Looking at the hole picture

Andy Russell of WRc Utilities calculates the costs of excavations for utility streetworks and highway authority roadworks

Holes in the road resulting from utility streetworks or highway authority roadworks have received much publicity recently. There has been increasing government and public interest in the amount of disruption caused by excavations and hole diggers are coming under increasing pressure to minimise disruption.

Since the introduction of the New Roads and Streetworks Act (NRASWA), highway authorities have had the power to charge for streetworks that over-run (Section 74 NRASWA) and more recently site trials of lane rental schemes (Section 74a NRASWA) have taken place.

This year, the Traffic Management Bill has introduced the possibility of permits being required before excavations can be undertaken for planned work, which could include restrictions on the timing of the streetworks. It would therefore be of great value for utilities, contractors and highway authorities to know how much disruption excavations are going to cause and how much this is likely to cost those affected. It would then be possible to check whether using alternative rehabilitation techniques could reduce the level of disruption and, where a lot of excavations are planned at a similar location, whether alternative programming of the work could minimise the overall amount of disruption caused.

This article focuses on research recently conducted by WRc, on behalf of a number of UK water utilities, which allows these issues to be investigated. All streetwork activities have direct costs, for example, those the utilities are obliged to bear, but they also result in indirect costs, such as those they are not legally responsible and which have to be borne by those impacted or affected by the streetworks, including the community adjacent to the streetworks or the environment as a whole.

Utilities get a lot of press coverage about streetworks disruption but it is not all one-way traffic. Statistics from the Transport Research Laboratory indicate 65% of disruption is due to the volume of traffic on the road (too many cars for the available road space), 25% is a result of traffic incidents (accidents, illegal parking, etc.) and 10% is due to roadworks (including work conducted by both the utilities and highway authorities).

While these figures were derived for trunk roads and motorways, they do indicate utility streetworks are only likely to account for a small proportion of the overall disruption. Research by WRc has shown the majority of streetworks are, unsurprisingly, repairs on burst water mains or sewer collapses.

These are relatively random, localised events and are reacted to as they occur, typically digging-down with an excavator. They are typically of short duration and therefore result in limited disruption. It follows then that the vast majority of indirect costs will come from a relatively small number of large (planned maintenance) streetworks. It is these larger, planned streetworks where alternative rehabilitation techniques may offer the improved solutions.

Direct costs

The direct costs of streetworks are relatively well defined but what is of real value to the asset manager is not just knowing how much it will cost to install or rehabilitate a pipeline today but how much that pipeline will cost over its lifetime. This would allow alternative asset management strategies to be costed to find the most appropriate solution. Over the last ten years WRc has developed and updated the Waterfowl whole-life costing software for distribution water mains. This whole-life costing approach is based on simple, net present value type (NPV) calculations. The model looks at a pipeline that requires rehabilitation and calculates the cost for each technique, over a given time horizon and for a given discount rate.

An example of the Waterfowl output is shown in Figure 1. This shows the direct costs for a hypothetical rehabilitation scheme on a 500m long section of six-inch cast iron pipework. The example is for an A-road along the high street of a busy town, the traffic being controlled by traffic lights (for example, shuttle working). It is assumed the pipeline has a high burst rate and high leakage. Figure 1 shows the cumulative discounted direct costs over a 50-year period for a range of rehabilitation options. The brown line illustrates a reactive policy (the pipeline is left in its current condition and bursts are repaired when they occur, the marginal cost of water lost due to leakage is paid for together with customer complaints).

These costs occur year-on-year and continue to accumulate over the life of the asset. The costs are assumed to remain constant over time, though the brown line is not linear, however, because of the assumed discount rate. The Waterfowl analysis discounts direct costs because it is anticipated efficiency improvements and technology advances will be made over time, which will result in lower future costs.

Unsurprisingly, the whole-life direct costs illustrated in Figure 1 show the rehabilitation techniques are initially more expensive than a reactive policy. This is due to the capital costs of rehabilitation being incurred in year one. The blue line represents the cumulative discounted costs of epoxy resin lining, this would typically be undertaken because of water quality issues, perhaps following high levels of customer complaints.

