Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations (2020) / Chapter Skim
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63 CHAPTER 4: METHODS AND DATA TO DEVELOP, EVALUATE, AND PRESENT THE BUSINESS CASE A business case is an evidence-based justification for a proposed project or policy investment. It is presented in a structured manner that enables decision-makers to quickly assess the expected benefits from the investment against the organization's objectives and make informed investment decisions.
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64 CREATING AN EFFECTIVE BUSINESS CASE FOR CONNECTED VEHICLE INVESTMENTS Figure 6 presents an overview of the steps involved in constructing a business case. The business case rests on the arguments advanced around four sub-cases: the Strategic Case, the Economic Case, the Financial Case, and the Deployment Case.
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65 Table 18. Steps for Defining the Problem Statement Step Description of Activity Define Case for Change Identify key external and internal drivers that support the case for change.
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66 infrastructure investments to enable V2I applications. Some changes to rules, regulations, and policies are also warranted.
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67 Step 2. Strategic Evaluation by Progress toward Value Proposition.
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68 Step 4. O&M Costs – This step involves an estimation of recurring costs for system operating and maintenance costs.
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69 V2I Applications in the BCA Tool The BCA tool features five of the 23 V2I applications that state DOTs have deployed, are actively deploying, or are seriously contemplating for deployment in the near term using their existing or planned CV infrastructure investments. Figure 5 previously arranges these applications derived from the pilots and test bed activities which are also summarized in Table 6.
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70 Rural Freeway X X X Arterial X X X Roadway (Any Location) X X The five applications can also be located along a sequencing strategy of CV infrastructure investment as an agency ramps up its commitment to CVs and the market penetration rate increases.
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71 estimated to cause on the benefit-cost outcomes, would inform decision-makers on whether to undertake a project, delay, or discontinue. Other risks, particularly those that cannot be codified as model variables and parameters directly (e.g., lack of competition or cyber hacking)
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72 Table 22. Typical Sources of Funding State DOT Revenue Sources Federal Funding Sources*
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73 Furthermore, many DOTs have indicated challenges in availing grant programs. Per the CAT Coalition survey, 73 percent of respondents indicated some or significant barriers with grant programs.
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74 Step 4: Revenue Opportunities – To present how long-term expenditure needs, such as O&M costs, would be meet, the DOT can explore opportunities for additional revenues by leveraging the efficiency gains from V2I investments, such as transit ridership, electronic tolls, and road user charges.
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75 The NCHRP Project 03-77 laid out a framework for selecting contracting strategies for ITS projects. This study proposed the following four basic dimensions to help structure the procurement framework.
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76 Table 23. Basic Procurement Packages Proposed by NCHRP Project 03-77 for ITS Delivery Package No.
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77 On the US 90 deployment project, FDOT used a design-bid-build, using a standard request for proposal process. IFDOT served as the systems manager, the City of Tallahassee installed the RSUs, FDOT and a vendor jointly performed necessary testing, and the FDOT-hired consultant performed the overall system integration functions.
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78 220 installations and 2,000 vehicles using DSRC, and create a CV data environment to broadcast information between UDOT traffic operation centers and vehicle information systems. Panasonic will develop and deploy a cloud-based data analytics, processing, and storage system, and V2I software applications for the CV data environment.
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79 • When needed, DOTs should consider using multiple contracts to perform installation, upgrades, and equipment replacements. • Schedules should consider that some activities, particularly, system testing and security testing, take additional time.
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80 Key Activities Involved in CV Deployment Process: Procurement planning begins with identifying key activities to be accomplished through various phases of delivery from planning through O&M. The project development process of ITS projects has traditionally included four key phases: Planning, Design, Implementation, and Operations and Maintenance.
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81 • O&M Funding of CV Infrastructure: Most DOTs depend on state, regional, and local revenues to meet the O&M needs of CV infrastructure. Federal funding (e.g., the Congestion Mitigation and Air Quality Improvement Program)
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82 delivery with key milestones and activities that are mandatory, difficult, or time consuming such as FCC approval, procurement of CV equipment, and system and security testing. The selection of a procurement strategy is generally influenced by commonly accepted factors such as the type of services to be procured, project size, statutory limitations, agency experience, staffing capabilities and availability, life cycle considerations (e.g., O&M)
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83 Colorado Department of Transportation Internet of Roads Problem Statement Colorado's highways suffer from growing safety and mobility challenges brought about by increases in-vehicle miles traveled that have increased 23 percent since 2000 and traffic fatalities that have increased 45 percent since 2011. Existing transportation infrastructure budgets are insufficient to address these problems through traditional capacity and TSMO solutions alone.
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84 The forecasted reduction in accidents, injuries, and fatalities was stated above. Additionally, the investment is expected to deliver $54 million in discounted travel time savings and commercial truck operating savings.
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85 Port Authority of New York and New Jersey Lincoln Tunnel Exclusive Bus Lane Connected Automated Bus Project Problem Statement The capacity-constrained Lincoln Tunnel Corridor crossing the Hudson River and connecting major highway corridors in Northern New Jersey with the Port Authority Bus Terminal in Midtown Manhattan is a vital link for thousands of daily commuters using numerous commuter and interstate bus lines. The tunnel's designated bus-only exclusive bus lane (XBL)
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86 Economic Case One of the stated objectives of the project is to reduce average peak hour delay by 10 minutes by reducing incidents and breakdowns and increasing throughput. A study proposing the CVenabled bus platooning concept did not quantify these benefits, but the well-documented criticality of the corridor to the region and nation's economic vitality suggest significant benefits from even small improvements in corridor throughput, and conversely, significant disbenefits from not addressing constraints and latent or growing demand.
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87 real-time information to motorists during freeway incidents to improve response and alternate routing, avoid shutting down freeway lanes, and reduce secondary crashes. FDOT will operate I-75 and US 441/301 with an integrated corridor management approach.
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88 to impaired pedestrians unexpectedly entering the roadway in the dark. FDOT has conducted some initial research into determining appropriate proxy Crash Modification Factors to estimate these potential benefits and associated benefit-cost ratio.
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89 CHAPTER SUMMARY This chapter demonstrated how a business case can be developed for a selected CV investment so that an organization can make an informed decision. The business case begins with a problem statement that highlights the case for change.
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90 examples from real-world CV projects illustrate, this ITS procurement model might be adequate for small-scale CV deployments, but fraught with some challenges. The existing CV deployments provide valuable lessons for consideration to help structure the deployment better.
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