Feasibility Study for Canadian Project in Public Sector
Champlain Bridge Replacement
BLDG 6561 - Building Economics (Winter 2016)
Instructor Dr. Nasma Budawara
Group 8:
Abdalla Osman
Congliu Li
Husam Hasuna
Yuexuan Pan
27735669
27802196
40002969
27766343
Introduction
Major Government Projects in Canada
• Transportation Infrastructure is the
largest portion of the public project in
Canada.
Distribution of Infrastructure Investment
• Government are highly focus on
transportation sector, highway system,
33%
local road system and railway system
due to increasing population
6%
25%
• Bridge project is crucial to the lives of
locals and development of the city with
relatively higher investment.
Water Infrastructure
36%
18%
18%
Waste Management
Other Infrastructure
Transportation Infrastructure
Transit Infrastructure
Literature Review
Different Economic Analysis Techniques:
• Benefit-Cost Analysis
It measures both the total change of the benefits and the total change of the costs. This technique
requires to monetize all relevant factors in a project, then obtaining the ratio which is equal to the benefits over
the costs (“ B/C” )
•
Cost Effectiveness Analysis
It evaluates the cost of a project and holds constant of the quality of the benefits. All the relevant cost
during the project are changed to monetary form for comparing.
• Lifecycle Cost Analysis
Based on this analysis technique, benefits and costs in different project periods can be evaluated and
compared, then using a discount rate to transfer all the values to the present value or a base year, which is the
Net Present Value. It allows us to make comparisons of the economic states in different times
• Multiple Accounts Analysis
It uses different ratings and various ranking systems to analyze a project. Each option is analyzed by each
objective, then it is multiplied by a factor of weight and the sum point of this option is obtained. This technique
is a relatively easy to understand, but it is less precise than other techniques
Literature Review
Inflation Rate
• According to Bank of Canada’s data (http://www.bankofcanada.ca/rates/price-indexes/cpi/)
• The target inflation rate of the Bank of Canada of 2% has been used.
• This rate is the one that allows inflation in Canada to be controlled.
• Recommend Inflation for next 30 years till 2050 (Project Horizon)= 2.0%
Discount Rate
•
Real rate = 6% , Inflation =2% , Where
•
Annual Interest rate = 8.0 %
(1+i) = (1+r)(1+f)
Literature Review
Environmental and Social Analysis:
• Natural Environment:
Substantial Watercourses, Wetlands, Natural Protected Areas, Sensitive Fish Habitats, Prime Agricultural Lands
(Categories 1 and 2 soils as defined by Natural Resources Canada), & Resource Extraction Areas
• Social Environment:
Residential Areas, Recreation and Tourist Areas, Historical or Cultural Site and Cemeteries, Federal Reserves,
including First Nation reserves, Land Claim Settlement Lands, and military bases, & Waste Management Sites
Supplementary Analysis:
• Breakeven Analysis
• Sensitivity Analysis
• Risk Analysis
Case Study
• The Champlain Bridge is a federal asset built in 1962 that is reaching the end of its useful life.
• It is one of the busiest bridges in Canada and plays a vital role in moving goods to and from the
United States.
– Between 40 and 50 million vehicles per year
– 11 million transit users per year using a dedicated bus lane
– Over $20 billion in cross-border goods cross the bridge each year
• Government of Canada announced that the Champlain Bridge would
be replaced by a new crossing bridge.
Case Study
Project Description:
• Total length = ±3 500 m. Seaway span = ± 200 m. Regular spans = ± 80 m.
