Objective of CBA
The following task relates to evaluating the various options for “Department of transport (DIT)” which are presently put to use for minimising the daily heavy traffic from CBD Adelaide towards the northern suburbs of Adelaide. In this regard, the DIT has come up with two main hypothesis which is consideration of either Option A to construct a new tram line linking Adelaide city with Elizabeth or option B which is based on construction of the expressway linking construct a new tram line linking Adelaide city with Elizabeth. In this manner, it is important to note how DIT is seen with the requirement of consideration of the best option among both Option A and Option B (Tereso et al. 2019). Moreover, the overall execution of the project has taken into account the heavy road traffic from Adelaide CBD to northern suburbs which can affect the proposition of both the projects associated with Tram line and expressway. The main excerpts of the report have included brief description pertaining to the objective of CBA. In addition to this, the discussions also include description of two alternatives namely Option A and Option B, listing the description of the costs of option A and option B and list and description of the benefits in relation to consideration of Option A and Option B. In addition to this, the assignment has calculated the financial values of costs and benefits associated with Option A and Option B along with timeline of each item. Some of the other discussions of information include listing of Non-Quantifiable Benefits or costs, calculation of Net Present Value (NPV) and Benefit-Cost Ratio (BCR) for both Option A and B and determination of the best option (either Option A or B) to be initiated.
As per the given scenario, the main objective of CBA can be taken into account with choosing the right project between Option A to construct a new tram line linking Adelaide city with Elizabeth or option B which is based on construction of the expressway linking construct a new tram line linking Adelaide city with Elizabeth. Along with this, the project has also considered financial values associated with benefits and costs of both option A and option B.
In general, the expressways are also referred to as waterway, superhighway, Freeway, Parkway, thruway and throughway. In this regard, in order to construct expressway, the major arterial is seen to be segregated into traffic lanes in each direction considering opposing traffic. In addition to this, the main advantage of construction of expressways are mainly identified in form of better convenience for the drivers, increased safety and lower operating cost of the vehicles (Manap et al. 2021). Similarly, the consideration of literature for Tramway suggest how the Tramway track is mainly used as a version of light-rail along with grooved rails which is able to provide a protective flangeway for the purpose of tracking the streets. The construction of the tramways involves laying of several surfaces with several sweepers such as railway tracks are standard rates with grooved rails on concrete sleepers. The main disadvantage of consideration of tramways can be directly considered with posing a significant risk to the cyclists (Shiwakoti et al. 2019).
Description of Option A and Option B
The main cost involved for Option A and be directly identified with items such as feasibility study cost, land acquisition costs and compensation, Construction costs, Operation and Maintenance costs, Loss of land area for the national park, Ecological damage due to crossing the national park, Noise Pollution and Possible congestions during tram line construction at City X CBD. On a similar note, the relevant cost for the Options B would be directly identified in form of engineering and environmental studies, construction cost and operating cost (San Cristóbal et al. 2018).
The direct benefits of proceeding with Option A can be directly observed in form of receiving high amount of tram fare income, savings in travel time for the tram passengers, saving of lives and injuries with reduced accidents by road users and reduced congestion in other roads from City X to Town Y. In addition to this, some of the other benefits can be directly identified in form of increase in land values around the 8 tram stations and development of new amenities around 8 tram stations (Stanitsas, Kirytopoulos and Leopoulos 2021).
The nonquantifiable benefits can be directly identified with development of new amenities around 8 tram stations. Along with this, the relevant indirect costs associated with possible congestions during tram line construction at City X CBD cannot be quantified.
