Addis Ababa Science & Technology University COLLEGE OF ARCHITECTURE AND CIVIL ENGINEERING Civil Engineering Department Urban Road Users Cost Allocation: A Case Study On Addis Ababa By: SIMON G/EGZIABHER A thesis submitted to the Department of Graduate Studies of Addis Ababa Science & Technology University In partial fulfillment of the requirements for the Degree of Master of Science in Civil Engineering (Road and Transport Engineering) ADVISOR ALEMAYEHU AMBO, PhD November, 2017 i Urban Road Users Cost Allocation: A Case Study On Addis Ababa APPROVAL PAGE As members of the examining board of the final M.Sc. Open defense, we verify that we have read and evaluated the thesis prepared by SIMON G/EGZIABHER HAILEMICHAEL, Entitled: URBAN ROAD USERS COST ALLOCATION: A CASE STUDY ON ADDIS ABABA and recommended for acceptance as a fulfillment of the requirement for the degree of Master of Science in Civil Engineering (Road and Transport Engineering) Principal Advisor Dr. Alemayehu Ambo ___________________ ___________________ Signature Date Members of Examining Board 1. Dr. Bikila Teklu ____________________ ________________ External Examiner Signature Date 2. Dr. Melaku Sisay ____________________ _________________ Internal Examiner Signature Date 3. Dr. Melaku Sisay ____________________ _________________ Post Graduate Coordinator Signature Date 4. Dr. Brook Abate ____________________ ________________ Dean, College of Architecture and Signature Date Civil Engineering ii Urban Road Users Cost Allocation: A Case Study On Addis Ababa ABSTRACT Developing countries have spent billions of dollars during the last decade for construction, design activities and due to the deterioration of their roads for maintenance. In Ethiopia Funds for construction of roads are acquired from government (revenues), road user charges (vehicles owners), local communities and development partners. However, these funds were not adequate enough relative to the country's need for road infrastructure development, preservation and sustainability efforts. Another outstanding issue is the question of who should pay for the road? In this regard, it has been agreed by many developed countries that users should pay for roads. To pay for these infrastructures and services, governments collect revenues through a variety of taxes and fees from road users. By contrast, Ethiopia appears to be relatively backward, both in studying these issues. The present system of road user cost allocation is levy on fuel. But that is general and it appears to have very little justification in economic theory, as it does not seek to charge road users for the cost they cause. Recently there has been growing interest also in allocation of external costs of highway use and operation, including environmental, congestion, crash, and various other social costs to the urban road users. The purpose of this research is to determine the fair share that each class of road users should pay for the highway agency and non-agency costs of the city of Addis Ababa. The costs include: Agency cost and non-agency costs. In determining the fair cost allocation, a sample of road section from Ministry of Mines – Torhyloch Asphalt Concrete Road which has 8.72 km in length have been considered. The allocation of highway costs, both agency and external costs is based on Engineering Approaches using traffic measurement, Equity Based approach and Highway Management and Development Approaches. Additionally, in order to conduct detailed and realistic analysis, the Road User Cost (RUC) was estimated using HDM-4 Version 1.1. In addition it has been computed by collecting user related survey data by taking more than 50 samples per vehicle type through questionnaires. iii Urban Road Users Cost Allocation: A Case Study On Addis Ababa Statistical comparison between rational highway costs allocations and existing road user charges for considering highway agency costs showed there is a huge deficit between the revenues raised for the government and the cost needs for the road networks development supposed to fund. Based on sample road result, the existing road charging revenue in Ethiopia was found to be far less than what could have been collected depending on the case study of the road section from Ministry of Mines to Torhayloch (Coca Cola) Asphalt Concrete Road which has 8.72km length. And small vehicles like cars, pickups, minibuses and buses are currently paying 92. 