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Unit Rates For Asset Valuation Purposes

Local Government Asset Management Conference

Jag Vithanage and Ruwan De Silva

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Our values, our diversity

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Transport and Main Roads’ responsibilities include:

• Identifying and prioritising transport infrastructure needs for Queensland.

• Development and management of four-year Queensland Transport and Roads Investment Program (QTRIP) A$3.9b in year 2015–16.

• Leading the interface between the Queensland Government and the Australian Government for delivery of federally-funded transport projects.

• Managing and maintaining policies, systems and processes for effective program and project management delivery.

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Queensland Transport and Roads Investment Program (QTRIP) fundingbreakdown

QTRIP Funding 2015-

16 to 2018-19

2015-16 2016-17 2017-18 2018-19 Four year total

By entity: ($m) ($m) ($m) ($m) ($m)

Queensland Rail 763 559 391 444 2,159

Gold Coast Waterways Authority

9 - - - 9

Department of Transport and Main Roads

3,138 3,956 4,837 4,743 16,675

Total 3,911 4,516 5,228 5,188 18,843

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Transport and Main Roads in summaryTransport and Main Roads manages:

• State controlled road network of 33,343km.

• National Network roads of 5,017km.

• Other state-controlled – state strategic roads of 4086Km.

• Regional and district roads 24,243km.

• Busways in South East Queensland extending to 29km.

• Owns/maintain 3010 bridges, 3987 major culverts and 33 tunnels.

• Maritime infrastructure, cycleways and passenger transport system.

The department is the state's single largest physical asset owner with road network with a replacement value of $66 billion.

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Unit rate development methodology

• The department’s road network has been classified into 14

stereotypes and each stereotype corresponds to the appropriate

network standard.

• Stereotypical roads are combination of applicable design standard

and Model Road State.

• Work Breakdown Structure (WBS) has been developed for

corresponding stereotype.

• Work Breakdown Schedules (WBS) for 12 stereotypical roads with

variants for terrain, environment, CBR and region (quantities and

items) using first principles.

• Each WBS schedule include key elements of the corresponding

stereotype and cost estimates were prepared from first principles.

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Unit rate development methodology (continued)

• The unit rate costs data are developed using SmartCost database

and Expert Estimation tool.

• Five geographical cost regions in “SmartCost” provide the local

context of departmental road network upgrade costs.

• Contractors’ overhead and profit margin are applied based on the

corresponding stereotype.

• The department’s project management costs have been added to

the overhead costs as a percentage of the construction costs.

• Stereotype project costs are calculated based on 5km road length.

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How unit rates work

• Unit rates determines the gross value of the road network in $/m2 (per km).

• Costed WBS schedule items are allocated to relevant asset components such as earth works, pavement and surfacing.

• Total costs of each asset class divided from the area to derive unit rate for the correspondent asset class.

• Stereotypical approach provides robust resource based network replacement cost.

• The brownfield unit rates are to be applied for calculation of Residual Values.

• Bridge unit rates are derived from analysing data from recently completed projects.

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Unit rate stereotypes

CostingRegion

Soil Type

Environment

Terrain

Road stereotype

RenewalWork

schedules

StereotypeUnit Rate

Stereotype Description

0Unformed roads (to differentiate whether it is in a rural or urban road an 'R' or 'U' will be placed in front of the stereotype

Rural Roads

1 Unsealed roads2 Single carriageway <= 6.4m seal width constructed pre 1980

3 Single carriageway <= 6.4m seal width constructed post 19804 Single carriageway > 6.4m seal width constructed pre 19805 Single carriageway > 6.4m seal width constructed post 1980

6 Motorway sealed - typically upto 6 lanes7 Major motorway - 6 lanes or more

Urban Roads

8 Undivided carriageway less than 4 lanes

9 Undivided carriageway 4 lanes or more10 Divided carriageway 4 lanes or more non-motorway standard11 Motorway 4 to 6 lanes

12 Major motorway - 6 lanes or more

13 Busway

• Level

• Rolling

• Mountainous

• Wet (W)

• Dry (D)

• Central Coast (CC)

• Central Inland (CI)

• Southern Inland (SI)

• Southeast Qld (SQ)

• Tropical North (TN)

Stereotype example

1LDR-CC‘1’ = indicates that it is in rural area and is an

unsealed road‘L’ = in a level terrain‘D’ = in a dry environment‘R’ = soil is reactive‘CC’ = in Central Coast Region

• Resealing/Resurfacing

• Pavement Rehabilitation

• Road Reconstruction

• Complete New Road

• Reactive (R)

• Non-Reactive (NR)

