Vehicle operation cost & factors affecting its economic evaluation

Economic evaluation of transportation like highways is very important for its approval from ministry and an applause from public. The benefits are assessed and a comparison is made with the cost involved. If benefits are significantly high than cost involved then the project will win economically. Before reading this article, it is highly advisable to get some solid basics. Please refer our article on introduction to highway economics which is a great start from scratch for a beginner in this topic. Also advisable for others to refresh once by reading the introduction article.

The vehicle operation cost is the amount spent on vehicle operations like fuel for running the vehicle, oil for keeping parts lubricated, other maintenance costs etc., Poorer the highway is, more is the vehicle operation cost. Hence, benefits of VOC is the key factor in the economic evaluation of highway.

Vehicle operation cost -VOC
Vehicle operation cost -VOC

For the purpose of cost analysis, the vehicle may be classified into different groups such as the passenger cars, buses, light commercial vehicles, etc., The components of motor vehicle operation cost depend on several factors which may be grouped as below :-

  • Cost dependent upon the consumption of the fuel, and maintenance of air pressure in the tire, battery of the vehicle, wear and tear of the vehicle, oil for lubrication of the vehicle is the main cost of operation of the vehicle. Lesser these values more is the benefits.
  • Cost depending upon the  savings in the time of operation. more good the highway is lesser the time required for the travelling and this  saving in time can also be expressed in terms of monetary value ( saving of time is a positive increase in the monetary value of the benefit)  of the vehicle operation cost.
  • Cost depending upon the traffic factors like congestion volume to capacity ratio flow characteristics etc., Less the traffic (by constructing the new Highway or by improving the present Highway if we are able to decrease the traffic) less the VOC & more the benefits.
  • Costs dependent on type and conditions of pavements, topography, road geometry, etc., For example, with increase in roughness of a road surface, the Vehicle operation cost will also increases.
  • Accident costs. More better the road, lesser the accident lesser is the VOC, and more is the benefits.

The costs of VOC & time for unit distance may be represented by :-

T = a+ {  (b+c) / speed }                                                   

where,

  • T= The cost of vehicle operation and time for unit distance. (unit = vehicle-km)
  • a = Running cost per unit distance independent of  journey time.
  • b = A fixed hourly cost dependent on speed.
  • c = The portion of the running cost which is dependent on speed.

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