86% beyond their responsibility to pay. Whereas Trucks and Truck trailers are paying only 43.47 % of that could have been paid. The Research recommends the government needs to highlight to key decision makers, the serious shortfall in revenues, compared to estimated expenditures, through a policy and the erosive effects from inflation (ever since the fuel levy was introduced in 1997) and at least request that the levy should be increased to counter this, start congestion charge in Addis Ababa and also revising the annual vehicle registration renewal charge on all vehicles in Ethiopia based on charges proportionate to the actual damage it causes to the road network. Key Words Highway User Costs, Highway Agency Costs and External costs iv Urban Road Users Cost Allocation: A Case Study On Addis Ababa ACKNOWLEDGEMENT Firstly, I want express unlimited thanks for God and the mother of God, Saint Mary for reaching to this stage of my research effort. Secondly, I would like to extend my deepest and sincere gratitude to my thesis advisor, Dr. ALEMAYEHU AMBO for his valuable guidance, encouragement and excellent comments as well as providing me all the necessary facilities that I required of him. I do not enough words to express my gratitude except to say that without your support, this work would not have been possible to reach to this stage. I am happy also to express my honest gratitude to my Co-advisor Dr. MAHABUBUL Bari for giving his time, effort and extremely guidance to my study during the period of the research. I would like to acknowledge and thank him for his valuable comments and remarks I want also to express my gratitude to the Federal Democracy of Republic of Ethiopian (FDRE), Ethiopian Roads Authority and Addis Ababa science and Technology University for funding my graduate school studies. I want also place on record, my gratitude to those who directly or indirectly supported me, during the study. In this regard, I would like to take this opportunity to acknowledge the staff and management of the FDRE, Road Fund Administration; the FDRE, Ethiopian Roads Authority (ERA); the FDRE, Ministry of Transport, Roads Transport Authority, CORE consulting Engineers PLC and W.T Consulting PLC for extending to me their utmost cooperation and support during the study. Finally, it is my pleasure to extend my sincere thanks and appreciations to those individuals who provided their own contributions for successful completion of this research. v Urban Road Users Cost Allocation: A Case Study On Addis Ababa DECLARATION I, the undersigned, declare that this thesis is my original work performed under the supervision of my thesis advisor Dr. Alemayehu Ambo and my Co-advisor Dr. Mahabubul Bari and has not been presented as a thesis for a degree in any other university. All sources of materials used for this thesis have also been duly acknowledged. Name: Simon G/egziabher Signature: _____________ Place: Addis Ababa Science and Technology University College of Graduate Studies, College of Architecture and Civil engineering Road and Transport Engineering Addis Ababa, Ethiopia Date: November, 2017 Title of the Thesis ‗‘Urban Road Users Cost Allocation: A Case Study On Addis Ababa‘‘ vi Urban Road Users Cost Allocation: A Case Study On Addis Ababa ABBREVIATION . AASHTO American Association of State Highway and Transportation Officials . ADT Annual distance Travelled . AUC Annual user cost . EETS European Electronic Toll Service . EPE Ethiopian Petroleum Enterprise . ERA Ethiopian Roads Authority; . ERF Ethiopian Road Fund . ETB Ethiopian Birr . EU European union . ESAL Equivalent Standard Axle Loads; . FDRE Federal Democracy of Republic of Ethiopian; . FHWA Federal Highway Administration . FHCA Federal Highway Cast Allocation; . HDM-4 Highway Development and Management Model Four; . GVW Gross Vehicle Weight . HCA Highway cost Allocation . HCAs Highway Cost Allocation Study . HUR Highway User Revenue . LRUC Lorry Road user charge . M & E Monitoring and Evaluation . NTC National Transport Commission . PCU Passenger car Equivalent . RUC Road User Cost . RGW Registered Gross Weight . RSDP Road Sector Development Program . VOC - Vehicle Operating Cost; . VOT Value of time vii Urban Road Users Cost Allocation: A Case Study On Addis Ababa TABLE OF CONTENT ABSTRACT .................................................................................................................................. iii ACKNOWLEDGEMENT .............................................................................................................. v DECLARATION ........................................................................................................................... vi ABBREVIATION ........................................................................................................................ vii LIST OF FIGURES ........................................................................................................................ x LIST OF TABLES ......................................................................................................................... xi 1.0 INTRODUCTION