• Total width = two 23.82 m decks
Project objectives :
•
•
•
•
Provide fast and reliable travel for
the long distance and transiting traffic
Improve traffic safety
Reduce impact of traffic on settlements
Deliver a long-term solution that efficiently meets
pre-defined operational and maintenance service requirements
Case Study
Five Alternatives of Champlain Bridge Replacement Project:
Alternative 1: Pre-stressed Concrete Box Girder
Alternative 2: Hybrid Steel-Concrete
Alternative 3: Composite Superstructure
Alternative 4: Composite with V-Shaped Piers
Alternative 5: Cable-Stayed with Composed Deck
Case Study
Benefit Analysis:
• State for Good Repair
• Safety Benefits
• Travel Time Saving
• Environmental sustainability
• Vehicle Operating Cost Saving
• Quality of Life
Case Study
Cash Flow Analysis:
• Based on the estimates of construction, maintenance and operation costs, financial
flows were produced for each of the five bridge alternatives
• The analysis is performed using a 30-year reference period which is common for bridge
projects
Case Study
Financial Analysis
Alternative 1: Pre-stressed Concrete Box Girder
First Alternative: PRESTRESSED CONCRETE BOX GIRDER
Cash Flow Calculation (M$)
Preparatory work Construction Contingency (25%) O&M Resurfacing Net Cash Flow
372
0
0
-372
0
202.98
51
-252.92
0
202.88
49.94
-252.82
0
144.32
36.08
-180.4
0
146.13
36.26
-182.39
0
0
0
21.75
-21.75
0
0
0
21.75
-21.75
0
0
0
21.75
-21.75
0
0
0
21.75
-21.75
0
0
0
21.75
-21.75
0
0
0
21.75
-21.75
0
0
0
21.75
-21.75
0
0
0
21.75
-21.75
0
0
0
21.75
-21.75
0
0
0
33.5
262.02
-295.52
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
262.02
-295.52
0
0
0
66
-66
0
0
0
66
-66
0
0
0
66
-66
0
0
0
66
-66
0
0
0
66
-66
0
0
0
66
-66
Salvage Value
133
EOY
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
30
NPV (8%)
EUAC (8%)
Resurfacing cost = $262.02 millions @ 14/yrs
Resurfacing cost = $262.02 millions @ 24/yrs
PV
-$372.00
-$234.19
-$216.75
-$143.21
-$134.06
-$14.80
-$13.71
-$12.69
-$11.75
-$10.88
-$10.07
-$9.33
-$8.64
-$8.00
-$100.61
-$10.56
-$9.78
-$9.05
-$8.38
-$7.76
-$7.19
-$6.65
-$6.16
-$5.71
-$46.60
-$9.64
-$8.92
-$8.26
-$7.65
-$7.08
-$6.56
$13.22
-$1,453.44
-$129.11
Case Study
Financial Analysis
Alternative 2: Hybrid Steel-Concrete
Second Alternative: HYBRID STEEL-CONCRETE
Cash Flow Calculation (M$)
Preparatory work Construction Contingency (25%) O&M Resurfacing Net Cash Flow
372
0
0
-372
0
219.3
56.1
-274.44
0
222.65
55.14
-277.79
0
151.75
38.2
-189.95
0
154.79
38.97
-193.76
0
0
0
17.5
-17.5
0
0
0
17.5
-17.5
0
0
0
17.5
-17.5
0
0
0
17.5
-17.5
0
0
0
17.5
-17.5
0
0
0
17.5
-17.5
0
0
0
17.5
-17.5
0
0
0
17.5
-17.5
0
0
0
17.5
-17.5
0
0
0
33.5
178.65
-212.15
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
-33.5
0
0
0
33.5
178.65
-212.15
0
0
0
61
-61
0
0
0
61
-61
0
0
0
61
-61
0
0
0
61
-61
0
0
0
61
-61
0
0
0
61
-61
Salvage Value
143
EOY
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
30
NPV (8%)
EUAC (8%)
Resurfacing cost = $178.65 millions @ 14/yrs
