Residential Area
Apartment buildings till 4 floor
Apartment buildings over 4 floor
Family houses
Code
Name of representative
Built-up
area
801 1
Buildings for health care and services
801 2
Buildings for municipal services and
3
Apartment buildings till 4 floor
hygiene 803
803 5
Apartment buildings over 4 floor
801 3
family houses
Buildings 803
for6 education
and training
801 4
Buildings for
education 801 3
801 1
801 2
801 4
Buildings for health care and services
Buildings for municipal services and
hygiene
Buildings for education and training
Buildings for science, culture and
education
Buildings for physical education
Buildings for administration
Buildings for commerce and public
catering
Buildings social care
Buildings manufacturing industry, special
Areas for Physical Education uncovered
Additional objects
Objects of technical equipment
Totally
science,
culture
and
Buildings for physical education
801 6
Buildings 801
for6 administration
801 8
8
Buildings 801for
commerce and public
catering 801 9
801 5
812 1
3
Buildings 823
social
care
812 6
822 5
812 1
Buildings manufacturing industry, special
823 3
Areas for Physical Education uncovered
812 6
Additional objects
822 5
Objects of technical equipment
Totally
Land
acreage
Total value
(m2)
362
37
7,983
45
4
Technoeconomic
index
(CZK/m2)
77,426
65,604
31,377
120,508
120,508
18
(CZK)
9,293,112
406,194
62,397,011
2,087,356
77,670
646
18
84,177
134,833
4,940,951
600,175
19
16
130
44,239
79,085
88,282
510,705
344,717
2,159,358
23
1
485
186
45
10,000
52,948
90,614
1,537
26,671
2,093
438,515
44,114
745,526
4,953,052
90,226
89,088,682
17.3
801 5
801 9
Built-up
area
(m2)
120.0
6.2
1,988.6
17.3
0.6
0.6
58.7
4.5
58.7
4.5
11.5
11.5
4.4
24.5
4.4
24.5
8.3
0.5
485.0
185.7
43.1
2,959
8.3
0.5
485.0
45
4
646
19
16
130
23
1
485
(CZK)
120,508
2,087,356
120,508
77,670
84,177
4,940,951
134,833
600,175
44,239
510,705
79,085
344,717
88,282
2,159,358
52,948
438,515
90,614
44,114
1,537
745,526
185.7
186
26,671
4,953,052
43.1
45
2,093
90,226
6th Bulgarian-Austrian Seminar 2013
2,959
10,000
89,088,682
3 563
547 EUR
Expected Losses Caused by
Flood – Damage Curves
Dependence of damage of the property on:
•depth of water
•duration of the flood
•influence of subsoil
C1
podložíbearable
příznivé - únosné
C1 –– subsoil
y = -7.412x 2 + 53.565x
y = % poškození objektu
100
80
y = -3.8359x 2 + 32.496x
60
40
y = -0.3327x 2 + 15.513x
20
0
0
0.5
1
1.5
2
2.5
3
x = depth
of watervody
(m) [m]
x = hloubka
6th Bulgarian-Austrian Seminar 2013
3.5
4
Flood Losses Prediction
For derivation possible to carry out following steps:
•The assessment of the damage (in %) for particular
property representatives in dependence on quality of
subsoil, duration of flood and depth of water
•The assessment of the loss on particular
representatives caused by flood
•The derivation of the dependence of the total loss on
property in the territory on the quality of subsoil,
duration of the flood and the depth of water
6th Bulgarian-Austrian Seminar 2013
Name of representative
Damage
%
Reproduction
price CZK/ha
Loss totally
CZK/ha
Apartment buildings till 4 floor
17,0192
9 293 112
1 581 613
Apartment buildings over 4 floor
17,0192
406 194
69 131
Flood Losses Prediction
familyCalculation
houses
62 397
011
of losses on representatives56,7288
of the property
in residential
35 397 076
areas:
Buildings
for health care and services
2 087 356
51,5440
1 075 907
•Bearable
subsoil
Buildings for municipal services and hygiene
77 670
51,5440
40 034
•Duration of the flood till 1 day
Buildings
for education
training
4 940 951
•Depth
of waterand
4m
51,5440
2 546 764
Name of representative
Damage Reproduction price
Loss totally
Buildings for science,
culture and education
51,5440
%
CZK/ha 600 175
CZK/ha
309 354
Apartment buildings
till 4 floor
9 293 112
17,0192
1 581 613
Buildings for physical
education
510
705
51,5440
263 238
Apartment buildings over 4 floor
406
194
17,0192
69 131
family houses
62 397 011
56,7288
35 397 076
Buildings for administration
344
717
51,5440
177 681
Buildings for health care and services
2 087 356
51,5440
1 075 907
Buildings for municipal services and hygiene
77 670
51,5440
Buildings for commerce
and
public
ery
2 159 35840 034
51,5440
1 113 020
Buildings for education and training
Buildings for science, culture and education
Buildings for physical education
Buildings for administration
Buildings for commerce and public ery
Buildings social care
Buildings manufacturing industry, special
Areas for Physical Education uncovered
Additional objects
Objects of technical equipment
51,5440
51,5440
51,5440
51,5440
51,5440
51,5440
59,4568
29,1792
59,4568
Buildings social care
51,5440
Buildings manufacturing industry, special
59,4568
Areas for Physical Education uncovered
29,1792
Additional objects
59,4568
Objects of technical
equipment
Total loss of territory representative
50,7528
50,7528
6th Bulgarian-Austrian Seminar 2013
Total loss of territory representative
4 940 951
600 175
510 705
344 717
2 159 358
438 515
44 114
745 526
4 953 052
90 226
2 546 764
309 354
263 238
177 681
1 113 020
226 028
26 229
217 538
2 944 926
438 515
226 028
44 114
26 229
745 526
217 538
4 953 052
2 944 926
45 792
90 226
46 034 331
45 792
1 841 46
373034
EUR
331
Derivation of the
Dependence of the Total Loss
• Usage of regression analysis
• Dependence on:
o Quality of subsoil
o Depth of water
o Duration of the flood
6th Bulgarian-Austrian Seminar 2013
Economic Efficiency of the
Flood Protection
•
Main index is the Economic Net Present Value (NPVE)
m

0
I
NPVE = ∑
p
C
−
C
j
ij
ij  − IC
i ∑
i =1 (1 + r )  j =1

n
1
(
)
where
NPVE Economic Net Present Value
IC Investment costs
j - kind of costs in zero option in i - time period
C0ij
CIij j - kind of costs in investment option in i - time period
r Discount rate
n Life time of the investment project, event. duration of the
valuated project’s time period (in years)
m Number of costs identified in the frame of the projects
pj Probability of j - cost, it must be Σpj = 1
6th Bulgarian-Austrian Seminar 2013
Conclusions
Basic problems to solve
•Prediction of flood intensity and frequency
•Prediction of damages caused by flood
•Prediction of prices development
•Possibilities of usage for general kind of the territory
6th Bulgarian-Austrian Seminar 2013