Framework for investment decision-making under risk and uncertainty for infrastructure asset management

A study has been conducted to investigate current practices on decision-making under risk and uncertainty for infrastructure project investments. It was found that many European countries such as the UK, France, Germany including Australia use scenarios for the investigation of the effects of risk and uncertainty of project investments. Different alternative scenarios are mostly considered during the engineering economic cost-benefit analysis stage. For instance, the World Bank requires an analysis of risks in all project appraisals. Risk in economic evaluation needs to be addressed by calculating sensitivity of the rate of return for a number of events. Risks and uncertainties of project developments arise from various sources of errors including data, model and forecasting errors. It was found that the most influential factors affecting risk and uncertainty resulted from forecasting errors. Data errors and model errors have trivial effects. It was argued by many analysts that scenarios do not forecast what will happen but scenarios indicate only what can happen from given alternatives. It was suggested that the probability distributions of end-products of the project appraisal, such as cost-benefit ratios that take forecasting errors into account, are feasible decision tools for economic evaluation. Political, social, environmental as well as economic and other related risk issues have been addressed and included in decision-making frameworks, such as in a multi-criteria decisionmaking framework. But no suggestion has been made on how to incorporate risk into the investment decision-making process.

Incorporating sustainability measures in life-cycle financial decision making for highway construction

Public awareness and the nature of highway construction works demand that sustainability measures are first on the development agenda. However, in the current economic climate, individual volition and enthusiasm for such high capital investments do not present as strong cases for decision making as the financial pictures of pursuing sustainability. Some stakeholders consider sustainability to be extra work that costs additional money. Though, stakeholders realised its importance in infrastructure development. They are keen to identify the available alternatives and financial implications on a lifecycle basis. Highway infrastructure development is a complex rocess which requires expertise and tools to evaluate investment options, such as environmentally sustainable features for road and highway development. Life-cycle cost analysis (LCCA) is a valuable approach for investment decision making for construction works. However, LCCA applications in highway development are still limited. Current models, for example focus on economic issues alone and do not deal with sustainability factors, which are more difficult to quantify and encapsulate in estimation modules. This paper reports the research which identifies sustainability related factors in highway construction projects, in quantitative and qualitative forms of a multi-criteria analysis. These factors are then incorporated into past and proven LCCA models to produce a new long term decision support model. The research via questionnaire, model building, analytical hierarchy processes (AHP) and case studies have identified, evaluated and then processed highway sustainability related cost elements. These cost elements need to be verified by industry before being integrated for further development of the model. Then the Australian construction industry will have a practical tool to evaluate investment decisions which provide an optimum balance between financial viability and sustainability deliverables.

Removal of toxic metals in a multi metal system using sorbents for potential application to urban stormwater treatment

