Florida International University Extra Credit Assignment BCN3753- Financial Management of Construction Organization Spring 2017 Extra Credit Assignment Page 1 of 5 Extra Credit Assignment Economic Analysis in Public Project Hand-Out Date: March 14, 2017 Due Date: April 18, 2017 Project Description The Gulf Coast Parkway is a proposed new roadway that will connect US 98 in Gulf County with US 231 in Bay County (see Figure 1). Figure 1 – Project Location Map and Study Area The existing corridor is becoming increasingly congested and the roadway is insufficient for freight movement via trucks. The proposed new roadway would provide additional traffic capacity, improve Sebastian Rojas Florida International University Extra Credit Assignment BCN3753- Financial Management of Construction Organization Spring 2017 Extra Credit Assignment Page 2 of 5 access to state roads, and provide an improved freight corridor for the region. The new route will provide for more direct access to US 231 and in turn provide improved access to Interstate-10, as well as providing greater accessibility to the coastal communities in Gulf County. Currently, US 98 crosses through Tyndall Air Force Base. The proposed new roadway will bypass the air force base which will allow for heightened security on the base and provide an alternate route if passage through the base is temporarily blocked or restricted. Additionally, the new route will provide an alternative hurricane evacuation route for area residents. Florida International University Extra Credit Assignment BCN3753- Financial Management of Construction Organization Spring 2017 Extra Credit Assignment Page 3 of 5 Figure 2 - ...

1. Florida International University
Extra Credit Assignment
BCN3753- Financial Management of Construction Organization
Spring 2017
Extra Credit Assignment
Page 1 of 5
Extra Credit Assignment
Economic Analysis in Public Project
Hand-Out Date: March 14, 2017
Due Date: April 18, 2017
Project Description
The Gulf Coast Parkway is a proposed new roadway that will
connect US 98 in Gulf County with US
231 in Bay County (see Figure 1).
Figure 1 – Project Location Map and Study Area
The existing corridor is becoming increasingly congested and
the roadway is insufficient for freight
movement via trucks. The proposed new roadway would provide
additional traffic capacity, improve

2. Sebastian Rojas
Florida International University
Extra Credit Assignment
BCN3753- Financial Management of Construction Organization
Spring 2017
Extra Credit Assignment
Page 2 of 5
access to state roads, and provide an improved freight corridor
for the region. The new route will
provide for more direct access to US 231 and in turn provide
improved access to Interstate-10, as well
as providing greater accessibility to the coastal communities in
Gulf County. Currently, US 98 crosses
through Tyndall Air Force Base. The proposed new roadway
will bypass the air force base which will
allow for heightened security on the base and provide an
alternate route if passage through the base is
temporarily blocked or restricted. Additionally, the new route
will provide an alternative hurricane
evacuation route for area residents.

3. Florida International University
Extra Credit Assignment
BCN3753- Financial Management of Construction Organization
Spring 2017
Extra Credit Assignment
Page 3 of 5
Figure 2 - Five Selected Alternative Alignments
After a long time of study on the proposed new roadway, five
alternative alignments (see Figure 2)
were selected and approved by the Florida Department of
Transportation (FDOT) for further
evaluation. The length and estimated construction cost of the
five selected alignments can be found
in Table 1.
Table 1 – Length and Estimated Construction Cost
Alignments Length (miles) Estimated Construction Cost
(Millions)
8 38 $424.69
14 44 $460.68
15 48 $517.12
17 33 $430.32
19 38 $454.43

4. The proposed new roadway will enhance the economic
development in Gulf County through
providing direct access to major transportation facilities, direct
access to tourist destination in south
Gulf County, and improving Hurricane evacuation for residents
of coastal Gulf County. The direct
transportation benefits of each selected alignment is
summarized in Table 2.
Table 2 – Summary of Direct Transportation Benefits
Alignments
Commuting
Time
Savings to
Panama City
(Minutes)
Travel Time
Savings to
Airports
(Minutes)
Travel Time
Savings to
Transfer
Facilities

5. (Minutes)
Travel Time
Savings for
Tourists to
Coastal Gulf
County
(Minutes)
Improvements
Through
Enterprise
Zones (Acres)
Shortened
Hurricane
Evacuation
Distance
(Miles)
8 1.6 8 7.7 10.2 62.6 3.79
14 1.6 6.4 14.9 19.8 62.6 8.15
15 1.6 3.6 9.9 13.2 68.6 12.45
17 3.7 9.6 13.1 19.8 47 5.27
19 3.7 7.2 15.8 19.8 47 8.15
For transportation benefits: (1) the value of time savings can be
estimated based on the local wage
rates and the trip purpose. The value of time savings for
commuting travels is equal to 50% of the

