The graphical representation of the demand schedule is the demand curve. The quantity and price are inversely related; that is, Q goes up when P goes down. The curve slopes downward, going from northwest to southeast. This important property is called the law of downward-sloping demand.

1. ARC 4205
Project Economics (A2)
Level 4 Term 2, Fall 2021
Course Tutor: Rifat Bin Ali
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2. Topic 3: Basic Components of Formal Physical Plan
Physical Planning in its broadest sense refers to a set of actions aimed at improving the Physical, Social and
Economic welfare of a place and its dwellers.
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 Components of physical plan, Analysis of major physical patterns
 Development of implementation strategy
 Determining the cost and benefits of physical plan
 Determining the cost effectiveness of the physical plan
 Scheduling and staging the physical plan
 Managing the implementation of physical plan
 Monitoring and evaluating the physical plan

3. Basic Component of a Formal Physical Plan
A formal plan is prepared by a local agency in which the spatial distribution of objects, functions,
activities and goals are explicitly recognized and mapped.
The substance and plans varies among cities and may contain some or all these components.
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4. 1. First, there is an analysis of the larger problem to demonstrate the potential benefit of a
physical plan.
2. Second, there is a detailed analysis of major physical and spatial patterns.
3. Third, there are specific recommendations for the spatial distribution of goals, activities,
functions and objects.
4. Fourth, there is a strategy for implementing, monitoring and evaluating the physical plan
itself.
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5. These four components are interrelated and they are frequently reiterated in the course of plan
development.
The planner may bounce back and fourth between examining the larger problem, developing the
recommended plan, analyzing specific spatial patterns and preparing an implementation strategy.
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6. Chart
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7. Most physical plans are not merely the of a problem-solving process, but are the means to some larger
objective such as economic development, social welfare or neighborhood improvement.
Consequently, the first step in analyzing the problem-solving context of a formal physical plan is to
examine the larger issues to see if a physical plan is really part of the answer.
1) Analysis of the Problem-Solving Context
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8. The purpose of this examination is to ensure that the physical plan will be relevant.
For example, let us assume that the overall objective is neighborhood improvement and the
appropriate neighborhoods have already been selected. Now the physical plan will be justified only if
it is properly coordinated to the other activities. The plan itself will not be useful unless it is
integrated from the outset with social, economic and political plans.
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9. This first task in delineating the scope of a physical plan is primarily an analytical function.
The physical planner typically gathers information from a variety of sources: census surveys and
other published reports, politicians, community organizations and other government agencies.
Frequently this activity is interdisciplinary, requiring coordination among physical planners as well
as other specialists in relevant fields, such as economics social welfare, health services and real
state development.
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10. This initial analysis of the problem situation is formalized in a report or official document. Although
there no hard-and-fast rules about how such a report should be organized, several subject usually are
covered:
1. The history of the situation,
2. The existing situation,
3. Problem needs,
4. Resources for a solution and
5. Subsequent activities.
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11. a. History of the Situation:
Except for major catastrophes or crises, urban problems do not
appear suddenly out of nowhere.
Thus an explanation of the history of the situation usually is
necessary in the area of neighborhood improvement, the history
might include major events that have affected the community for
for the past 20 years: new programs that have been
implemented; population changes in the area and shifts in the
surrounding neighborhoods. An accurate history of the problem
problem situation is a valuable technique in identifying the root
issues and possibly the solution.
Invasion of Non-residential Uses:
28% in 1984
35% in 1994
50% in 2004 11

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13. Land Use 1960 Land Use 1988 Land Use 2005
Expanding Dhaka Beyond Its Limit
Source: http://www.ceg.ncl.ac.uk/rspsoc2007/papers/115.pdf
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14. Flood 1988 (15 October) Flood 1998 (25 August) Flood 1998 (24 July)
Shrinking Dhaka during monsoon season
Source: http://www.ceg.ncl.ac.uk/rspsoc2007/papers/115.pdf
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15. 15