In the context of increasing demand for potable water and the depletion of water resources, stormwater is a logical alternative. However, stormwater contains pollutants, among which metals are of particular interest due to their toxicity and persistence in the environment. Hence, it is imperative to remove toxic metals in stormwater to the levels prescribed by drinking water guidelines for potable use. Consequently, various techniques have been proposed, among which sorption using low cost sorbents is economically viable and environmentally benign in comparison to other techniques. However, sorbents show affinity towards certain toxic metals, which results in poor removal of other toxic metals. It was hypothesised in this study that a mixture of sorbents that have different metal affinity patterns can be used for the efficient removal of a range of toxic metals commonly found in stormwater. The performance of six sorbents in the sorption of Al, Cr, Cu, Pb, Ni, Zn and Cd, which are the toxic metals commonly found in urban stormwater, was investigated to select suitable sorbents for creating the mixtures. For this purpose, a multi criteria analytical protocol was developed using the decision making methods: PROMETHEE (Preference Ranking Organisation METHod for Enrichment Evaluations) and GAIA (Graphical Analysis for Interactive Assistance). Zeolite and seaweed were selected for the creation of trial mixtures based on their metal affinity pattern and the performance on predetermined selection criteria. The metal sorption mechanisms employed by seaweed and zeolite were defined using kinetics, isotherm and thermodynamics parameters, which were determined using the batch sorption experiments. Additionally, the kinetics rate-limiting steps were identified using an innovative approach using GAIA and Spearman correlation techniques developed as part of the study, to overcome the limitation in conventional graphical methods in predicting the degree of contribution of each kinetics step in limiting the overall metal removal rate. The sorption kinetics of zeolite was found to be primarily limited by intraparticle diffusion followed by the sorption reaction steps, which were governed mainly by the hydrated ionic diameter of metals. The isotherm study indicated that the metal sorption mechanism of zeolite was primarily of a physical nature. The thermodynamics study confirmed that the energetically favourable nature of sorption increased in the order of Zn < Cu < Cd < Ni < Pb < Cr < Al, which is in agreement with metal sorption affinity of zeolite. Hence, sorption thermodynamics has an influence on the metal sorption affinity of zeolite. On the other hand, the primary kinetics rate-limiting step of seaweed was the sorption reaction process followed by intraparticle diffusion. The boundary layer diffusion was also found to limit the metal sorption kinetics at low concentration. According to the sorption isotherm study, Cd, Pb, Cr and Al were sorbed by seaweed via ion exchange, whilst sorption of Ni occurred via physisorption. Furthermore, ionic bonding is responsible for the sorption of Zn. The thermodynamics study confirmed that sorption by seaweed was energetically favourable in the order of Zn < Cu < Cd < Cr . Al < Pb < Ni. However, this did not agree with the affinity series derived for seaweed suggesting a limited influence of sorption thermodynamics on metal affinity for seaweed. The investigation of zeolite-seaweed mixtures indicated that mixing sorbents have an effect on the kinetics rates and the sorption affinity. Additionally, the theoretical relationships were derived to predict the boundary layer diffusion rate, intraparticle diffusion rate, the sorption reaction rate and the enthalpy of mixtures based on that of individual sorbents. In general, low coefficient of determination (R2) for the relationships between theoretical and experimental data indicated that the relationships were not statistically significant. This was attributed to the heterogeneity of the properties of sorbents. Nevertheless, in relative terms, the intraparticle diffusion rate, sorption reaction rate and enthalpy of sorption had higher R2 values than the boundary layer diffusion rate suggesting that there was some relationship between the former set of parameters of mixtures and that of sorbents. The mixture, which contained 80% of zeolite and 20% of seaweed, showed similar affinity for the sorption of Cu, Ni, Cd, Cr and Al, which was attributed to approximately similar sorption enthalpy of the metal ions. Therefore, it was concluded that the seaweed-zeolite mixture can be used to obtain the same affinity for various metals present in a multi metal system provided the metal ions have similar enthalpy during sorption by the mixture.

Quantifying economic values of coastal and marine ecosystem services and assessing their use in decision-making : applications in New Caledonia and Australia

This thesis deals with the issues of quantifying economic values of coastal and marine ecosystem services and assessing their use in decision-making. The first analytical part of the thesis focuses on estimating non-market use and non-use values, with an application in New-Caledonia using Discrete Choice Experiment. The second part examines how and to what extent the economic valuation of ecosystem services is used in coastal management decision-making with an application in Australia. Using a multi-criteria analysis, the relative importance of ecological, social and economic evaluation criteria is also assessed in the context of coastal development.

Modeling multi-stakeholder multi-objective decisions during public participation in major infrastructure and construction projects: A decision rule approach

Major infrastructure and construction (MIC) projects are those with significant traffic or environmental impact, of strategic and regional significance and high sensitivity. The decision making process of schemes of this type is becoming ever more complicated, especially with the increasing number of stakeholders involved and their growing tendency to defend their own varied interests. Failing to address and meet the concerns and expectations of stakeholders may result in project failures. To avoid this necessitates a systematic participatory approach to facilitate decision-making. Though numerous decision models have been established in previous studies (e.g. ELECTRE methods, the analytic hierarchy process and analytic network process) their applicability in the decision process during stakeholder participation in contemporary MIC projects is still uncertain. To resolve this, the decision rule approach is employed for modeling multi-stakeholder multi-objective project decisions. Through this, the result is obtained naturally according to the “rules” accepted by any stakeholder involved. In this sense, consensus is more likely to be achieved since the process is more convincing and the result is easier to be accepted by all concerned. Appropriate “rules”, comprehensive enough to address multiple objectives while straightforward enough to be understood by multiple stakeholders, are set for resolving conflict and facilitating consensus during the project decision process. The West Kowloon Cultural District (WKCD) project is used as a demonstration case and a focus group meeting is conducted in order to confirm the validity of the model established. The results indicate that the model is objective, reliable and practical enough to cope with real world problems. Finally, a suggested future research agenda is provided.

