Manual on Economic Evaluation of Highway Projects in India (Second Revision)

IRC SP 30 - Scope: Key Formulas & Tables for Vehicle Operating Costs (VOC)

This code provides detailed empirical formulas for estimating VOC components for Light Commercial Vehicles (LCV) and Multi Axle Heavy Vehicles (MAV).

1. Fuel Consumption (FC)

• V = Speed (km/h)
• RG = Road Gradient (%)
• RF = Road Roughness Factor
• FL = Road Fall (m/km)
• RS = Road Surface Type Factor (for MAV)

2. Spare Parts Cost (Including Taxes)

[ SP_{NP}(IT) = e^{-10.9278 + 0.000141 \times RG + 3.493 \times W} ]

• W = Vehicle Weight (tons)

3. Maintenance Labour Cost

[ LC = 0.3692 \times SP_{NP}(IT) ]

4. Tyre Life (km)

5. Engine Oil Consumption (litres/1000 km)

6. Speed Equations (km/h) by Carriageway Type (

IRC SP 30: Types of Traffic Receiving Benefits (Clause 6.3)

Types of Traffic Receiving Benefits:

• Normal Traffic: Would use the existing facility regardless of improvements.
• Diverted Traffic: Traffic shifted onto or away from the studied route/mode (e.g., road diverting traffic from railways).
• Generated (Induced) Traffic: New traffic created due to improved/new facilities.

Benefit Calculation:

• Normal & Diverted Traffic:
  [ \text{Benefit} = \Delta \text{User Cost} \times \Delta \text{Traffic} ]
• Generated Traffic:
  [ \text{Benefit} = \frac{1}{2} \times \Delta \text{User Cost} \times \Delta \text{Traffic} ]

Key Tables & Specifications:

(Refer Table 34 for full details)

Road Profile Parameters (Table 5):

Congestion Effect (Clause 6.9):

• VOC increases with congestion due to speed reduction and vehicle maneuvers.
• Time-related and distance-related congestion cost factors are calculated using volume-to-capacity ratio (V/C).

Example: Time-Related Congestion Cost for Cars on Single-Lane Road:

[ CF = 0.747 + 1.458 \times (V/C) \

Traffic Volume and PCU Conversion - IRC SP 30

1. Traffic Volume in PCU/hour:

• Volume (V) in PCU/h can be estimated using:

  [ V_{\text{Two}} = 51.494 - 0.0069 \times Q ]

  Where:

  • ( Q ) = Peak traffic flow (PCU/h)
  • ( V_{\text{Two}} ) = Volume of two-wheelers in PCU/h

• For two-lane carriageways, max PCU is limited to 3000 PCU/h.

2. Recommended Design Service Volumes (PCU/day):

3. PCU Conversion Factors (Distance-Related Congestion Factors):

Vehicle Operating Cost (VOC) Components (IRC SP 30)

The VOC components include:

• Maintenance labour
• Depreciation
• Wages of crew
• Fixed costs (overheads, administration, interest on borrowed capital)

Key Points from IRC SP 30:

• VOC is calculated using equations in Annex C.
• Tables for VOC values by vehicle type and road roughness are in Annex D.
• VOC values reflect a vehicle mix of 75% petrol cars and 25% diesel cars.
• Costs are based on March 2009 price levels.
• Economic costs exclude taxes; financial costs include taxes.
• For intermediate roughness or rise/fall values, linear interpolation between table values is recommended.

Typical VOC Calculation Formula (simplified):

[ VOC = C_{maintenance} + C_{depreciation} + C_{wages} + C_{fixed} ]

Where each component is a function of vehicle type, road roughness, and operational parameters.

