ABSTRACT
This chapter illustrates a cost model as a basis for costing and comparing the various road-building and repair or rehabilitation options. As an introduction to cost-estimation for haul road construction, the approach used is to firstly determine the main types of equipment used and then the number of operating hours required from each item of equipment to complete its specified construction task. There are two specific operations in the accounting analysis, namely an economic analysis to justify projects and project alternatives, and financial analysis to determine the budget and cost of a project. The most widely used technique for economic evaluation of alternatives is cost-benefit analysis. The costs include taxes for private entities, whereas road projects for government would exclude taxes as the government is the recipient of taxes and it would result in double counting. Design and construction costs for the majority of haul roads represent only a small proportion of the total operating and road maintenance costs.
