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Valuation of Temporary Transportation Facility Use Losses

Started: November, 2001 End Date: August, 2002 Project ID #426319 Status: Ongoing

Objective

The overall goal of this investigation is to document the state-of-the-practice related to the identification, valuation and recovery of costs associated with temporary facility use losses.

Abstract

As Departments of Transportation shift from a construction-dominated regime to one of facility management and operations, performance indicators must also shift from traditional metrics focused on agency performance (i.e., the number of projects delivered or budgets expended) to traffic flow-based metrics that better describe facility performance. When facility performance is compromised, facility owners must monetarily quantify these effects to: (1) recover any associated due costs and (2) justify future system improvement expenditures.Short-term, temporary events and activities such as construction or maintenance, infrastructure damage repair, overheight/overwidth vehicle movements, vehicular crashes, hazardous spills, etc. impair facility performance by fully or partially reducing the roadway capacity. Expressed in terms of delay, the impact of these temporary facility use losses has been extensively investigated and well documented. Lacking is a comprehensive examination of how these impacts are valued in monetary terms and how, if at all, these associated costs are recovered by facility owners.This investigation will identify any and all costs associated with temporary facility use losses. These costs may include direct and tangible costs such as materials, labor and equipment used for infrastructure damage repair or may include more intangible delay-related costs incurred by the motoring public. The residual effect of diverting funds from programmed activities to more immediate, unplanned facility needs will be considered as well.Once identified, this investigation will determine what, if any, costs are recoverable by facility owners. A distinction will be made between costs that are considered recoverable and costs that are actually recovered in practice. Specifically, this investigation will determine: (1) the types of costs that are conceivably recoverable and actually recovered in practice, (2) how these costs are valued for recovery and (3) the actual mechanism used to recover the various costs. A thorough investigation into this topic area promotes uniformity in facility use loss valuation and provides facility owners with a mechanisms) for equitable cost recovery.

Contacts

Files & Documents

Sponsors & Partners

  • Montana Department of Transportation (MDT) Sponsor

Part of: Transportation Planning and Economics

Project Tagged In: facility management

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