6. gross wage, and the value of time savings for other travels is
equal to 25% of the gross wage. The
estimated daily traffic of different trips at year 2020, 2030, and
2040 can be found in Table 3, and the
local gross wages at year 2020, 2030, and 2040 are forecasted to
be $14/hr, $17/hr, $21/hr
respectively; (2) one acre of improvements through enterprise
zones will bring $0.4 million benefits
Florida International University
Extra Credit Assignment
BCN3753- Financial Management of Construction Organization
Spring 2017
Extra Credit Assignment
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to the local economy annually; and (3) one mile of shortened
hurricane evacuation distance will
reduce the evaluation cost by $1 million when a hurricane hits
the region.
Table 3 – Estimated Future Daily Traffic of Different Trips
Despite the benefits it will bring, the proposed Gulf Coast
Parkway will also have significant social

7. and environmental impacts. A summary of the social and
environmental impact can be found in
Table 4.
Table 4 – Summary of Social and Environmental Impact
Prior to the construction, all properties within the proposed
corridor should be purchased and
relocated, and all the affected historic or archeological sites,
wetlands, and endangered or threatened
species sites should be relocated or mitigated. To facilitate
your estimation of social and
environmental cost, the average cost to purchase and relocate
the properties can be found in Table 5,
and the average cost to relocate or mitigate the resources can be
found in Table 6.
Table 5 - Average Cost to Purchase and Relocate the Properties
Residential Parcels Business Parcels Agricultural Parcels
Average Purchasing and
Relocation Price
(Millions)
0.4/parcel 0.8/parcel 0.2/parcel
Table 6 – Average Cost to Relocate/Mitigate Resources

8. Archaeological or
Historic Sites Wetlands
Threatened and
Endangered Species
Sites
Average Relocation /
Mitigation Cost
(Millions)
0.4/site 0.1/acre 0.2/site
Year 2020 2030 2040
Estimated Daily Traffic to Panama City 18,200 22,100 26,900
Estimated Daily Traffic to Airport 10,300 12,500 15,200
Estimated Daily Traffic to Transfer Facilities 10,000 12,200
14,800
Estimated Daily Tourists Traffic to Coastal Gulf County 6,200
6,900 8,800
Alignments
Property Type Within the Corridor
Archaeological or
Historic Sites
Wetlands
(Acres)
Threatened
and

9. Endangered
Species Sites
Residential
Parcels
Business
Parcels
Agricultural
Parcels
8 48 9 108 9 339 17
14 49 3 79 12 504 16
15 50 3 75 9 508 17
17 63 8 68 4 439 26
19 48 6 95 6 575 25
Florida International University
Extra Credit Assignment
BCN3753- Financial Management of Construction Organization
Spring 2017
Extra Credit Assignment
Page 5 of 5
For any alignment selected, the construction will begin at 2017,
and will take 3 years to complete.
The useful life of the proposed Gulf Coast Parkway is 20 years.
Table 7 shows the maintenance and

10. operation costs of the proposed parkway within 20 years of
useful life.
Table 7 – Maintenance and Operation Costs of the Proposed
Parkway
FDOT invited you to evaluate the five selected alternative
alignments using benefit-cost analysis,
and determine which one of the alignments, if any, should be
constructed. Based on the above given
information, you need to prepare an evaluation report including
the analysis you conducted, which
alignment you would choose and any necessary assumptions you
made for your analysis.
Additional Tips:
x In this problem, the interest rate is not given so you need to
set the interest rate on your own.
Different interest rates used may lead to completely different
conclusion for this problem, so
you need to explain briefly why the interest rate is chosen.
x To estimate the benefits of the proposed parkway on travel

11. time savings, the annual benefit =
estimated daily traffic * 365 * time savings * gross wage * trip-
purpose modifier, for
commuting trips, the modifier is 0.5, and for other trips, the
modifier is 0.25. (Pay attention:
the gross wage given is an hourly rate, but the unit of time
savings is minute).
x In table 4, only the estimated daily traffics at year 2020,
2030, and 2040 are given. To find
out the estimated daily traffic of another year, you can assume
the daily traffic is changing at
the same speed from year 2020 to 2030, and from year 2030 to
2040. Similarly, you can find
out the gross wage at another year.
x The $1million/mile benefit of shortened hurricane evacuation
distance only happens when a
hurricane hits the region. You need to assume the frequency of
the hurricane first, e.g. once a
year.
Annual Operating
Costs (per mile) $10,500
Preservation cost at
Year 10 (per mile) $50,000

12. Rehabilitation cost at
Year 20 (per mile) $600,000