1. Value Incremental Comprehension (VIC) nomograph to
Evaluate socio-economic effectiveness of traffic safety projects
Author: Duy Khanh Nguyen
Faculty of Commerce and Administration
Victoria University of Wellington
Telephone (+84) 934 401 466
E-mail: ngkhduy@yahoo.com
Abstract
Evaluating the effectiveness of a Project is an extremely important process for ODA projects in
Vietnam in general and transportation safety project specifically. However, effectiveness evaluation of
transportation safety project, which means evaluation step after project was put into exploitation in
specific period (normaly from 3 to 5 years) have not been conducted. Derived from that practice, this
paper presents a new approach in order to assess the socio-economic effect of transportation safety project
named Value Incremental Comprehension (VIC) Nomogram
Keywords: VIC, Traffic Safety, Evaluate Effectiveness, Nomograph, Socio-economic effectiveness.
1. General Introduction
On the basis of intensive analysis of the socio-economic nature of investment in traffic safety,
VIC monograph establishes cause and effect relation including total investment of the project; losses
caused by traffic accidents and socio-economic impacts, other social and economic benefits from outputs
of traffic safety projects; important milestones such as starting time, finishing time of investment,
payback time, economic life of the project. With the creativity and understandability, VIC monograph has
become a useful tool for both economic and financial analysis to absorb and mobilize fund sources from
different sectors for traffic safety projects.
2. Literature Review
For the evaluation of the project, we first need to distinguish between two different concepts:
Completion evaluation or ending period assessment (by VAC method): is done immediately after
the project ends, probably by the independent expert or project management unit or both parties
coordinated conduct. The focus of assessment is the result of project implementation and effectiveness of
the project.
Impact assessment or post-project evaluation (by VIC nomograph) - carried out by the
independent assessment expert, usually between 2 and 5 years after completion of the investment with
focus on the impact and sustainability of the project.

2. Fig. 1 Value Incremental Comprehension
Some of the benefits (social and economic benefits such as BEconomy) can be achieved immediately
after completion of investment at Tinvestment completion. In general, there are 4 solution groups (4Es) in the
traffic safety projects consist of: HARD solution group (Construction of infrastructure – Engineering) and
SOFT solution groups (Traffic safety propaganda and education – Education; Traffic safety enforcement
– Enforcement; Traffic accidents emergency - Emergence) 2
.
As for the Engineering component (Hard component), it can be evaluated (from the time Tinvestment
completion) according to criteria pair: Progress - Cost. Problems and solution for evaluate implementation of
project related to “progress” and “Implementation cost” can be reviewed more closely in the Appendix 1
at the final of this paper
Two types of completion evaluation and post-project assessment is the basis of reviewing of
policies and strategic decisions of the relevant authorities. This type assessment is external and is carried
out by sponsors. In addition, there are some other specific project evaluations of implementation process
such as:
Difficulty evaluation: main purpose of this evaluation is to find solutions to specific difficulties
arise during project implementation;
Dissolving evaluation: this is one type of evaluation made when sponsors want to finish the
project ahead of time. The main purpose of this type of evaluation is to review the objectives of the
sponsors have done right or not.

3. Fig. 2 Classification schemes for project evaluation in the investment cycle
3. Methodology
Feasibility of Traffic safety projects: As for traffic safety projects, Investment cost Cinvestment is
calculated based on losses Closs caused by traffic accidents to national economy.
Accordingly, minimum calculated social losses Closs will be converted in correspondence with
social benefit Bbenefit to evaluate the feasibility/effectiveness of the investment project according to Cost-
benefit ratio. The comparison between input (cost) and output (benefit) evaluates the economic
effectiveness of the investment project. All costs and benefits at different period of time are converted to
the calculated index year.
If only above social benefit Bsociety is taken into consideration, temporarily excluding economic
benefits from traffic environment improvement such as save travelling time – cost, reduce traffic jam,
save cost for vehicle operation, reduce environmental pollution, etc, the formula of feasible project can
be shown as follows:
Bsociety ≥ Cinvestment or Closs ≥ Cinvestment
Total investment line: Total investment Cinvestment is the sum of all cost estimates of project items
determined at investment decision stage and considered as a constant. Total investment line is parallel to
time axis (horizontal axis).
T0: Starting time of the project investment.
Tinvestment completion: Investment finishing time and completion of project.

