Engineering Project Appraisal

In most cases of civil engineering development, a range of
alternative schemes meeting project goals are feasible, so
some form of evaluation must be carried out to select the most
appropriate to take forward. Evaluation criteria usually include
the economic, environmental and social contexts of a project as
well as the engineering challenges, so engineers must be familiar
with the processes and tools used.

The second edition of Engineering Project Appraisal
equips students with the understanding and analytical tools to
carry out effective appraisals of alternative development schemes,
using both economic and non-economic criteria. The building blocks
of economic appraisal are covered early, leading to techniques such
as net present worth, internal rate of return and annual worth.
Cost Benefit Analysis is dealt with in detail, together with
related methods such as Cost Effectiveness and the Goal Achievement
Matrix. The text also details three multi-criteria models which
have proved useful in the evaluation of proposals in the
transportation, solid waste, energy and water resources fields: the
Simple Additive Weighting (SAW) Model, the Analytic Hierarchy
Process (AHP) technique and Concordance Analysis. There is a full
discussion dealing with risk and uncertainty in these
models.

With many worked examples and case studies, Engineering
Project Appraisal is an essential text for both undergraduate
and postgraduate students on professional civil engineering
courses, and it is expected that students on planning and
construction management courses will find it a valuable addition to
their reading.

Autorentext
Martin Rogers BE, MEngSc, PhD, BA(Public Ad), CEng, MICE, MRTPI, Chartered Engineer and Chartered Town Planner is currently an Assistant Head of School in the School of Civil and Building Services Engineering. Aidan Duffy BA, BAI, MBA, PhD is a lecturer at the Dublin Institute of Technology where he specialises in the financial, economic and policy assessment of renewable energy technologies and energy efficient systems.

Klappentext
In most cases of civil engineering development, a range of alternative schemes meeting project goals are feasible, so some form of evaluation must be carried out to select the most appropriate to take forward. Evaluation criteria usually include the economic, environmental and social contexts of a project as well as the engineering challenges, so engineers must be familiar with the processes and tools used. The second edition of Engineering Project Appraisal equips students with the understanding and analytical tools to carry out effective appraisals of alternative development schemes, using both economic and non-economic criteria. The building blocks of economic appraisal are covered early, leading to techniques such as net present worth, internal rate of return and annual worth. Cost Benefit Analysis is dealt with in detail, together with related methods such as Cost Effectiveness and the Goal Achievement Matrix. The text also details three multi-criteria models which have proved useful in the evaluation of proposals in the transportation, solid waste, energy and water resources fields: the Simple Additive Weighting (SAW) Model, the Analytic Hierarchy Process (AHP) technique and Concordance Analysis. There is a full discussion dealing with risk and uncertainty in these models.

With many worked examples and case studies, Engineering Project Appraisal is an essential text for both undergraduate and postgraduate students on professional civil engineering courses, and it is expected that students on planning and construction management courses will find it a valuable addition to their reading.

Inhalt

Preface xiii

Introduction xv

PART 1 ECONOMICS-BASED PROJECT APPRAISAL TECHNIQUES 1

1 Decision Making and Project Appraisal 3

1.1 Decision making context 3

1.2 Techniques for decision making 4

1.3 Primacy of the rational model 13

1.4 Decision-making conditions 14

1.5 Project planning process 16

1.6 Example of a decision process 22

1.7 Summary 25

1.8 Review of succeeding chapters 26

2 Basic Tools for Economic Appraisal 29

2.1 Introduction 29

2.2 The time value of money 29

2.3 The estimation of interest 30

2.4 Simple and compound interest 31

2.5 Nominal and effective interest rates 33

2.6 Continuous compounding 34

2.7 Time equivalence 35

2.8 Economic computation 37

2.9 Summary 50

3 Present Worth Evaluation 51

3.1 Introduction 51

3.2 Present worth the comparison process 52

3.3 Summary 65

4 Equivalent Annual Worth Computations 67

4.1 Introduction 67

4.2 The pattern of capital recovery 67

4.3 Modifying annual payments to include salvage value 69

4.4 Evaluating a single project 71

4.5 The comparison process 72

4.6 Summary 77

5 Rate of Return Computation 79

5.1 Introduction 79

5.2 Minimum Acceptable Rate of Return (MARR) 79

5.3 Internal Rate of Return (IRR) 80

5.4 IRR for a single project 80

5.5 Incremental analysis 87

5.6 Summary 94

6 Benefit/Cost Ratio Depreciation and Taxation 96

6.1 Introduction 96

6.2 Costs, benefits and disbenefits 96

6.3 Estimating the benefit/cost ratio for a single project 97

6.4 Comparing mutually exclusive options using incremental benefit/cost ratios 98

6.5 Depreciation 99

6.6 Taxation 102

6.7 Summary 104

7 CostBenefit Analysis of Public Projects 107

7.1 Introduction 107

7.2 Historical background to costbenefit analysis 108

7.3 Theoretical basis for costbenefit analysis 110

7.4 The procedure of costbenefit analysis 111

7.5 Identifying the main project options 111

7.6 Identifying costs and benefits 111

7.7 Placing valuations on all costs and benefits/disbenefits 112

7.8 Assessing and comparing the costbenefit performance of options 115

7.9 Sensitivity analysis 117

7.10 Final decision 119

7.11 Case study: the costbenefit analysis of a highway improvement project 119

7.12 Case study: water supply scheme in a developing country 128

7.13 Case study: costbenefit analysis of sewer flooding alleviation 135

7.14 Advantages and disadvantages of traditional costbenefit analysis 137

7.15 Techniques for valuing non-economic impacts 138

7.16 Using costbenefit analysis within different areas of engineering 148

7.17 Summary 151

8 Economic Analysis of Renewable Energy Supply and Energy Efficient Projects 154

8.1 Introduction 154

8.2 Policy context 154

8.3 Renewable energy supply and energy efficient technologies 157

8.4 Economic measures for renewable energy and energy efficient projects 163

8.5 Estimating GHG emissions 179

8.6 Uncertainty 183

8.7 Case studies 186

9 Value for Money in Construction 193

9.1 Definition of Value for Money 193

9.2 Defining Value for Money in the context of a construction project 194

9.3 Achieving Value for Money during construction 194

9.4 Whole-life costing 195

9.5 The concept of 'milestones' 196

9.6 Detailed description of the Value for Money framework 197

9.7 Value for Money and design 206 9.8 Is there a conflict between Sustainability...