Multi-objective four-dimensional vehicle motion planning in large dynamic environments

This paper presents Multi-Step A* (MSA*), a search algorithm based on A* for multi-objective 4D vehicle motion planning (three spatial and one time dimension). The research is principally motivated by the need for offline and online motion planning for autonomous Unmanned Aerial Vehicles (UAVs). For UAVs operating in large, dynamic and uncertain 4D environments, the motion plan consists of a sequence of connected linear tracks (or trajectory segments). The track angle and velocity are important parameters that are often restricted by assumptions and grid geometry in conventional motion planners. Many existing planners also fail to incorporate multiple decision criteria and constraints such as wind, fuel, dynamic obstacles and the rules of the air. It is shown that MSA* finds a cost optimal solution using variable length, angle and velocity trajectory segments. These segments are approximated with a grid based cell sequence that provides an inherent tolerance to uncertainty. Computational efficiency is achieved by using variable successor operators to create a multi-resolution, memory efficient lattice sampling structure. Simulation studies on the UAV flight planning problem show that MSA* meets the time constraints of online replanning and finds paths of equivalent cost but in a quarter of the time (on average) of vector neighbourhood based A*.

Managing financial implications for sustainable highway infrastructure delivery

Highway construction works have significant bearings on all aspects of sustainability. As they typically involve huge capital funds, stakeholders tend to place all interests on the financial justifications of the project, especially when embedding sustainability principles and practices may demand significant initial investment. Increasing public awareness and government policies demand that infrastructure projects respond to environmental challenges and people start to realise the negative consequences of not to pursue sustainability. Stakeholders are now keen to identify sustainable alternatives and financial implications of including them on a whole lifecycle basis. Therefore tools that aid the evaluation of investment options, such as provision of environmentally sustainable features in roads and highways, are highly desirable. Life-cycle cost analysis (LCCA) is generally recognised as a valuable approach for investment decision making for construction works. However to date it has limited application because the current LCCA models tend to focus on economic issues alone and are not able to deal with sustainability factors. This paper reports a research on identifying sustainability related factors in highway construction projects, in quantitative and qualitative forms of a multi-criteria analysis. These factors are then incorporated into existing LCCA models to produce a new sustainability based LCCA model with cost elements specific to sustainability measures. This presents highway project stakeholders a practical tool to evaluate investment decisions and reach an optimum balance between financial viability and sustainability deliverables.

Coordinated probabilistic optimal decision-making model for multi-area ATC with risk control

In the decision-making of multi-area ATC (Available Transfer Capacity) in electricity market environment, the existing resources of transmission network should be optimally dispatched and coordinately employed on the premise that the secure system operation is maintained and risk associated is controllable. The non-sequential Monte Carlo simulation is used to determine the ATC probability density distribution of specified areas under the influence of several uncertainty factors, based on which, a coordinated probabilistic optimal decision-making model with the maximal risk benefit as its objective is developed for multi-area ATC. The NSGA-II is applied to calculate the ATC of each area, which considers the risk cost caused by relevant uncertainty factors and the synchronous coordination among areas. The essential characteristics of the developed model and the employed algorithm are illustrated by the example of IEEE 118-bus test system. Simulative result shows that, the risk of multi-area ATC decision-making is influenced by the uncertainties in power system operation and the relative importance degrees of different areas.

Client and consultant perspectives of prequalification criteria

A crucial task in contractor prequalification is to establish a set of decision criteria through which the capabilities of contractors are measured and judged. However, in the UK, there are no nationwide standards or guidelines governing the selection of decision criteria for contractor prequalification. The decision criteria are usually established by individual clients on an ad hoc basis. This paper investigates the divergence of decision criteria used by different client and consultant organisations in contractor prequalification through a large empirical survey conducted in the UK. The results indicate that there are significant differences in the selection and use of decision criteria for prequalification.

Multiple criteria-based real-time decision making by autonomous city vehicles

This paper addresses the topic of real-time decision making for autonomous city vehicles, i.e. the autonomous vehicles’ ability to make appropriate driving decisions in city road traffic situations. After decomposing the problem into two consecutive decision making stages, and giving a short overview about previous work, the paper explains how Multiple Criteria Decision Making (MCDM) can be used in the process of selecting the most appropriate driving maneuver.