Interpolation Formula for VOC:

If VOC values at roughness (R_1) and (R_2) are (VOC_1) and (VOC_2), then for roughness (R):

[ VOC = VOC_1 + \frac{(VOC_2 - VOC_1)}{(R_2 - R_1)} \times (R - R_1) ]

For detailed equations and input prices, refer to Annex C and D of IRC SP 30.

flowchart LR
    A[Vehicle Type] --> B[VOC Equations (Annex C)]
    C[Road Roughness] --> B
    D[VOC Tables (Annex D)] --> E[VOC Value]
    B --> E
    E --> F[Interpolation if needed]

Key Formulas and Tables for Congestion Factors & Speed-Flow (IRC SP 30)

1. Distance-Related Congestion Factor (CFp)

• From Clause 1.0945: [ CF_p = 1.0945 \times 0.8 = 0.88 ]
• Note: If ( CF_p < 1 ), take ( CF_p = 1 ) (as per practice).

2. Time-Related Congestion Factor (CF) — From Speed-Flow Equations (Annex B)

• Where:
  • ( CF ) = Time-related congestion factor
  • ( CF_p ) = Distance-related congestion factor
  • ( V/C ) = Volume-to-Capacity ratio

3. Capacity Values (Table 11) for Plain Terrain (PCU/hour)

4. Volume-to-Capacity Ratio (V/C)

• ( V/C = \frac{\text{Peak Hour Volume (PCU/h)}}{\text{Capacity (PCU/h)}}

Shadow Pricing & Economic Cost Adjustments (IRC SP 30 - Clause 5.6)

• Shadow Pricing adjusts distorted prices (due to govt. controls, subsidies, taxes) to reflect true economic costs.
• Labour Wages:
  • Unskilled labour: Shadow wage = 0.5 × actual wage (due to surplus labour).
  • Semi-skilled & skilled labour: Usually no shadowing unless statutory wages are low.
• Foreign Exchange: Shadow price = 1.25 × official exchange rate (to account for scarcity).
• Commodities: Use border price (c.i.f price) instead of domestic price if imported.
• Taxes & Subsidies: Exclude taxes (import duty, excise, sales tax) and disregard subsidies as they are transfer payments.
• Economic Cost Approximation: Financial costs × (0.80 to 0.90) = Economic costs.

Key Formula for Shadow Wage Rate (Unskilled Labour)

[ \text{Shadow Wage} = 0.5 \times \text{Actual Wage} ]

Shadow Foreign Exchange Rate

[ \text{Shadow FX Rate} = 1.25 \times \text{Official FX Rate} ]

Economic Cost Conversion

Summary Diagram: Shadow Pricing Adjustments

flowchart TD
    A[Actual Market Prices] --> B{Distortions?}
    B -- Yes --> C[Apply Shadow Pricing]
    C --> D[Adjust Labour Wages]
    C --> E[Adjust Foreign Exchange]
    C --> F[Use Border Price for Commodities]
    C --> G[Exclude Taxes/Subsidies]
    D --> H[Unskilled Labour: 0.5 × Actual Wage]
    E --> I[Shadow FX = 1.25 × Official Rate]
    F --> J[Use c.i.f. Price]
    G --> K[Exclude Import Duty, Excise, Sales Tax]
    K --> L[Calculate Economic Cost]
    B -- No --> L

References:

• IRC SP 30 Clause 5.6
• Planning Commission Project Appraisal Division practices
• Use World Bank HDM IV software for

Economic Evaluation Procedures - IRC SP 30 Key Points

1. Economic Analysis Approach (Clause 8.12):

• Compare each alternative with the "do-nothing" option and incrementally with other alternatives.
• Select the best alternative based on pre-established decision criteria.
• Use software like World Bank's HDM IV (v2.0) for detailed analysis.

2. Important Compound Interest Factors (Annex A):

• Present Worth (PW), Sinking Fund Factor (SFF), Capital Recovery Factor (CRF), etc., are used for discounting future costs and benefits.

