The Implementation of Engineering Economy in the Transport Development – A Case Study of Road Transport


By Winner Yousman



The engineering economy is a part of skill and knowledge of cost engineering could be applied in many cases of projects in terms of the application of cost and benefit analysis. The purposes of this technical paper is to clearly explain how this particular knowledge is applied into real case transport development project especially land transportation – road transport. The transport development in some cases is related to the regional development which requires for coming up with the particular project that should be adopted either to maximize the benefit or to minimize the cost to the community. The net present value (NPV) and benefit cost ratio (BCR) are two indicators which are commonly used in this evaluation, and this evaluation integrates the engineering economy knowledge with technical transportation analysis. In the end, the result would provide the analysis and what potential solution could be taken into account for the identified issue.

Keywords: Transport development, Net present value, Benefit cost ratio, Evaluation.

  1. 1.  Introduction

The transportation is one of key factors of the economic growth in every country in the world. Powell (2001,p.200) said that the transport highly affects the modern economy, and the movement of resources and goods at different stages of the production process is the prime focus of good transport. This is the most important reason why each country always continually improves their transportation systems and infrastructures to obtain the optimum result for their economy. This is illustrated by building a particular highway which connects the country side to a city that it could provide the trade and the growth of country side. This is because the business person in a particular city or region could transport their commodities to be sold to other city or region and vice versa.

There are three main types of transport systems which are land transport such as roads and railways, waterways transports, and air transports. This technical paper focuses on land transport especially road transport. Generally, there are two parties who directly deal with the road transport issue which are the road agency and the road user. The road agency is the group of transport providers such as government and companies who are being partner of the government, the road users are parties who use the roads such private car owner, buses owner, freight companies, etc.There are many alternative solutions which could be attempted by the transport agency to tackle transport problems that each of them would come up with the benefit and the cost. Maximizing the benefit and/or minimizing the cost are two primary goals of road agencies and road users to deal with transportation issues and their solutions.


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About the Author

winner-yousmanflag-indonesiaWinner Yousman

Winner Yousman, MScCM, CCT, CCC is a construction project management practitioner, with 5 years of experience in project management area such project engineer, project control, civil construction planner, site quantity surveyor, budget and cost control in construction projects for infrastructure project, water resources project, engineering management and consultancy services. He has worked for both private and public construction and consultant companies in Indonesia until he continued his post graduate study of construction management to Australia. He worked for civil engineering and construction contractors, project management consultant and an EPCC contractor. His career covered any relevant roles and responsibilities from field to management works. Winner is contactable at [email protected].