All costs are in $ Millions |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
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19 |
20 |
21 |
22 |
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24 |
25 |
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30 |
31 |
32 |
33 |
34 |
2021 |
2022 |
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2024 |
2025 |
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2027 |
2028 |
2029 |
2030 |
2031 |
2032 |
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2053 |
2054 |
2055 |
|
Costs |
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Feasibility study cost |
-0.24 |
-0.24 |
|||||||||||||||||||||||||||||||||
Land acquisition costs and compensation |
-270 |
||||||||||||||||||||||||||||||||||
Construction costs |
-144 |
-144 |
|||||||||||||||||||||||||||||||||
Operation and Maintenance costs |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
-6 |
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Loss of land area for the national park |
-60 |
||||||||||||||||||||||||||||||||||
Ecological damage due to crossing the national park |
-24 |
-24 |
-12 |
-12 |
-12 |
-12 |
-12 |
-12 |
-12 |
-12 |
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Noise Pollution |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
-1.8 |
|||||
Possible congestions during tram line construction at City X CBD (Difficut to quantify) |
|||||||||||||||||||||||||||||||||||
Net Costs |
-0.24 |
-0.24 |
-330 |
-144 |
-144 |
-31.80 |
-31.80 |
-19.80 |
-19.80 |
-19.80 |
-19.80 |
-19.80 |
-19.80 |
-19.80 |
-19.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
-7.80 |
Discounted Costs |
-735.89 |
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Benefits |
|||||||||||||||||||||||||||||||||||
Tram fare income |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
12.61 |
|||||
Savings in travel time for the tram passengers |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
43.8 |
|||||
Saving of lives and injuries with reduced accidents by road users |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
10.1 |
|||||
Reduced congestion in other roads from City X to Town Y |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
43.89 |
|||||
Increase in land values around the 8 tram stations |
972 |
972 |
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Development of new amenities around 8 tram stations (Difficut to quantify) |
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Net Benefits |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
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110.39 |
110.39 |
110.39 |
Discounted Benefits |
2,882.95 |
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Net Present Value (NPV) $ |
2,147.06 |
Millions |
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B/C Ratio |
3.92 |
Based on the consideration of NPV and BCR values, it is more visible to proceed with Option A which relates to construction of the new tram line from Adelaide city with Elizabeth. This can be directly identified when we compare the BCR of 3.42 for Option A and BCR of only 1.02 for Option B (Chawla et al. 2018).
Conclusion
On a concluding note, we are directly able to identify how the project has been able to consider Option A as there is a significant benefit such as receiving high amount of tram fare income, savings in travel time for the tram passengers, saving of lives and injuries with reduced accidents by road users and reduced congestion in other roads from City X to Town Y. Moreover, such benefits outweigh the cons of feasibility study cost, land acquisition costs and compensation, Construction costs, Operation and Maintenance costs and Loss of land area for the national park.
References
Chawla, V., Chanda, A., Angra, S. and Chawla, G., 2018. The sustainable project management: A review and future possibilities. Journal of Project Management, 3(3), pp.157-170.
Manap, N., Borhan, M.N., Yazid, M.M. and Wahid, N.A., 2021, May. An Overview of Heavy Vehicle Accidents Characteristic on Expressways in Malaysia. In IOP Conference Series: Materials Science and Engineering (Vol. 1144, No. 1, p. 012087). IOP Publishing.
San Cristóbal, J.R., Carral, L., Diaz, E., Fraguela, J.A. and Iglesias, G., 2018. Complexity and project management: A general overview. Complexity, 2018.
Shiwakoti, N., Stasinopoulos, P., Vincec, P., Qian, W. and Hafsar, R., 2019. Exploring how perceptive differences impact the current public transport usage and support for future public transport extension and usage: A case study of Melbourne’s tramline extension. Transport Policy, 84, pp.12-23.
Stanitsas, M., Kirytopoulos, K. and Leopoulos, V., 2021. Integrating sustainability indicators into project management: The case of construction industry. Journal of Cleaner Production, 279, p.123774.
Tereso, A., Ribeiro, P., Fernandes, G., Loureiro, I. and Ferreira, M., 2019. Project management practices in private organizations. Project Management Journal, 50(1), pp.6-22.