(Where (i) = interest rate, (n) = number of years)

3. Glossary of Terms:

• NP(ET/IT): New price excluding/including taxes
• PCU: Passenger Car Units
• RUCS: Road User Cost Study
• V-C: Volume-Capacity Ratio
• V: Speed (km/h)

4. Key References for In-depth Understanding:

• Kadiyali, L.R. (1983, 1984) for traffic and highway engineering principles.
• Reddy et al. (2003) for updated road user cost and software.
• World Bank HDM IV for practical economic evaluation.

Summary Diagram of Economic Evaluation Process

flowchart TD
    A[Identify Alternatives] --> B[Estimate Costs & Benefits]
    B --> C[Discount Costs & Benefits using CIF]
    C --> D[Compare with Do-Nothing Alternative]
    D --> E[Incremental Analysis Between Alternatives]
    E --> F[Apply Decision Criteria]
    F --> G[Select Best Alternative]

For detailed tables and formulas, refer to Annex A of IRC SP 30 for compound interest factors and Clause 8.12 for economic analysis methodology.

Internal Rate of Return (IRR) - Key Points from IRC SP 30

• Definition (Clause 7.4):
  IRR is the discount rate ( i ) that satisfies:
  [ \sum_{t=1}^{n} \frac{B_t - C_t}{(1+i)^t} = 0 ] where:

  • ( B_t ) = Benefits in year ( t )
  • ( C_t ) = Costs in year ( t )
  • ( n ) = Total number of years

• Interpretation:
  IRR is the rate where the net present value (NPV) of cash flows equals zero.

• Computation:

  • Typically solved by trial and error or iterative methods.
  • Modern statistical software has built-in IRR functions (e.g., Excel's =IRR()).

• Decision Criterion:
  If IRR > market interest rate, the project is financially acceptable.

Compound Interest Factors (Annex A)

Useful for discounting cash flows:

Summary Formula for IRR Calculation

[ NPV = \sum_{t=1}^n \frac{B_t - C_t}{(1 + IRR)^t} = 0 ]

flowchart TD
    Start[Start with initial guess of IRR]
    CalcNPV[Calculate NPV using IRR]
    CheckNPV{Is NPV close to zero?}
    AdjustIRR[Adjust IRR value]
    End[IRR found]

    Start --> CalcNPV --> CheckNPV
    CheckNPV -- No --> AdjustIRR --> CalcNPV
    CheckNPV -- Yes --> End

Note: Use compound interest tables or software tools to simplify IRR calculation.

Key Points on Selection of Policy Variables & Decision Criteria (IRC SP 30, Clause 8.5):

• Design Life:

  • Typically 15-20 years for highway economic analysis in India.
  • Beyond 20 years, discounting reduces impact; forecasts become unreliable.
  • If less than 15 years, assign salvage value (10-20% of initial cost) at end of design life.

• Discount Rate:

  • Minimum acceptable Internal Rate of Return (IRR) is generally 12% per annum for Indian conditions.
  • Shadow pricing of wages, materials, and equipment should be decided upfront.

Economic Decision Criteria

• Compare alternatives with the "do-nothing" option and incremental investments.
• Select the best alternative based on established decision criteria (e.g., Net Present Value, Benefit-Cost Ratio).

Compound Interest Factors (for discounting)

Where:

• ( i ) = discount rate
• ( n ) = number of years

Example: For 12% discount rate and n=15 years, use tables or formulas to find PW, CRF, etc.

Summary Diagram of Decision Process

flowchart TD
    A[Select Design Life (15-20 yrs)] --> B[Determine Discount Rate (12% typical)]
    B --> C[Assign Salvage Value if <15 yrs]
    C --> D[Calculate Present Worth of Alternatives]
    D --> E[Compare with Do-Nothing Alternative]
    E --> F[Evaluate Incremental Investments]
    F --> G

IRC SP 30: Vehicle Operating Cost (VOC) Summary

VOC Components (Clause 6.6 & Annex C)

• Maintenance labour
• Depreciation
• Wages of crew
• Fixed costs (overheads, administration, interest on capital)

VOC Calculation (Annex C)

• VOC is computed using equations for each component per vehicle type.
• Vehicle types include petrol and diesel cars (75% petrol, 25% diesel ratio).
• Costs are based on March 2009 price levels.
• Economic costs exclude taxes; financial costs include taxes.

