PAD - LGED

increase was reduced by half, since the improvement in transport access generated by RPM
works was assumed to be less than that of road upgrading works. 19
14. The rate of increase in average household income was applied to baseline estimates of the
average household income in each upazila in order to calculate future average income levels. It
should be noted that baseline estimates were not possible for all 224 upazilas in the project area,
since the sample used for the Household Income and Expenditure Survey 2005 covered only
about half of the 1,000 primary sampling units (PSUs) throughout the country. By comparison, it
was possible to assemble raw sample data for 146 out of 224 upazilas (65 percent) in the project
area. In the case of upazilas where no income estimates were available, the weighted average
income for the relevant district was used.
15. Independently the number of households per project road was calculated in proportion to
the project road’s share of the total length of upazila and union roads in the upazila. This was
done both for the base year (2011) and for twenty years hence (2032). “With” and “Without”
project household income totals were calculated both for the base and terminal years by
multiplying the household number for the project road by the future and baseline average income
levels respectively. Accordingly, the incremental household income for the road project was
calculated by deducting the household income for the “Without” case from that of the “With”
case. It was assumed a phasing-in of benefits over the initial five years of the project life in
accordance with the following percentages: (i) ten percent for the first year (first year of
operation); (ii) 30 percent for the second year; (iii) 50 percent for the third year; (iv) 70 percent
during the fourth year; and (v) 100 percent during the fifth year.
16. In addition to the increased income for the rural population, a significant benefit for the
roads component of RTIP-II is a reduction in Vehicle Operating Costs (VOCs) resulting from
qualitative improvements to road surfaces. Such improvements will also allow an increase in
average speeds. This may also attract new traffic (generated traffic) and overtime a shift in the
modal mix from non-motorized to motorized vehicles. Increased average speeds will also lead to
travel time savings. However, this has not been included as a benefit in this study, since travel
time savings are reflected in increased household incomes.
17. The VOC benefits of road projects are measured by comparing the Vehicle Operating
Cost streams for the “With” and “Without” project cases. In the “Without project” case the road
will attract only normal traffic. It will grow from year to year but at a steadily reducing rate as
the quality of the road deteriorates. In the “With project” case, the normal traffic using the road
will increase year by year at considerably increased rates of growth as the quality of the road
improves. The benefits accruing to the normal traffic may be measured as the difference between
the unit VOC’s for the road in improved and unimproved condition respectively multiplied by
the relevant vehicle–km for each vehicle category on the unimproved road. In addition, the
improved road will attract new or “generated” traffic, the quantum of which may be estimated by
deducting the vehicle-km of the undeveloped road from the vehicle-km of the developed road.
Generated traffic represents a type of consumer surplus and its benefits may be measured in
19 This is assumed to be the case because roads selected for RPM treatment have previously been improved to a relatively high
standard and the intention is merely to restore these roads to their original condition. Thus, RPM sub-projects will have a
proportionately smaller impact on the improvement of transport access than road upgrading sub-projects.
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