Sustainability in infrastructure investment : building the business case

Many infrastructure agencies adopt sustainability objectives at a corporate level and incorporate sustainability targets and indicators as part of corporate reporting processes. These objectives are expected to translate to all stages of the project delivery process, including project selection. For infrastructure capital works projects and programs, a robust project management approach involves the development of a business case to guide investment decision making. A key tool in the assessment of project options and selection of a delivery strategy is Cost Benefit Analysis (CBA). Infrastructure providers are required to undertake cost benefit analysis to support project selection through regulatory approval and budgetary processes. This tool has emerged through the prism of economic analysis rather than sustainability. A literature review reveals the limitations of CBA alone to effectively evaluate economic, environmental and social externalities or impacts that apply over a long time frame, and that are ultimately irreversible. Multi-Criteria Analysis (MCA) has been introduced as a means to incorporate a wider array of factors into decision making such as sustainability. This, however, presents new challenges with issues around how to transparently represent wider community values in the selection of a preferred solution. Are these tools effective in assessing the wider sustainability costs and benefits taking into account that these are public works with long life spans and significant impacts across institutional boundaries? The research indicates a need to develop clear guidelines for investment decision making in order to better align with corporate sustainability objectives. Findings from the literature review indicate that a more sustainable approach to investment decision-making framework should include: the incorporation of sustainability goals from corporate planning documents; problem definition and option generation using best practice investment management guidelines; improved guidelines for Business Case development using a combination of both Cost Benefit Analysis and Multi-Criteria Analysis; and an integrated public participation process.

Infrastructure, investment and development evaluation: A Complex Stakeholder Perception Mapping approach for improving local and regional economic development outcomes

Partial evaluation of infrastructure investments have resulted in expensive mistakes, unsatisfactory outcomes and increased uncertainties for too many stakeholders, communities and economies in both developing and developed nations. "Complex Stakeholder Perception Mapping" (CSPM), is a novel approach that can address existing limitations by inclusively framing, capturing and mapping the spectrum of insights and perceptions using extended Geographic Information Systems. Maps generated in CSPM offer presentations of flexibly combined, complex perceptions of stakeholders on multiple aspects of development. CSPM extends the applications of GIS software in non-spatial mapping and of Multi-Criteria Analysis with a multidimensional evaluation platform and augments decision science capabilities in addressing complexities. Application of CSPM can improve local and regional economic gains from infrastructure projects and aid any multi-objective and multi-stakeholder decision situations.

A decision support framework for prioritization of engineering asset management activities under uncertainty

Engineers and asset managers must often make decisions on how to best allocate limited resources amongst different interrelated activities, including repair, renewal, inspection, and procurement of new assets. The presence of project interdependencies and the lack of sufficient information on the true value of an activity often produce complex problems and leave the decision maker guessing about the quality and robustness of their decision. In this paper, a decision support framework for uncertain interrelated activities is presented. The framework employs a methodology for multi-criteria ranking in the presence of uncertainty, detailing the effect that uncertain valuations may have on the priority of a particular activity. The framework employs employing semi-quantitative risk measures that can be tailored to an organisation and enable a transparent and simple-to-use uncertainty specification by the decision maker. The framework is then demonstrated on a real world project set from a major Australian utility provider.

Damage assessment in multiple-girder composite bridge using vibration characteristics

This paper uses dynamic computer simulation techniques to apply a procedure using vibration-based methods for damage assessment in multiple-girder composite bridge. In addition to changes in natural frequencies, this multi-criteria procedure incorporates two methods, namely the modal flexibility and the modal strain energy method. Using the numerically simulated modal data obtained through finite element analysis software, algorithms based on modal flexibility and modal strain energy change before and after damage are obtained and used as the indices for the assessment of structural health state. The feasibility and capability of the approach is demonstrated through numerical studies of proposed structure with six damage scenarios. It is concluded that the modal strain energy method is competent for application on multiple-girder composite bridge, as evidenced through the example treated in this paper.

Infrastructure Sustainability : Damage Assessment in Multiple-Girder Composite Bridges Using Vibration Characteristics

Assessing the structural health state of urban infrastructure is crucial in terms of infrastructure sustainability. This chapter uses dynamic computer simulation techniques to apply a procedure using vibration-based methods for damage assessment in multiple-girder composite bridges. In addition to changes in natural frequencies, this multi-criteria procedure incorporates two methods, namely, the modal flexibility and the modal strain energy method. Using the numerically simulated modal data obtained through finite element analysis software, algorithms based on modal flexibility and modal strain energy change, before and after damage, are obtained and used as the indices for the assessment of structural health state. The feasibility and capability of the approach is demonstrated through numerical studies of a proposed structure with six damage scenarios. It is concluded that the modal strain energy method is capable of application to multiple-girder composite bridges, as evidenced through the example treated in this chapter.