A thesis submitted in partial fulfilment of the requirements for the degree of Master of Engineering, School of Engineering and Technology

Thesis (M. Eng.) - Asian Institute of Technology, 1981

The study deals with determining a program for road construction projects and selecting among various alternatives under budget constraint. The study aimed to show which oþ the existing methods is more reliable and efficient and Suggested approaches to priority ranking of projects. Four methods: ( 1) internal rate of return; (2) net present value; (3) incremental benefit/cost ratio; and (4 ) net present value/investment ratio were considered. In addition, the problem was expressed in mathematical form and an optimization program was applied. Comparisons were made primarily on the basis of maximum return on invested capital as measured by the net present value, and on the optimization technique. Secondary comparisons were made on the basis of total investment, the total number of projects included, and the total kilometers of road to be constructed. Different levels of capital investment were tried to determine any changes in the findings. The results indicated that optimization model would generally provide the greatest return for any amount of capital expenditure. The question of whether second best, third best or worse alternatives would have a chance of inclusion in the optimum highway improvement program was also investigated.