Resurfacing cost = $178.65 millions @ 24/yrs
PV
-$372.00
-$254.11
-$238.16
-$150.79
-$142.42
-$11.91
-$11.03
-$10.21
-$9.45
-$8.75
-$8.11
-$7.51
-$6.95
-$6.43
-$72.23
-$10.56
-$9.78
-$9.05
-$8.38
-$7.76
-$7.19
-$6.65
-$6.16
-$5.71
-$33.46
-$8.91
-$8.25
-$7.64
-$7.07
-$6.55
-$6.06
$14.21
-$1,445.03
-$128.36
Case Study
Financial Analysis
Alternative 3: Composite Superstructure (Twin or Single Girder Box)
Third Alternative: COMPOSITE SUPERSTRUCTURE (TWIN OR SINGLE GRIDE BOX)
Cash Flow Calculation (M$)
Preparatory work Construction Contingency (25%) O&M Resurfacing Net Cash Flow
372
0
0
-372
0
221.85
55.39
-278.34
0
226.29
56.49
-282.78
0
153.88
38.47
-192.35
0
156.95
39.29
-196.24
0
0
0
16.9
-16.9
0
0
0
16.9
-16.9
0
0
0
16.9
-16.9
0
0
0
16.9
-16.9
0
0
0
16.9
-16.9
0
0
0
16.9
-16.9
0
0
0
16.9
-16.9
0
0
0
16.9
-16.9
0
0
0
16.9
-16.9
0
0
0
31.8
160.98
-192.78
0
0
0
31.8
-31.8
0
0
0
31.8
-31.8
0
0
0
31.8
-31.8
0
0
0
31.8
-31.8
0
0
0
31.8
-31.8
0
0
0
31.8
-31.8
0
0
0
31.8
-31.8
0
0
0
31.8
-31.8
0
0
0
31.8
-31.8
0
0
0
31.8
160.98
-192.78
0
0
0
59.8
-59.8
0
0
0
59.8
-59.8
0
0
0
59.8
-59.8
0
0
0
59.8
-59.8
0
0
0
59.8
-59.8
0
0
0
59.8
-59.8
Salvage Value
145
EOY
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
30
NPV (8%)
EUAC (8%)
Resurfacing cost = $160.98 millions @ 14/yrs
Resurfacing cost = $160.98 millions @ 24/yrs
PV
-$372.00
-$257.72
-$242.44
-$152.69
-$144.24
-$11.50
-$10.65
-$9.86
-$9.13
-$8.45
-$7.83
-$7.25
-$6.71
-$6.21
-$65.63
-$10.02
-$9.28
-$8.59
-$7.96
-$7.37
-$6.82
-$6.32
-$5.85
-$5.42
-$30.40
-$8.73
-$8.09
-$7.49
-$6.93
-$6.42
-$5.94
$14.41
-$1,439.55
-$127.87
Case Study
Financial Analysis
Alternative 4: Composite with V-Shaped Piers
Fourth Alternative: COMPOSITE SUPERSTRUCTURE ( V-SHAPED PEIR)
Cash Flow Calculation (M$)
Preparatory work Construction Contingency (25%) O&M Resurfacing Net Cash Flow
372
0
0
-372
0
222.38
56.1
-279.6
0
227.85
57.22
-285.07
0
154.94
38.73
-193.67
0
158.04
39.62
-197.66
0
0
0
14.6
-14.6
0
0
0
14.6
-14.6
0
0
0
14.6
-14.6
0
0
0
14.6
-14.6
0
0
0
14.6
-14.6
0
0
0
14.6
-14.6
0
0
0
14.6
-14.6
0
0
0
14.6
-14.6
0
0
0
14.6
-14.6
0
0
0
32
178.65
-210.65
0
0
0
32
-32
0
0
0
32
-32
0
0
0
32
-32
0
0
0
32
-32
0
0
0
32
-32
0
0
0
32
-32
0
0
0
32
-32
0
0
0
32
-32
0
0
0
32
-32
0
0
0
32
178.65
-210.65
0
0
0
57.5
-57.5
0
0
0
57.5
-57.5
0
0
0
57.5
-57.5
0
0
0
57.5
-57.5
0
0
0
57.5
-57.5
0
0
0
57.5
-57.5
Salvage Value
146
EOY
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
30
NPV (8%)
EUAC (8%)
Resurfacing cost = $178.65 millions @ 14/yrs
Resurfacing cost = $178.65 millions @ 24/yrs
PV
-$372.00
-$258.89
-$244.40
-$153.74
-$145.29
-$9.94
-$9.20
-$8.52
-$7.89
-$7.30
-$6.76
-$6.26
-$5.80
-$5.37
-$71.72
-$10.09
-$9.34
-$8.65
-$8.01
-$7.41
-$6.87
-$6.36
-$5.89
-$5.45
-$33.22
-$8.40
-$7.77
-$7.20
-$6.67
-$6.17
-$5.71
$14.51
-$1,441.76
-$128.07
Case Study
Financial Analysis
Alternative 5: Cable-Stayed with Composed Deck
Alternative Five: CABLE-STAYED WITH COMPOSITE DECK
Cash Flow Calculation (M$)