While in future years the cost of customer complaints would decrease, epoxy resin lining is assumed to not reduce the number of bursts or occurrence of leakage. The epoxy resin lining graph therefore closely follows the shape of the reactive policy graph as the customer complaint costs are only a tiny fraction of the overall costs. Slip-lining and open-cut trenching techniques both have a high capital cost but they are assumed (if correctly targeted and implemented) to greatly reduce bursting and leakage and so the cumulative costs do not increase greatly over time. We can conclude that, for this particular scheme, the reactive policy is initially the cheapest option (as there are no capital costs incurred) but that slip-lining is the cheapest whole-life option for costing periods of 18 years or more.

Indirect costs

A comprehensive review of conference papers, journal articles, websites and research reports was undertaken that identified a total of 19 indirect cost elements, which can be grouped as follows:

  • road users and road structure (four cost elements),
  • adjacent community (six cost elements),
  • local business (three cost elements),
  • environment (four cost elements),
  • other costs for society (two cost elements).
  • Cost models were developed for the major indirect cost elements for which reliable, accurate cost data were available, these included:

  • vehicle traffic disruption caused by streetworks,
  • road damage caused by streetworks,
  • pedestrian/cyclist disruption,
  • road accidents resulting from streetworks.
  • These indirect cost models were incorporated into an extract of the Waterfowl whole-life costing software to produce a total (direct plus indirect) whole-life cost model. The total cost model was re-run for the hypothetical rehabilitation scheme previously described. The Waterfowl graph is shown in Figure 2. The reactive policy curve is similar to that in Figure 1, with the exception that the indirect costs associated with repairing bursts result in the cumulative costs of this strategy rising at a faster rate.

    As we saw in Figure 1, the epoxy spray lining curve closely follows the same shape as for the reactive policy. The year one costs for the three rehabilitation techniques are much greater than before due to the high indirect costs associated with the streetworks activity, though slip-lining still remains the cheapest option (after year 33 instead of year 18 previously).

    Including indirect costs results in structural rehabilitation techniques becoming more attractive relative to others (reactive and epoxy spray lining) later in the 50-year period. While this implies when viewed over a short time period a reactive policy should be adopted, this is only an economic analysis.

    Relevant regulatory requirements (for example, the levels of service experienced by customers) should also be taken into account, and as such, a reactive policy may not necessarily be an appropriate option. Indirect costs were, for the case study undertaken, more significant than direct costs by a factor of 3.5.

    For mains located under a road with a high volume of traffic, the most significant indirect cost is vehicle traffic disruption (up to 98% of the indirect costs). However, when the main is located under a road with a low volume of traffic, the most significant indirect cost is road damage. While being able to estimate the direct and indirect costs of individual pipelines is of value to the asset manager, and could be used to select the most cost efficient rehabilitation technique for individual works, the real benefit lies in being able to collate a number of discrete works within a similar location.

    As such, when developing pipeline renewal programmes for a region (for example, within a district metering area) it is possible to investigate the effects of various rehabilitation strategies on direct and indirect costs. We can therefore establish the differences between alternative planned approaches to see what is the most cost efficient strategy for the utility, for example between a:

  • purely reactive policy,
  • whole-scale rehabilitation early in the planning horizon,
  • repair policy, whereby a utility conducts a limited number of planned and reactive repairs annually, which may result in repeat visits to particularly poor performance assets,
  • repeated, staged, small-scale rehabilitation schemes throughout the planning horizon.
  • For the larger schemes where streetworks run consecutively it is also possible to incorporate economies of scale. Such working could result in a reduction in the number of construction days required to complete the overall work package and consequently a reduction in both the direct and indirect costs.

    Future developments being planned include working with stakeholders to develop cost models for additional indirect cost elements. Also, serviceability benefits resulting from streetworks (defined as the value that customers place on the service they experience) could be incorporated to provide a more comprehensive analysis of the costs associated with streetworks activity.

    Sensitivity analyses have been conducted, which show the estimated whole-life costs are very dependant upon the input data. Future work will include collating robust data from stakeholders to further refine the analysis. The analysis presented here assumes no deterioration in the asset over time, for example, a constant burst rate and leakage rate. Waterfowl's functionality allows for the inclusion of asset deterioration, which could be incorporated in future updates.


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