PAD - LGED

makes adequate allowance for the importation of some construction materials (such as asphalt)
which will carry higher rates of tax.
Table 8.8: Calculation of economic unit construction costs, RTIP-II
Project type Unit Average Unit
construction cost
SPF Average Unit construction
cost(economic) Taka mill.
(financial) Taka mill.
Improvement of growth centre markets no. 6.2240 0.80 4.9792
Construction of landing stations with no. 6.9649 0.80 5.5720
goods/passenger handling facilities
Source: Recent LGED projects
28. It should be noted that these unit costs include allowance for the costs of monitoring and
supervision of construction works. The costs of GCM annual maintenance were assessed at six
percent of capital cost.
iii) Measurement of economic benefits:
29. The economic benefits of the GMC and ghats component includes: (i) increased produce
sales and lower spoilage rates in growth centre markets; and (ii) lower transportation and vehicle
operating costs.
30. Increased produce sales and lower spoilage rates in growth centre markets: The
economic benefits derived from the improvement of Growth Centre Markets have been assessed
as the reduced spoilage of perishable goods made possible by the construction of market stalls
with roofs and concrete floors to provide protection from the elements and from soil
contamination, etc. Reduced spoilage has been calculated for each perishable commodity sold as
the difference between the value of sales at the maximum selling price and the value of sales at
the average selling price. This difference reflects the extent to which prices will reduce as a
result of produce deterioration throughout the day. The purpose of the GCM improvement
projects is to eliminate the price reduction by eliminating the cause of produce deterioration.
Calculation of the economic benefits of these projects depends upon the collection, through field
surveys, of a considerable amount of data related to the types, quantities and prices of
commodities sold on hat and non-hat days at the markets which have been selected for
improvement.
31. Lower transportation and vehicle operating costs: The main purpose of upgrading the
ghats is to provide social benefits in the form of increased safety and/or comfort and convenience
for boat passengers through lower transportation cost and improved connectivity. Nevertheless,
estimation of the income increasing benefits of such projects depends upon an ability to measure
the number of households within their catchment areas.
iv) Results of economic appraisal and sensitivity analysis:
32. For individual project components, the results of the economic appraisal have been
assessed within the ranges as shown below. These results have been subjected to sensitivity tests,
involving:
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