COST-BENEFIT ANALYSIS OF HIGHWAY MAINTENANCE IN THAILAND (Paper 631)

The Department of Highways (DOH) is a state agency under the Ministry of Transport, Thailand and is responsible for planning, designing, constructing, and maintaining highway infrastructure throughout Thailand. Highway maintenance is one of the major tasks for the DOH to provide safety and comfort for users. The DOH has also developed one own pavement management model called the Thailand Pavement Management System (TPMS) where the level of International Roughness Index (IRI) is set at 3.50 m/km as a threshold to distinguish between acceptable and unacceptable pavement conditions. This paper attempts to answer how much of the highway network should be maintained at the acceptable level of IRI threshold so that the state welfare will be an optimal condition. Using microeconomic concept, benefit and cost of pavement maintenance are plotted on the same graph where the horizontal axis represents the percentage of the highway network with the acceptable level of IRI. The optimum is where the maximum net benefit, benefit less cost, occurs. On the marginal benefit and marginal cost curves, the optimum point is where the marginal cost and the marginal benefit curves intersect and represents the maximum social surplus condition under microeconomics concepts. Any deviation from the optimum will result in a reduction of the social surplus. This paper also presents a simple optimal allocation with budget constraints where the optimal allocation is formulated as a simple benefit maximization problem and solved by the Lagrange multiplier method. Solutions, obtained from the Lagrange multiplier method, show that at the optimal allocation for a given available budget the marginal benefit of each maintenance activity type divided by the corresponding unit cost should be constant across all activity types. The proposed method has demonstrate itself to be a useful model for pavement management system.