4. Teconomic life: Economic life or project life is the period from the end of investment implementation
stage; start to put the project into exploitation, going on with development process, until when it cannot
bring about any effect and the Employer decides to end the project. Project life is an important economic
indicator of the project. Therefore, it is required to conduct a careful market survey during the project
preparation stage so as to estimate the most exact project life; on which appropriate economic calculations
are made.
Although traffic safety program also include infrastructure development items, the life of traffic
safety projects is shorter. Therefore, it is required to maintain traffic safety works more regularly. Time
for evaluating economic effectiveness of these projects is 10 years (depending on type of the project)
from the end of the first year that the project is exploited and the evaluation will be conducted after the
project is put into operation for 3 years.
Risks: Together with the non-stop development of the human being, risks in traffic are an
objective factor that human cannot get rid of. The history has proved that many developed countries have
had a great of humanitarian achievements in traffic safety, but mitigating and repelling traffic accidents
remain their target to achieve. To sum up, in spite of how low is the risk of traffic accidents to human
beings, it will stay forever in traffic environment.
Closs line: Start from the point with the value of total investment as shown in the graph. At the
beginning of the project, traffic accidents situation has not been improved because countermeasures have
been applied. Thus, the trend of loss is upward from T0 to Tinvestment completion. After the project completion,
traffic accidents decrease gradually; thus, the trend of loss is downward from Tinvestment completion to Teconomic
life. Afterwards, Closs is parallel to the time axis, reflecting the inevitable feature of risks as explained
above.
Cross point G: Cross point G is the starting point of investment and represent total investment
amount.
The reason cross point G is selected as the starting point of Closs line is that the decision for total
investment arrangement must satisfy the lower limit Cinvestment = Closs.
Social benefits line: Bsociety – the social benefits are benefits gained from the decrease in traffic
accidents calculated based on economic benefits from the reduction of number of traffic accident cases,
number of injuries and material losses caused by traffic accidents annually. These benefits are obtained
from the reduction of economic damages caused by traffic accidents. Economic damages caused by traffic
accidents are calculated by “total output value” method.
(For further explanation of “total output value”, please see Appendix 2 at the end of this paper).
Economic benefits line: Beconomy are economic benefits from the reduction of travelling time and
vehicle operation costs in addition to benefits from improvements in natural environment (decrease in
hazardous exhaust emission…) and social environment (development of traffic culture …..). In some
specific projects, economic benefits are also gained from the reduction of traffic controlling equipment
operation and maintenance.
Total benefits line: B∑benefits Total socio-economic benefits are calculated according to the
following formula:
B∑benefits= {Bsociety+Beconomy}