Preparatory work Construction Contingency (25%) O&M Resurfacing Net Cash Flow
372
0
0
-372
0
222.38
56.1
-279.6
0
227.85
57.22
-285.07
0
154.94
38.73
-193.67
0
154.79
38.75
-193.54
0
0
0
12.57
-12.57
0
0
0
12.57
-12.57
0
0
0
12.57
-12.57
0
0
0
12.57
-12.57
0
0
0
12.57
-12.57
0
0
0
12.57
-12.57
0
0
0
12.57
-12.57
0
0
0
12.57
-12.57
0
0
0
12.57
-12.57
0
0
0
28.14
-28.14
0
0
0
28.14
-28.14
0
0
0
28.14
-28.14
0
0
0
28.14
-28.14
0
0
0
28.14
-28.14
0
0
0
28.14
333.5
-361.6
0
0
0
28.14
-28.14
0
0
0
28.14
-28.14
0
0
0
28.14
-28.14
0
0
0
28.14
-28.14
0
0
0
28.14
-28.14
0
0
0
56.28
-56.28
0
0
0
56.28
-56.28
0
0
0
56.28
-56.28
0
0
0
56.28
-56.28
0
0
0
56.28
-56.28
0
0
0
56.28
-56.28
Salvage Value
146
EOY
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
30
NPV (8%)
EUAC (8%)
Resurfacing cost = $333.5 millions @ 19/yrs
PV
-$372.00
-$258.89
-$244.40
-$153.74
-$142.26
-$8.55
-$7.92
-$7.33
-$6.79
-$6.29
-$5.82
-$5.39
-$4.99
-$4.62
-$9.58
-$8.87
-$8.21
-$7.61
-$7.04
-$83.80
-$6.04
-$5.59
-$5.18
-$4.79
-$4.44
-$8.22
-$7.61
-$7.05
-$6.52
-$6.04
-$5.59
$14.51
-$1,406.67
-$124.95
Case Study
Financial Analysis Conclusion
• The Best NPV of Alternatives is alternative 5 (The
Cable Stayed Bridge) which is -$1,406.67 Millions
• By Using Equivalent Uniform Annual Cost (EUAC)
Analysis, the least annual cost is for the
alternative 5 (The Cable Stayed Bridge)
• EUAC = -$124.95 Millions
Case Study
Sensitivity Analysis
For each of the five bridge alternatives, financial assumptions were proposed.
So, a sensitivity analysis was also conducted to measure the impact of the results obtained
after modifying certain of these assumptions.
-110
-110
-115
-115
-120
-120
-125
-130
i
-20%
-10%
0
10%
20%
Resurfacing
O&M
-135
EUAC ($M)
EUAC ($M)
Initial cost
Initial cost
-125
-20%
-10%
0
10%
20%
-130
Resurfacing
O&M
-135
Sal
Sal
-140
-140
-145
-145
-150
Error
Sensitivity analysis for alternative 1
i
-150
Error
Sensitivity analysis for alternative 5
Case Study
Risk Analysis
• According to risk analysis by @risk software
• The possibility of EUAC of alternative (3) between -$139.86 to -$125.66 million is 90%. However, the same
possibility of EUAC of alternative (5) related to the range of EUAC between -$120.70 and -$109.03 million.
• The cable-stayed bridge has lower risk than composite superstructure bridge
EUAC distribution of composite superstructure bridge
EUAC distribution of cable-stayed bridge
Conclusion
• This feasibility study includes financial which shows that the recommended
project is cable stayed bridge which has the least equivalent uniform annual cost.
• Sensitivity analysis was conducted, that it shows the initial construction cost and
interest rate have a higher impact on the project.
• Maintenance, operation, salvage value and resurfacing cost have less impact on
the project.
• Also, Risk analysis was taken into consideration, where The cable-stayed bridge
has lower risk than composite superstructure bridge and other alternatives.
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