# LIFE CYCLE COST ANALYSIS OF PAVEMENTS

It is seldom readily apparent which is the most economical rehabilitation method for a particular pavement. Each rehabilitation strategy has unique initial construction costs, performance expectations, and future maintenance needs. What is most economical for one pavement may not be for another. Local costs may differ from one location to another, and material performance expectations may be different from region to region. The only rational way to compare one rehabilitation strategy and another is to perform an economic analysis of the alternative strategies. The method used for such a study is the life cycle cost analysis (see Chap. 10).

It is not good practice to compare a minor pavement rehabilitation strategy and a complete pavement replacement strategy. Even when comparing a new rigid pave­ment and a new flexible pavement, difficult choices must be made concerning the expected performance of each pavement type. Table 3.29 shows a hypothetical example of life cycle cost analysis assuming a 35-year performance period for both alternatives with no salvage values at the end of the period. It is not the intent to show that one pavement type has an economical advantage over another, as many hypothetical assumptions were made in the example. The intent is to indicate the level of information needed to make a life cycle cost analysis, and the information an analysis presents.

Probably the most important consideration in a life cycle cost analysis is the selec­tion of the discount rate used to evaluate the time value of money. It is sometimes defined as the difference between the market interest rate and the rate of inflation. (Article 10.8.2 provides further discussion on this subject.) Because costs are incurred at different times over the life of a pavement, the discount rate is used to convert these costs occurring at different times to equivalent costs in present dollars. In the example

 Length: 3.16 mi (5.08 km) Lane number: 5 Lane width: 12 ft (3.66 m) All Lane widths vary; average width of roadway Dimension, Item in sections in curb—no shoulders ■ = 60 ft (18.3 m) Quantity analysis Cost analysis Unit ALT1 ALT2 Price ALTl ALT2 Main lane AC surface course 1.25 CY 3,862 \$46.00 \$178,000 AC intermed. course 1.75 CY 5,407 \$44.00 \$238,000 Bituminous base 7 CY 21,628 \$39.00 \$844,000 Aggregate base 6 CY 18,539 18,539 \$18.00 \$334,000 \$334,000 JRCP 9 SY 111,232 \$22.00 \$2,447,000 Asphalt prime coat SY 44,493 \$1.50 \$67,000 Subtotal \$2,781,000 \$1,661,000 Future maintenance 10 years Pavement milling 1.50 SY 111,232 \$1.20 \$133,000 AC surface course 1.25 CY 3,862 \$46.00 \$178,000 AC intermed. course 1.75 CY 5,407 \$44.00 \$238,000 20 years Pavement milling 3.00 SY 111,232 \$1.75 \$195,000 AC surface course 1.25 CY 3,862 \$46.00 \$178,000 AC intermed. course 1.75 CY 5,407 \$44.00 \$238,000 Bituminous base 3 CY 9,269 \$39.00 \$362,000 Joint repair, 3% SY 3,337 \$35.00 \$117,000 Pavement sawing LF 1,430 \$1.20 \$2,000 Diamond grinding SY 111,232 \$2.00 \$222,000 Transverse joint reseal LF 49,101 \$1.50 \$74,000 Longitudinal joint reseal LF 66,739 \$1.50 \$100,000

(Continued)

 Item Dimension, in Quantity analysis Cost analysis Unit ALT1 ALT2 Price ALTl ALT2 Future maintenance (cont.) 30 years Pavement milling 1.50 SY 111,232 \$1.20 \$133,000 AC surface course 1.25 CY 3,862 3,862 \$46.00 \$178,000 AC intermed. course 1.75 CY 5,407 5,407 \$44.00 \$238,000 Subtotal \$515,000 \$2,071,000 Grand total \$3,296,000 \$3,732,000

Conversions: 1 in = 25.4 mm, 1 yd2 = 8.36 m2, 1 yd3 = 0.765 m3.

AC = asphalt concrete; JRCP = jointed reinforced concrete pavement; CY = cubic yards; SY = square yards; LF = linear feet.

 FIGURE 3.59 Sensitivity analysis showing effect of discount rate selection on life cycle cost of pavement alternatives.

shown in Table 3.29, the discount rate was unrealistically assumed as zero. Figure 3.59 shows the effect of discount rates from 0 to 6 percent. As is typically the case, the analysis is very sensitive to the discount rate. In this example, the rigid pavement pro­vides the lower life cycle cost when the discount rate is less than about 1.7 percent, and the flexible pavement when the rate is higher. It is apparent that the discount rate must be selected with great care.