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Economic Feasibility Analysis for Central Expressway Project

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Economic Feasibility Analysis for Central Expressway Project Economic Feasibility Analysis for Central Expressway Project Final Report Transportation Engineering Division Department of Civil Engineering University of Moratuwa April 2016 Economic Feasibility Analysis for Central Expressway Project Final Report Transportation Engineering Division Department of Civil Engineering University of Moratuwa April 2016 1 Table of Contents 1. Project Description .................................................................................................................. 1 1.1. Expressway Network in Sri Lanka ..................................................................................... 1 1.2. Introduction ...................................................................................................................... 1 1.3. Expressway Alignment Selection ..................................................................................... 2 1.3.1. Trace from Kadawatha to Gampaha ...................................................................... 3 1.3.2. Trace from Gampaha to Dambulla ......................................................................... 3 1.3.3. Proposed trace for Central Expressway ................................................................. 4 1.4. Economy and Transport Sector Overview ....................................................................... 6 2. Traffic Demand Analysis .......................................................................................................... 8 2.1. Traffic Forecasting Model ................................................................................................. 8 2.1.1. Study Area ................................................................................................................ 8 2.1.2. Base Year Network ................................................................................................ 10 2.1.3. Future Year Network ............................................................................................. 10 2.1.4. Assignment ............................................................................................................ 17 2.1.5. Central Expressway Toll Strategy .......................................................................... 19 2.2. Forecasted traffic on the Central Expressway ............................................................... 19 2.2.1. Base Case ............................................................................................................... 21 2.2.2. Project Case ........................................................................................................... 21 2.2.3. Scenario 1: Section1 (Kadawatha to Mirigama) ................................................... 23 2.2.4. Scenario 2: Section12 (Kadawatha to Kurunegala with Ambepussa Link) ......... 25 2.2.5. Scenario 3: Section123 (Kadawatha to Kurunegala with Pothuhara- Galagedera and Ambepussa Link) ........................................................................ 27 2.2.6. Scenario 4: Section124 (Kadawatha to Dambulla with Ambepussa Link) .......... 29 2.2.7. Scenario 5: Section1234 (Complete CE Trace)..................................................... 32 i 3. Economic Analysis .................................................................................................................. 35 3.1. Economic evaluation assumptions and parameters ..................................................... 35 3.1.1. Analysis period ....................................................................................................... 35 3.1.2. Traffic Modelling Results ....................................................................................... 35 3.1.3. Discount rate ......................................................................................................... 42 3.2. Estimation of Economic value of Project cost .............................................................. 42 3.2.1. Construction cost estimation ................................................................................ 42 3.2.2. Operating and maintenance cost estimation ...................................................... 43 3.2.3. Economic value of cost ......................................................................................... 43 3.3. Estimation of Economic value of Benefits ..................................................................... 44 3.4. Cost Benefit Analysis....................................................................................................... 47 3.4.1. Present value of cost ............................................................................................. 47 3.4.2. Present value of Benefits ...................................................................................... 47 3.4.3. Economic indicators .............................................................................................. 48 3.5. Alternative Analysis ........................................................................................................ 48 3.5.1. Economic analysis of Alternative Scenarios ......................................................... 49 4. Risk Assessment ..................................................................................................................... 50 4.1. Sensitivity analysis .......................................................................................................... 50 4.1.1. Sensitivity analysis for discount rate .................................................................... 56 4.2. Toll Revenue Forecast .................................................................................................... 58 5. Conclusion .............................................................................................................................. 59 APPENDIX 1 ........................................................................................................................................ i APPENDIX 2 ....................................................................................................................................... ii APPENDIX 3 ...................................................................................................................................... iii APPENDIX 4 ....................................................................................................................................... v APPENDIX 5 ...................................................................................................................................... ix ii List of Tables Table 1. Interchange Locations ...................................................................................................... 2 Table 2. Sri Lanka GDP 2002-2014 (Rs, mn)................................................................................... 6 Table 3. Sri Lanka Road Network .................................................................................................... 7 Table 4: NESTM Network Parameters .......................................................................................... 13 Table 5: Future Year National Road Road Expansions ................................................................ 13 Table 6: Expressway Connectivity roads in Kandy Area .............................................................. 15 Table 7: User classes assigned to the network ............................................................................ 17 Table 8: Network Routing Parameters (2012 Rs Values) ............................................................ 18 Table 9: Current Tolling Stratergy by RDA ................................................................................... 19 Table 10: Trip growth rates in NEP Estimations .......................................................................... 20 Table 11: Vehicle trips by Forecasted Year with CAGR ............................................................... 22 Table 12: Alternatives scenarios and sections considered ......................................................... 22 Table 13: Central Expressway Vehicle Volumes Between IC by Year for Scenario 1 ............... 23 Table 14: Central Expressway Vehicle Volumes Between IC by Year for Scenario 2 ................ 25 Table 15: Central Expressway Vehicle Volumes Between IC by Year for Scenario 3 ................. 27 Table 16: Central Expressway Vehicle Volumes Between IC by Year for Scenario 4 ................. 30 Table 17: Central Expressway Vehcile Volumes Between IC by Year for Scenario 5 ................. 32 Table 18. Base case ‘Do Minimum’ Traffic Modelling Results .................................................... 36 Table 19. Traffic Modelling Results: Scenario 1 ........................................................................... 37 Table 20. Traffic Modelling Results: Scenario 2 ........................................................................... 38 Table 21. Traffic Modelling Results: Scenario 3 ........................................................................... 39 Table 22. Traffic Modelling Results: Scenario 4 ........................................................................... 40 Table 23. Traffic Modelling Results: Scenario 5 ........................................................................... 41 Table 24. Summary of Construction Cost for the Expressway Project ....................................... 42 Table 25. Travel Time Savings from the Expressway (Scenario 5) .............................................. 44 Table 26. Value of Time for
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