5. Applying the method of graph sum to represent B∑benefits, we can see the B∑benefits line is parallel to
the Bsociety line with the distance of Beconomy.
Tpayback: is the period from the year investment start to the year of complete return of investment,
if B∑benefits= {Bsociety+Beconomy}, this time is the cross point between total investment line and B∑benefits line.
T*: is the period from the year investment start to the year of complete return of investment; if
B∑benefits= Bsociety, this time is the cross point between total investment line and B∑society line.
Increment ΔT:
ΔT= {T*-Tpayback}=BEconomy x
Cot(α).
In which: α angle is the slope of Bsociety line.
Meaning of increment ΔT: if applying the formula B∑benefits= {Bsociety+Beconomy}, Tpayback will be
ΔT years earlier than that when applying the formula B∑benefits= Bsociety.
4. Conclusion
Analysis of socio-economic effects of traffic safety projects by VIC nomograph is applicable to
evaluation of the project’s effectiveness.
VIC nomograph is also widely applicable to analysis of financial rate of return, towards the
development of tax policy and governmental subsidy, etc to raise funds from private sectors for one or
some components or the whole traffic safety project when traffic accidents trend forecast and other
economic benefits are calculated scientifically and practically.
Assessing the effectiveness of traffic safety projects by VIC method will also pave the way for
financial analysis and attracting Public Private Partnership (PPP) for developing transport infrastructure.
With VIC method, the financial experts can conduct analysis of the expectations of stakeholders
(financial institutions, sponsors/ investors, public authorities, etc…) in the context of infrastructure
investment. At the same time, they can define the bindings and long term compromise; object-oriented
analysis; grouping financial criteria and risk analysis from which to encourage public-private partnership
in transport infrastructure.
4. Acknowledgment
I would like to thank Lambert Academic Publishing for accept my paper and giving me the
opportunity to publish it in the printed book form.
I am thankful to Transportation Development and Strategy Institute (Ministry of Transportation
Vietnam) and the Council of Science/Technology of the MOT for acknowledging the academic aspects of
VIC nomograph (Value Incremental Comprehension).
I would like to thank The Vietnam Transport Journal (ISSN 0866-7012) for recognizing VIC
nomograph and officially announced my article at their academic journal dated April’2012.
Lastly I would like to thank all the people who are directly or indirectly involved and helped
during the study.
5. References
[1] Nguyen, D. K. (2012). Value Incremental Comprehension (VIC) nomograph to evaluate socio-
economic effectiveness of traffic safety projects. The Transport Journal, 4, p.52-53.
[2] Nguyen, D. K. (2012). Value Analysis Connecting (VAC) method and evaluation of traffic safety
projects performance. The Vietnam Bridge and Road Journal, 4, p.50-53.

6. Appendix 1
Problem: Progress Indicator as well as costs Indicator of a project has third possibility: equal (=),
beyond (>) or slower (<) than the plan. Please indicate all the cases represent relationship of the pair
Progress-Cost with 3 possibilities mentioned above?
Example Chart.1 The actual cost is lower than expected cost & the progress earlier than
expected time.
Solution: Call n the number of elements representing the possibilities: equal, or beyond or slow;
so n = 3.
Call k the number of elements representing the targets: Progress and Costs, so k = 2.
Applying formula to calculate Enumerative combinatorics k = 2; n = 3: F (n, k) = nk
= 32
= 9.
Thus, there are total nine cases/charts. In it, including a “perfect case”: Progress = PlanProgress
and
Cost is qual Plancost
with a small and acceptable measurement uncertainty (± δ). For example: before /
after a few days / weeks in term of progress or higher / lower than few VND million in term of cost.

7. Appendix 2
Mindmap.1 Damage Assessment of Traffic Accident
Economic damages caused by traffic accidents are calculated by “total output value” method.
In summary, there are three main group of damage/cost which is quantitative and used to
calculate the economic damage. This reduction of economic damage is the gain of social benefits.
1. Administration cost: The cost for police and other services from the activities of the crash
investigation and management cost for insurance companies in the process of making the
payment of insurance procedures. Here this cost is assumed 3%.
2. The damage to property cost: The cost of repairing damage to vehicles and other assets
including the cost of the people who got accident themselves pay and fees/expenses that
insurance companies pay for them.
In the damage cost to property can be classified further into three sub-categories:
 Damage cost to Vehicles: Using data coverage of the insurance companies.
 Damage cost to Transportation infrastructure: Using the average cost of regular repair
due to traffic accidents.
 Damage cost to Goods: Using the methods of worldwide method.
3. The costs related to traffic accidents: classified further into three sub-categories:
 Loss of output value: calculated based on GDP can be produced per person. Assessment
of losses due to inabilities of people who got injury in the long run and cannot work.

8. - For married: Loss calculated through additional allowance for their minor children.
- If victim is breadwinner of the family: Loss calculated must include additional social
assistance.
- If victim is juvenile: calculate loss by estimated total GDP value of that person from
16 until retirement.
- For minor injuries: Do not calculate GDP losses
- For disabled injuries: adding social allowance for calculating losses.
 Health and funeral expenses: The cost of treating injuries caused by accidents (for both
mortality and injuries case). These costs include expenses for doctors, medical expenses
and hospital fees.
 The loss of spiritual pain: The loss due to damage to health, spirit of victims themselves
as well as their family and friends. To be quantitative, assuming 28% for deaths and 50%
for temporary, permanent disability.