16. 2. A Detailed Description of the Existing Situation:
A wide range of existing conditions and activities are critical determinates of the problem situation.
Typically these include socio-economic characteristics, physical conditions and programmatic
activities.
As for example, for a neighborhood improvement projects, the socio-economic variables might
include age and income distributions, occupational and educational patterns and residential mobility.
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17. Physical conditions in this example would include housing characteristics and patterns, density, over
crowding existing utilities, vacant land, public improvement and commercial structures.
The programmatic activities might include educational and recreational programs, job training, social
social welfare, health service, loan programs and similar government activities.
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18. 18

19. c. Problem Needs:
Invariably the basis for analyzing a problem solving situation is an articulation of the specific needs of
of the client population or community.
These needs should be outlined and differentiated, by priority, into manageable components.
The might be categorized as social, economic and physical or according to population subgroups,
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20. d. Solution Resource:
In conjunction with problem needs, the analysis of the problem – solving context should identify the
resources that potentially could be used to solve the problem.
These include the available financial, organizational, social and political resources. The planner can
can specify here now physical planning activities can be used to solve the problem.
For example, neighborhood improvement may be aided by an outside consultant or new government
government agency or by requesting central funds for new construction.
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21. e. Subsequent Activities:
Finally the analysis should include recommendations for subsequent activities.
Although problem needs an solution resources have been identified, they may not all be appropriate
or feasible.
Moreover, they may not be match property to each other. i.e. a particular need will not really be met by
by the available resource. A strategy for taking the next steps must be described.
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22. These five components of an analysis of the problem-solving context provide an example but are not
necessarily useful in all situations. However it is critical that the first step in a physical planning activity
include a board image of the context in a which the activity will occur. If the analysis shows that
physical planning, is in fact unimportant or even unnecessary, this is important.
The physical planning process will be meaningless if its relevance to larger objective is not
established at the beginning.
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23. 2) Analysis of Major Physical Patterns
Although an analysis of the problem-solving context frequently involves maps and graphic descriptions
of the situation, many other variables must be considered in the development of a physical plan.
First, there is usually a land use map that denotes, for example, residential and commercial activities,
public uses, parks, institutions such as churches and hospitals, factories and vacant land. Often there is
a map showing the infrastructure – streets, pedestrian ways, sewers, gas and water lines and power
lines. There may be a related map of the transportation system, including traffic volumes and mass
transit routes.
Depending upon the problem, there may be a set of maps representing important physical conditions.
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25. 25

26. Example:
in a neighborhood improvement plan, there may be a map locating structures in need of repair,
those in good conditions and those to be demolished.
In other problems the special conditions that are mapped might be social or economic in nature.
When the planning problem is concerned more directly with objects, there are often maps of the
organization of existing physical forms (e.g., showing the linear patterns, exterior spaces, districts,
vegetation patterns, three-dimensional qualities of the area and critical architectural features).
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27. Finally, there is often a map describing the image of the physical planning area.
This map would show the distinctive features that influence the way people recognize and use the
area.
One standard classification of image-making physical features includes:
1) paths
2) districts
3) edges
4) nodes
5) landmarks
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28. 1) paths – both major and minor vehicular and pedestrian routes,
2) districts – identifiable areas or neighborhoods, such as a shopping district, downtown or an area
with older, smaller homes,
3) edges – the boundaries that define districts, including topographical features like rivers and
mountains, special land uses such as airports or industrial plants and major roads and highways;
4) nodes – central places with relatively intense concentrations of activity, such as, shopping centers,
parks, railway stations or major street intersections and
5) landmarks – distinctive objects used to identify special places, such as church steeples, unusual
building, vistas, billboards or highway or railway overpasses.
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29. 29

