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Annex 4: AECOM BCR Report
Project:
Northumberland Challenge Fund Bid
Job No:
Subject:
Economic Appraisal
Date:
60282779
05 February 2015
Outline
This assessment details the economic aspects of the application, assessing the benefit investment in
local routes would bring. Current traffic flows in the county have been utilised to allow journey time
analysis, which influences on the conclusion of the economic assessment. The timber, quarrying and
tourism industries are reliant on a good quality and well run road network and therefore the operation of
routes in the locality is imperative.
1. List of Assumptions
Below is a list of all the assumptions made in the assessment process:
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Currently only 5 routes have been assessed where all data is available (C200 / C198 / B6320,
C205, B6320, B6342, C172 / C180).
Assume 60 year appraisal 2015-2074.
Assume traffic growth stops at the last TEMPRO and NTM year (2041).
Assume that all vehicles are travelling at the speed limit of each road.
Assume that the Do Minimum roads runs for 60 years, if the road shuts down it cannot be
included in standard journey time appraisal, only by loss of jobs/business.
Assume £350,000 cost to keep the road running for 60 years in the Do Minimum.
Assumed scheme costs occur in the year 2015.
Scheme cost assumed to be £43.2 million, no further Do Something costs have been assumed
over the 60 year appraisal.
Same journey times applied over the 60 year appraisal.
Accident benefits have not been factored into the process.
The economic assessment has been undertaken using daily traffic and hence the ‘average’
values of time and costs have been used rather than Peak values.
2. Method of Calculating benefits
Traffic Flow
The benefits of the maintenance scheme have been calculated as close as possible to TAG guidance
given the available data. No traffic models were available for use in this assessment.
Classified traffic count information was available on 5 key routes, this enabled the calculation of specific
daily traffic flows for Car and HGV which is summarised below in Table 1.
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Table 1: Key details of assessed Routes
Road
Road Numbers
Description
C200 / C198 / Kielder
Forest
Route 1
B6320
Area
Stonehaugh
Route 3
C205
(Wark
Forest
Area)
Chollerford
to
Route 4
B6320
Bellingham
Great Swinburn to
Route 6
B6342
Kirkharle
Route 8
C172 / C180
Holystone Area
Daily Car
Daily HGV
1057
55
66
32
2450
180
752
92
301
128
This traffic count data has been growthed to all forecast years up to 2041 in 5 year intervals using
TEMPRO and NTM factors. These growth factors are detailed below in Table 2 and 3
Table 2: Rural Tynedale TEMPRO growth – average weekday
Years
Factor
2015-2020
1.0224
2015-2025
1.04025
2015-2030
1.05365
2015-2035
1.06735
2015-2040
1.0882
Table 3: Rural Northeast NTM growth
Years
Factor
2015-2020
1.05
2015-2025
1.09
2015-2030
1.13
2015-2035
1.17
2015-2040
1.22
Using these factors, Car and HGV traffic flow information for all of the forecast years in the 60 years
appraisal can be calculated.
Journey Times
The length of each of the affected roads have been measured and journey times have been calculated
using the road speed using the below calculation
Time = distance / speed
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The assumption has been made that, due to the relatively uncongested nature of the roads being
assessed, the traffic will all be travelling at the speed limit. A list of the lengths, speeds and times is
detailed below in Table 4
Table 4: Route Length Speed and Time
Road
Road Numbers
Description
Route 1
C200 / C198 /
B6320
Route 3
C205
Route 4
B6320
Route 6
B6342
Route 8
C172 / C180
Kielder
Forest
Area
Stonehaugh
(Wark
Forest
Area)
Chollerford
to
Bellingham
Great Swinburn to
Kirkharle
Holystone Area
Distance (miles)
Assumed
Journey
(hr)
21.96
0.37
13.62
0.23
11.89
0.20
7.63
0.13
10.02
0.17
Time
Scheme Time Benefits
Information has been provided by NCC detailing all of the road closures which have occurred on the
roads due to their poor condition in the last 3 years. From this, an average annual road closure across
each route has been calculated, on account of instances where the roads are unusable due to
maintenance issues. This is detailed below in Table 5.