VOC Tables (Annex D)

• Provide VOC values for various vehicle types.
• Inputs include road roughness and rise/fall parameters.
• For values not tabulated, linear interpolation is recommended.

Example: Linear Interpolation Formula for VOC

[ VOC_x = VOC_1 + \frac{(x - x_1)}{(x_2 - x_1)} \times (VOC_2 - VOC_1) ]

• (x) = intermediate parameter (e.g., roughness)
• (VOC_x) = interpolated VOC value
• (VOC_1, VOC_2) = VOC values at known points (x_1, x_2)

Usage Tips

• Use Annex D tables as baseline.
• Adjust VOC for local price levels if needed.
• Include all four components for total VOC estimation.

flowchart LR
    A[Road Roughness & Rise/Fall] --> B[Select Vehicle Type]
    B --> C[Use Annex D VOC Tables]
    C --> D{Value Available?}
    D -- Yes --> E[Read VOC]
    D -- No --> F[Interpolate VOC]
    E & F --> G[Calculate Total VOC]

This concise approach helps quantify benefits from road improvements on vehicle operating costs.

Notes on Use of VOC Tables (IRC SP 30)

The Vehicle Operating Cost (VOC) tables provide empirical formulas to estimate costs related to fuel, maintenance, and depreciation for different vehicle types, mainly Light Commercial Vehicles (LCV) and Two Wheelers.

Key VOC Equations for Light Commercial Vehicles (LCV)

Key VOC Equations for Two Wheelers

IRC SP 30 Annex C & D: Vehicle Operating Cost (VOC) Key Formulas & Tables

1. VOC Equations for Light Commercial Vehicles (LCV)

2. VOC Equations for Two Wheelers (TW)

IRC SP 30 - References and Bibliography: Key Formulas & Tables

Vehicle Operating Cost (VOC) Equations (Annex C, Clause 6.6)

Speed Equations by Carriageway Type (Cars)

IRC SP 30: Members of the Committee — Key Information

The code section on Members of the Committee mainly lists personnel involved in the Highways Specifications and Standards Committee as of 2008, without specific formulas or tables related to structural design.

Glossary of Terms (Relevant for Highway & Road User Cost Studies)

• B/C: Benefit-Cost Ratio
• CRF: Capital Recovery Factor
• DCF: Discounted Cash Flow
• NPV: Net Present Value
• PCU: Passenger Car Units
• V-C: Volume-Capacity Ratio
• SF1, SF2 ... SF108: Speed-Flow Equations for different terrains and road widths

Key Formula (Capital Recovery Factor - CRF)

[ \text{CRF} = \frac{i(1+i)^n}{(1+i)^n - 1} ]

• i: interest rate per period
• n: number of periods

Notes:

• No structural formulas or member design specs are provided under this heading.
• The glossary aids in economic and traffic analysis related to highways.

If you need structural member design formulas or specifications, please specify the relevant IRC code section (e.g., IRC:112 for steel bridges).

IRC SP 30: Glossary, Key Formulas & Tables Summary

Key Terms (Abbreviations)

• B/C: Benefit-Cost ratio
• CFD, CFT: Congestion Factors (Distance & Time related)
• CRF: Capital Recovery Factor
• IRI: International Roughness Index
• PCU: Passenger Car Units
• RF, RG, RS, FL: Road profile parameters (Rise/Fall, Roughness)
• SP (IT/ET): Spare Parts Cost (Including/Excluding Taxes)
• UPD: Utilization Per Day (km/day)
• V SL, V 2L, V 4L: Free Speeds on Single, Two, Four Lane roads (km/h)

Important Formulas (Vehicle Operating Cost - VOC)

Speed Equations (LCV in km/h)