30. 30

31. 31

32. 32

33. 3) Proposed Spatial Distribution of Goals, Activities, Functions and Objects
Ultimately, the physician plan must make a specific recommendation for what should be done.
Generating these recommendations is a function not only of the preceding analytical phases but also
of professional expertise, intuition, tradition and critical judgment.
Often several alternative physical plans are prepared and analysis recommends one alternative as the
best.
These recommendations discuss goals, activities, functions and objects.
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34. a. Recommended Goals
The recommended goals are usually derived from the analysis of the larger problem – solving context.
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36. b. Recommended Activities
Each goal is related to a specific subset of constituent activities.
Determining these activities is equivalent to operationalizing the goals.
In the neighborhood improvement problem, a map might be prepared showing how the goal of
residential improvement is differentiated into such activities as a new zoning regulation, home repair
and maintenance problem and new residential construction.
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37. Similarly, the goal of commercial development might be separated into such activities as
consolidation of business, new investment opportunities and business, new investment loans.
Alternative locations for these different activities might also be identified.
Each activity is graphically correlated to its goal.
The audience for the physical plan can see how each goal translates into alternative subsets of
activities.
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38. c. Recommended Functions
Like the distribution of activities, the designation of functions is an operationalization of functions of
of the basic goals.
Both the activities and functions related to one goal might be represented on the same map.
The functions that would achieve a goal of neighborhood aesthetic improvement might include tree
tree planting, increased sanitation service and street repair.
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39. Other possible functions in a neighborhood improvement project might include construction of new
roads, street closings, provision of new utility lines and new boundaries for a police, fire or
district.
Again, each function would be given a specific graphic representation on the map correlated to a
specific goal.
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41. d. Recommended Objects
Most physical plans recommended the construction or modification of physical objects.
Most people think of this activity as the core of physical planning.
The established goals, activities and functions provide the criteria or constraints for the physical
design of objects.
Since physical design problems often require special expertise, this activity is often a job for
professional architects, landscape architects and/ or engineers, whose plans go beyond the simple
location of an object to the detailed drawing of what the object will look like, how it can be
constructed and it is likely to cost.
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42. These professionals make sophisticated aesthetic and technical judgment that go beyond the
normal domain of urban planning.
The associated graphic representations of objects include artist’s sketches, architectural models
and engineering drawings.
It is the physical planner’s responsibility to ensure that the professionals’ designs of the physical
objects fulfill the initial goals.
Alternative designs may be developed and the physical planner uses his or her judgment to decide
which design is most appropriate.
Although in many situations the physical planning team has the capability to design physical objects,
this activity must be recognized as a specialized operation requiring many financial and human
resources.
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44. 4) Development of an Implementation Strategy
The feasibility of a recommended physical plan is as critical as its substantive content. Feasibility is not
determined after the fact.
How a plan is to be implemented must be considered from the outset, along with the goals and
specific features of the plan.
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45. There are no established rules for devising the implementation of a physical plan.
Usually, however, reference is made to the
• plan’s costs and benefits,
• the scheduling or phasing of activities to implement the plan,
• the necessary managerial procedures and
• the manner in which the plan will be monitored and evaluated.
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46. a) Determining the Costs and Benefits of the Physical Plan
The most important tools of implementation are the capital improvement program and capital
budget.
Estimating the costs and benefits of a physical plan is a complex task.
The costs, for example, include not only the initial capital expenditures, but also the operational
funds needed to maintain the functions, activities and objects created.
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47. Cost benefit analysis is based upon the theory that
‘the selection of a project or program should be determined by its net contribution to
economy or to some clearly specified economic unit.’
Based on the economic concept of ‘marginality’, this contribution is expressed in a benefit-to-cost
ratio.
The benefit-cost ratio expresses total benefits generated by a given option, in money, over its total
costs means capital and operating budgets include items such as personnel (specialized consultant
well as regular staff), equipment, materials, labor and the final.
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48. Detailed estimate is done by specially trained professionals in the city government.