Table 5: Road Closures
Road
Road Numbers
Description
Route 1
C200 / C198 /
B6320
Route 3
C205
Route 4
B6320
Route 6
B6342
Route 8
C172 / C180
Kielder
Forest
Area
Stonehaugh
(Wark
Forest
Area)
Chollerford
to
Bellingham
Great Swinburn to
Kirkharle
Holystone Area
Number
of
closures per year
Annual closure
days per route
mile
4
1
4
1
14
15
17
7
10
20
It has been assumed that this rate of closure will continue in all future years if the scheme is not
completed. This can be seen as a robust estimate as in all likelihood the road closures would become
worse as the roads fell into further disrepair
From this number of closures per year, a difference between the do minimum (existing) and do something
(with scheme) scenarios can be calculated. If diversions are available it has been assumed that all traffic
would travel along the diversions on the days when the road is closed. If no diversions are available it has
been assumed that the traffic will not undertake their journey during any closures. The diversionary routes
are detailed below in Table 6
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Table 6: Diversion Route Length Speed and Time
Road
Road Numbers
Description
Route 1
C200 / C198 /
B6320
Route 3
C205
Route 4
B6320
Route 6
B6342
Kielder
Forest
Area
Stonehaugh
(Wark
Forest
Area)
Chollerford
to
Bellingham
Great Swinburn to
Kirkharle
Route 8
C172 / C180
Holystone Area
Distance (miles)
Assumed
Journey
(hr)
42
0.7
NONE
NONE
22
0.37
28.46
0.47
14
0.23
Time
3. Method of costs
The cost of the scheme is £43.2 million, which has been assumed to occur in the year 2015.
If the scheme is not built then maintenance costs will also be incurred over the 60 year appraisal period in
order to keep the roads in a suitable condition. These costs, which also need to be factored into the
economic assessment, have been assumed to be £350,000 a year for the duration of the appraisal.
4. Economic assessment
An abridged economic appraisal has been undertaken using the available data. For the economic
assessment the journey time and vehicle operating cost benefits have been calculated over the 60 year
appraisal period, assuming the difference in total journey costs based on the diversion routes occurring in
the set number of instances per year set out in Table 5. This has been calculated annually over the 60
years in conjunction with the values of time and vehicle operating cost factors as found within the latest
version of the TAG databook (November 2014). In all cases it has been the ‘average daily’ value which
has been used rather than specific hourly factors, as it is being applied to daily flows, times, distances
and speeds. All benefits and costs have been discounted to 2010 values as per TAG Guidance. The full
benefit appraisal can be seen below in Table 7.
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Table 7: Economic Appraisal
Benefits (2010 Prices)
Average Car
Travel Time
£45,853,146
Vehicle operating costs
£9,277,507
Business HGV
Travel Time
£4,512,700
Vehicle operating costs
£3,656,454
Total Benefit
£63,299,808
Costs (2010 Prices)
DS Costs
£36,373,241
DM Costs
-£7,741,079
Total Cost
£28,632,161
Analysis of Monetised Costs and Benefits
Total Benefit
£63,299,808
Total Cost
£28,632,161
Net Present Value
£34,667,646
Benefit Cost Ratio
2.21
Summary
Ongoing maintenance would prove costly and ineffective in comparison to comprehensive investment in
the routes. With the final BCR value calculated to be 2.21 it is clear investment would also prove
economically beneficial. A NPV of £34.7 million shows a significant return from the project, while ensuring
the roads in Northumberland outlined for improvement are able to operate efficiently. Car and HGV
drivers would benefit through reduced disruption and therefore experience lower average journey times,
presenting benefit to the individual.
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Newcastle Upon Tyne
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