Life-Cycle Cost Approach to Infrastructure Cost Calculation and Allocation

Abstract

A forward-looking approach to infrastructure cost calculation is presented. The approach assumes a semiprivate infrastructure operator to determine user charges. The calculated tariffs provide an incentive for the operator to maintain and develop further the road network in a sustainable manner. The approach subdivides the road infrastructure network into its individual structures and calculates the asset value of each structure separately. Unit prices for structures are calculated on the basis of information pertaining to the construction cost of recently completed infrastructure investment projects. It is assumed that maintenance and investment decisions are undertaken before the prediction of traffic flows in such a way that influenceable life-cycle cost is minimized. The cost for each user generation is allocated to different user categories on the basis of the principles of cooperative game theory, reconciling fairness and efficiency criteria. The principles of life-cycle cost analysis guarantee that the developed approach is compatible with cost–benefit analysis, engineering design guidelines, and the International Accounting Standards. Compared with traditional infrastructure cost calculation methods, the developed approach allocates a lower percentage of costs to heavy goods vehicles and higher fees to the first user generations.