When cost include major construction items that will be built by private firms (such as a hospital or
a park) the costs may be determined by bidding, in which the private firms who wish to contract for
the work submit their own cost estimated to the city.
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49. b) Determining the Cost-Effectiveness of the Physical Plan
In many public projects it is difficult, if not impossible, to quantify the outputs in direct monetary
revenues (such as increased property taxes) but also considered in many intangible factors, such as
improved health, safety and welfare.
Cost-effectiveness analysis was developed as a tool for dealing with this problem.
Cost-effectiveness analysis allows the evaluation and comparison of programs with similar output
without converting those outputs into money.
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50. The utility of cost-effectiveness analysis in program evaluation is limited to comparing programs or
service with similar outputs.
It offers no way to aggregate the outputs of different types of programs into a common, comparable
denominator.
Therefore the project cost-effectiveness is the spillover effects of the physical plan that will affect
population groups and areas not initially considered part of the physical plan.
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51. For example, a new public facility will create new jobs, change daily patterns of transportation and
affect levels of service at other facilities.
Typically, a physical plan contains a budget approximation that lists the initial capital costs and short
short run operational costs.
If the project is sufficiently large or if there is significant political interest, a cost-benefit or cost-
effectiveness or any similar analysis may be presented to demonstrate the overall effect of the urban
area.
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52. c) Scheduling and Staging a Physical Plan
Time is as significant and complicated a resource as money.
If the numerous constituent activities in most planning projects are not properly coordinated, the
project will fail.
Frequently, for example if the planners of a certain project do not understand fully the logical
sequence of activities, they will miss scheduled deadline.
Usually the scheduling of activities is coordinated with the budget, especially since physical plans
often take several years to complete.
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53. Many physical plan are initially designed to be accomplished in phases or stages, with the
implementation of final stages dependent upon successful completion of earlier stages.
For example, in an urban renewal project the construction of a new park might be scheduled to
occur only after completion of new residential units.
The staging of a physical planning project may become a major political issue in that one group
will not be satisfied unless the part of the plan in which they have a special interest is given a high
priority and made part of an earlier implementation stage.
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54. d) Managing the Implementation of a Physical Plan
Human resources, as well as financial and temporal resources, must be arranged.
The implementation of a physical plan depends on a careful managerial structure to carry out the
necessary activities.
The responsibility and the authority for different decisions must be delegated in an appropriate
manner.
Frequently, new staff, outside consultants or private firms are hired to accomplish specialized tasks.
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55. The more difficult problem, however, is delegating responsibilities and authority among all the
various government agencies and elected officials whose cooperation is essential to the success of
projects.
Local agencies and official as well as those at regional, state and national government levels are
involved.
Management of a physical planning project also may require structured citizen participation, so
that special procedure for eliciting and using citizen opinion must be devised.
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56. e) Monitoring and Evaluating a Physical Plan
The details of an implementation plan should include provisions for both monitoring the
implementation to see that it is done properly and evaluating the final product to see if it matches
the original intentions.
Typically the monitoring function is built into the managerial structure.
At any point during implementation activities can be deleted, modified or added, either to ensure
that the plan unfolds as desired or to change it if the initial objectives have been modified.
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57. Most physical plans are not finally completed as first intended.
There are always unexpected events that prevents parts of the plan from being the plan or show why
some aspects of plan are inappropriate and need to be altered.
Evaluation of a physical plan is carried out after the plan is completed and operational.
An evaluation measures the extent to which the plan fulfills its original goals and discovers any
unpredicted positive or negative effects of the projects.
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58. Equally important, the evaluation allows the planners to find out which ideas were successful and
which were failure.
Too often the evaluation function is eliminated from the implementation plan because it seems like
an unnecessary expense.
Recently, however, urban planners have come to realize that unless they evaluated their projects
property, they will not know whether the thought processes and activities should be repeated,
emulated, avoided or discouraged in the future.
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