In this example, a highway agency in the Northern U.S., labeled “The Northern Agency,” is interested in calculating asset value and related measures to report for highway-related assets in its TAMP. Note, this example is adapted from tests with two different agencies, and is not intended to be representative of any actual agency.
This example presents a transit agency, located in the Western U.S., termed “The Western Agency.” The agency operates three different transit modes: buses; paratransit vehicles (also called “cutaways”); and a Light Rail Transit (LRT) system. The agency’s asset hierarchy is summarized in Figure 9-6. Major asset classes include revenue vehicles, equipment (service vehicles), facilities and infrastructure. Each of these asset classes consists multiple subclasses. The infrastructure asset class includes the largest number of subclasses. In addition to LRT track, which may be either tangent (straight) or curved, this class includes bridges, special trackwork (grade crossings and switches), and power assets (catenary wire segments, relay cases, and substations).
In this example, a state department of transportation in the Midwest, labeled the “Midwest DOT,” applies the economic value approach to quantify benefits realized by users of the state’s primary roadway network. For this example, the state’s primary roadway network is defined as all state-owned Interstates, primary arterials, minor arterials, and major collectors. This example follows the economic approach described in Chapter 4 to estimate the benefits of the primary roadway system. The example provides a better understanding of the value generated by the roadways for direct users and society as a whole. This example shows how state DOTs can estimate the value assets provide to users as compared to the replacement value method, which focuses on what those assets cost.
In this example, a state department of transportation in the Midwest, anonymized as the “Midwestern DOT”, calculated asset value for its pavements by separating the pavement into two components (the pavement base and the pavement surface) and calculating value for each component independently. This approach allowed the agency to develop a more nuanced asset valuation for pavement that accounts for the unique depreciation and lifecycles of both components.
In this case study, a state department of transportation in the Southwest, labeled the “Southwestern DOT”, calculated asset value for its pavements using two depreciation approaches to determine remaining (current) value. By comparing the results from the condition-based and age-based depreciation approaches, the Southwestern DOT was able to analyze the differences and identify the desired calculation approach for the DOT’s needs.
In this case study, a state department of transportation in the West, labeled the “Western DOT”, developed a tiered approach for calculating asset value for assets with varying levels of data availability. The agency, which includes numerous asset types beyond pavement and bridge in its asset valuation program, adjusted the calculation approach depending on the available data, allowing for a clearly defined and repeatable process.
In this case study, a state department of transportation (DOT) located in the Northwest, labeled the “Northwestern DOT”, calculated asset value for its bridges using three depreciation approaches to measure their remaining (current) value. In comparing the results from the composite condition rating, minimum condition rating, and age-based approaches, the Northwestern DOT was able to gain a more complete understanding of its bridge inventory and identify the desired calculation approach for the agency’s needs.
As part of NCHRP Project 20-44(46), the research team used data from the Federal Highway Administration’s (FHWA) Bridge Investment Program (BIP) tool to develop deterioration curves by component for bridges. The data includes all US states and offers a straightforward and repeatable approach to establishing a relationship between bridge condition and remaining value.
In this case study, a state-wide transportation agency in an eastern state, labeled the “Eastern DOT,” calculated the value of an existing bridge by determining the remaining user and social benefits of the structure. By comparing the anticipated lifecycle benefits with and without the bridge, Eastern DOT was able to determine the transportation and social value of the bridge to the traveling public and justify ongoing investments to keep it in good condition.
In this case study, a metropolitan transportation agency, labeled the “Metropolitan TA,” calculated asset value for its pavements using a condition-based depreciation approach to calculate value. The agency was able to use calculated asset value to help justify on-going pavement maintenance investments.
In this case study, the research team calculated developed a depreciation curve for cutaway buses using the market perspective to estimate current asset value. In comparing the results obtained using market value with those obtained by applying a linear, age-based depreciation curve to replacement value, the research team found the market value provides a different, and potentially more accurate calculation of asset value.
In this case study, the state department of transportation in a Western state, labeled “Western DOT,” calculated the value of an existing highway by determining the remaining user and social benefits of the facility. By comparing the anticipated lifecycle benefits with and without the highway, Western DOT was able to determine the transportation and social value the highway provides to the traveling public and businesses, helping to justify ongoing investments to keep it in good condition.
This section describes cases studies profiling the asset valuation approaches of two highway agencies from Britain and Australia. Each case study demonstrates how the agency defines its asset hierarchy, establishes replacement costs, and calculates depreciation. The agencies profiled in the case studies follow the asset valuation guidance established in their respective countries, and their work in this area predates the development of this document. Nonetheless, both agencies use approaches that are very consistent with the guidance presented here, illustrating the common philosophy between the guidance, international standards for calculating asset value, and the state of the practice worldwide.