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43 CHAPTER SEVEN LIFE-CYCLE COST ANALYSIS The current survey of U.S. states and Canadian provinces shows 21 of 48 responding agencies completing life-cycle costing on some projects, which is a substantial increase of the Perrin and Jhaveri (2004) survey result showing only three of 25 responding agencies applying some sort of LCCA to high- way drainage pipes. The Perrin and Jhaveri study developed a methodology to compute the total cost of installing a culvert over a given design life, usually 100 years. The method takes the total cost as the sum of the installation or replacement cost and user-delay cost (resulting from the high frequency of post-failure emergency repairs observed to occur from their surveys). Several culvert failures were reviewed to illustrate various costs (normal and emergency replacement costs, user delay costs, etc.) and demonstrate how longer life would result in significant cost savings in the long run. New York State DOT is considering the use of a ranking metricââthe performance indicatorââfor culvert screen- ing and prioritizing needs. This indicator calculates items directly related to the condition of the culvert as well as ele- ments from the channel rating, thus including a risk element (risks associated with large culverts can be safety risks, for example, structural collapses or sinkholes, or operational risks, for example, roads overtopping during storm events, inundation of upstream facilities resulting from backwater effects). For evaluating the system management perfor- mance, tracking of the investment metric with the average condition rating is proposed, so that relative tends over time would indicate the effectiveness of capital investment. Life-cycle costing may remain limited until reliable data on maintenance costs incurred from traditional and life- cycle cost projects become available. The significant increase in the use of culvert rehabilitation and repair techniques as opposed to culvert replacements will provide an opportunity for these data to be compiled in the coming decade. Life-cycle cost analysis (LCCA) is an accepted procedure in infrastructure design to compare alternative strate- gies for providing a specific product over a relatively long period of time. The overall objective of LCCA is to identify the most effective long-term value alternative to the facil- ity owner. LCCA anticipates all the costs an installation is likely to incur over its lifetime and provides a means for the efficient use of construction and maintenance funds. The comparison of alternative strategies is based on the total cost over the designated analysis period, including ini- tial construction costs, maintenance costs, rehabilitation costs, and disposal costs at the end of the analysis period, if applicable. Indirect costs, such as detour costs to users, accidents, and damage to other areas during the period of repair or replacement, can also be accounted for. Because the analysis periods are usually relatively long and since expenditures can be incurred at any point within the anal- ysis period, all expenditures are adjusted to present-day costs using a discount rate. The analysis period is frequently estimated as the design service life of a culvert installation, but a different time period could be used. Alternative analysis periods include the expected survival time of the pipe alternative that would need the earliest rehabilitation or replacement, the alterna- tive that would have the longest service life, the period of time for which increased capacity is expected to be needed, or any other period consistent with the physical or economic constraints of the owner agency. It must also be noted that uncertainty in service life pre- dictions, future event forecasting, appropriate discount rates, and future inflation rates can lead to considerable uncer- tainty in the estimated present-day costs of alternatives.