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Stereotype road lengths

Stereotype ID Stereotype Code Total Segment Length Asset Owner

0 1

1 R01 4,285 TMR

2 R02 3,640 MR

3 R03 3,910 MR

4 R04 2,978 MR

5 R05 16,965 MR

6 R06 725 MR

7 R07 14 MR

7 R06 16 MR

8 U08 387 MR

9 U09 30 MR

10 U10 919 MR

11 U11 341 MR

12 U10 83 MR

12 U12 172 MR

13 U13 28 BUSWAY

Total 34494

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SmartCost regions

Central Inland (CI)

Southern Inland (SI)

Central Coast (CC)

South East Queensland

(SQ)

Tropical North (TN)

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Work Breakdown Structure (WBS)

Item Description Unit Quantity Unit Rate Amount Category

1001PRELIMINARY WORKS

1100CONTRACTOR'S SITE FACILITIES AND CAMP MRS28

1101site facilities Lsum 1.000 304,581.00 304,581 MISC

1002PROVISION FOR TRAFFIC MRS02

1200TRAFFIC MANAGEMENT MRS02

1201Provision for traffic (% of construction cost) LS 7.000 683,730.40 4,786,113 MISC

1003ENVIRONMENTAL MANAGEMENT MRS51

1311Provision for environmental management and planning (% of construction cost) LS 2.500 683,730.00 1,709,325 MISC

2001 DRAINAGE, RETAINING STRUCTURES AND PROTECTIVE TREATMENTS MRS03

2100 REMOVAL/DEMOLITION MRS03

2101 Removal or demolition of culverts, complete, 600ø, 300meters Lsum 1.000 18,842.00 18,842 Earth Works

2106 Removal or demolition of concrete kerb and channel including kerb crossings Item 1.000 18,636.00 18,636 Earth Works

2107 Removal or demolition of concrete slabs, 150mm Thickness Item 1.000 19,147.00 19,147 Earth Works

2108 Removal or demolition of gullies, >1.5m depth - <3m depth Item 1.000 19,719.00 19,719 Earth Works

2240SUPPLY AND INSTALLATION OF CULVERTS MRS03

2241.1Supply and installation of concrete pipe culvert components, Class 2, 450mm diameter -Green fields

m 4,987.200 364.64 1,818,533 Earth Works

2241.2Supply and installation of concrete pipe culvert components, Class 2, 525mm diameter -Green fields

m 3,410.400 412.18 1,405,699 Earth Works

2241.3Supply and installation of concrete pipe culvert components, Class 2, 600mm diameter -Green fields

m 1,020.000 500.82 510,836 Earth Works

2241.4Supply and installation of concrete pipe culvert components, Class 2, 750mm diameter -Green fields

m 26.400 721.58 19,050 Earth Works

2243.1 Supply and installation of concrete box culvert components, 1500mm x 1200mmm 100.800 1,942.00 195,754 Earth Works

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Expert Estimation

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Validation of unit rates data

• Have a consistent WBS at multiple levels

• Stereotypes WBS align with current Transport and Main Roads’

specifications.

• Benchmarking with recent tender prices and completed projects.

• Expert panel with internal asset managers, engineers and regional

estimators validate final unit rates.

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Example unit rates

Unit rates for 2014 (S/m2)

WBS Earthworks Pavement Asphalt Surfacing10LWNR_CC 147.79 336.45 79.21

10LWNR_SI 148.63 338.11 79.46

10LWNR_SQ 144.54 328.59 77.47

10LWNR_TN 149.49 340.22 80.09

10LWR_CC 147.79 336.45 79.21

10LWR_SI 148.63 338.11 79.46

10LWR_SQ 144.54 328.59 77.47

10MWNR_SI 283.93 410.99 77.37

11LWNR_CC $460.91 $502.83 $92.44

11LWNR_SI $463.53 $505.31 $92.73

11LWNR_SQ $451.01 $491.67 $90.52

11LWNR_TN $466.12 $508.29 $93.51

11LWR_SQ $450.02 $491.79 $90.48

11MWNR_SI $980.30 $672.29 $101.16

11MWNR_SQ $953.33 $653.36 $98.63

11RWNR_SI $669.28 $637.02 $103.57

11RWNR_SQ $650.87 $619.08 $100.98

11RWR_SQ $649.44 $619.23 $100.93

• Costed WBS schedule items are allocated to relevant asset components such as earth works, pavement and surfacing.

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Bridge unit rates (from completed projects)

Type Construction CodeUnit Rate ($/m2) 2014/15

financial year

Standard Bridges

Box Girder $8,397

Girder/Beam $4,304

Deck Unit $5,920

Tunnels

Cut and Cover $10,945

Driven / Bored $12,022

Major Culverts All $3,940

Riverside Expressway Bridges All $15,431

Houghton Highway Girder/Beam - Houghton $6,299

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Summary

The benefits of developing stereotype unit rates in this manner:

• Provides robust resource-based estimates.

• Provides transparency in the method of costing development.

• Closer alignment with the department’s internal project estimating

processes.

• Data files can be reused.

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Thank you