PAD - LGED

Table 8.1: Calculation of economic unit construction costs, RTIP-II
Project type Unit Unit construction
cost (financial) Taka
mill.
SPF Unit construction
cost(economic)
Taka mill.
Improvement of upazila roads km 11.60 0.80 9.28
Improvement of union roads km 5.925 0.80 4.74
Rehabilitation/maintenance of km 3.45 0.80 2.76
upazila roads, including
bridges/culverts
Source: Recent LGED projects
Note: The unit costs include allowance for the costs of monitoring and supervision of construction works.
7. The economic appraisal must also make allowance for the annual maintenance of the
improved infrastructure. The financial costs of annual maintenance were obtained from the
LGED database maintained by RIMMU (Road Infrastructure Management and Maintenance
Unit) and were converted to economic costs through application of an SPF of 0.80. The costs
used are:
Table 8.2: Financial Costs of Annual Maintenance
Category
Description/Cost
Routine Maintenance of UZR:
Off-pavement Tk. 32,926 per km per annum, on pavement
patching Tk. 67,214 per km per annum, total Tk. 100,130 per km
annually, economic cost Tk. 80,100.
Routine Maintenance of UNR: Cost reduced to reflect narrower pavement standard of 3.0m
width for UNR, 3.66m width for UZR, average Tk. 83,200 per km
annually, economic cost Tk. 64,000.
Periodic Maintenance of UZR:
Periodic Maintenance of UNR:
iii) Measurement of Economic Benefits:
Tk. 2.024 million per km, assumed five-year cycle, economic cost
Tk. 1.62 million.
Again, cost reduced to reflect narrower pavement standard, Tk.
1,656 million per km and five-year cycle, economic cost Tk. 1.325
million.
8. The economic benefits of the project were assessed for the three categories of roads subprojects
– improvement of UZR, improvement of UNR, and rehabilitation and periodic
maintenance (RPM) of UZR and UNR. For the rural population of the target area, these benefits
include:
• Increased incomes and reduced poverty, as a result of improved mobility and better
access to markets, as well as to health, education and government services;
• Increased employment; and
• Lower transportation and vehicle operating costs.
9. The overriding purpose of RTIP-II, as is the case with any rural infrastructure project, is
to reduce poverty and stimulate development by increasing the household incomes of
impoverished rural communities. This is achieved by improving the access of these communities
to markets and other sources of income generation, as well as to health services, education and
local government facilities. Thus, of the benefits listed above, increased income represents the
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