APPENDIX A. EMAS COST ASSUMPTIONS
3/15/04 5200.9 APPENDIX A. EMAS COST ASSUMPTIONS The evaluation process uses EMAS as a benchmark for comparison purposes. The EMAS life cycle cost determines when other non-EMAS improvements are, in fact, the best alternative for improving the RSA. EMAS cost is also a key factor for determining when the cost of any RSA improvement is no longer financially feasible.
Financial feasibility costs are based on the cost to install an EMAS bed for the design aircraft.
This guidance uses a cost model that applies unit costs for site preparation and for the EMAS bed. The unit costs are derived from the average of four actual installations. For example, Figure A1 shows a typical EMAS installation. Site preparation costs normally consist of: • Removal of existing surface material • Installation of an aggregate base material • Installation of an asphalt surface course • An appropriate share of the contract mobilization and demobilization costs • An appropriate share of engineering and inspection costs Unit costs for site preparation are calculated by dividing the sum of all site preparation costs by the total area of the site preparation. Note that site preparation includes the entire setback beginning at the end of the runway and extending all the way to the far end of the EMAS bed.
Figure A1. Typical EMAS Installation Detail Site preparation 10 ft.
EMAS Bed 75 ft or more 175 ft to 575 ft Page 17 5200.9 3/15/04 EMAS costs include the EMAS bedding material, installation, and surface coating and marking.
Contract bids usually include these costs as a lump sum figure. Unit costs are calculated by dividing the area of the EMAS bed (runway width times EMAS bed length). Mobilization, demobilization, engineering, and inspection costs are not included because they are normally already factored into the EMAS material and installation costs.
This guidance uses average unit costs based on four actual EMAS installations as follows: • Site Preparation............................$14.00/SF • EMAS Bed Installation ................$78.00/SF Using these two unit cost figures, it is easy to estimate a generic EMAS installation given the EMAS bed setback, the EMAS bed length, and the runway width. At the present time, Figure 4 (Maximum Feasible Cost for RSA Improvement) is based on a factor of three times the site preparation and installation costs for one generic EMAS bed installation for the design aircraft*.
For example, if the runway width is 100 feet and the required EMAS bed length is 400 feet, the generic EMAS cost is: • Site preparation: 100 x (400+75) x 14 = $665,000 • EMAS bed installation: 100 x 400 x 78 = $3,120,000 • Total generic EMAS cost: $3,785,000 • Maximum feasible cost for improving the RSA: $3,785,000 x 3* = $11,355,000 (see Figure 4) * This factor will change as necessary to support RSA program goals and available funding.
Note that these estimates are rough because they include an average amount of miscellaneous site work such as utility relocation and lighting. However, they can be used to develop an estimate for the standard EMAS alternative life cycle cost calculation. Use this approach to quickly estimate EMAS costs before deciding whether to proceed with a detailed design and cost analysis.
Site preparation and EMAS unit costs will be updated annually and as cost information from actual installations is received. Figure 4 will be updated and distributed accordingly. Regional Division Managers may also want to develop their own cost model based on actual EMAS installations in their region. Region-specific cost information could be used to develop an individual Figure 4 for each region.
The guidance pertaining to maintenance costs will also be adjusted as we obtain more specific information on the actual costs involved. At the present time, we believe maintenance will be about $1 per square foot every three years. Specific costs for periodic inspections are not available at this time. Regions may also want to track and use their own maintenance figures for EMAS. However, be careful not to grossly over estimate maintenance costs. We recommend that regions obtain an inspection and maintenance proposal directly from the EMAS manufacturer before using significantly higher maintenance cost estimates.
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APPENDIX B. LIFE CYCLE COSTS
3/15/04 5200.9 APPENDIX B. LIFE CYCLE COSTS Use life cycle costs to compare EMAS with non-EMAS alternatives. Life cycle costs account for periodic inspections, maintenance, and replacement of the EMAS bed material. Life cycle costs should be calculated using present value analysis and real dollars.
Use a discount rate of 7% to calculate the time value of money. The FAA Airport Benefit-Cost Analysis Guidance recommends the use of constant dollar cash streams that exclude the affects of inflation. This net-of-inflation rate is called the real discount rate. The Office of Management and Budget (OMB) of the Executive Office of the President of the United States specifies appropriate real discount rates for investments of Federal funds in Circular No. A-94 (October 29, 1992). The real discount rate relevant for all airport projects to be funded with Federal grant funds is 7 percent.
Use a life cycle of 20 years and assume that the EMAS material will be replaced after 10 years.
Figure B1 presents the cash flow diagrams for EMAS and standard RSA construction. Year 0 for each analysis is the year that the airport attains beneficial usage of the improvement.
Calculate the present value for year 0. Sometimes, the completion year for standard RSA option may not be the same as the EMAS solution. Consider this difference, if any, separately along with other factors (see Paragraph 12). Refer the FAA Airport Benefit-Cost Analysis Guidance at http://api.hq.faa.gov/cost_ben/faabca.pdf for more information on life cycle cost analysis.
The present value of the life cycle costs of the EMAS solution ( P ) is the sum of: life a. The present value of the EMAS installation ( P ).
emas This is simply the cost of the contract(s) to install the standard EMAS b. The present value of the EMAS replacement after 10 years ( P ).
repl Calculate P using the following formula: repl n P = F /(1+ i ) where, P is the present value repl F is the future replacement costs (in current dollars) i is the discount rate or 7% n is the number of interest periods or 10 c. The present value of the annual maintenance and inspection costs for 9 years . ( P ) m9 Maintenance and inspection are not needed for year 10 because the EMAS will be replaced in year 10. Calculate P using the following formula: m9 n n P = A [((1+ i ) -1)/( i (1+ i ) )] where: m9 P is the present value of maintenance and inspection for 9 years m9 A is the annual recurring maintenance and inspection costs (this value does not change) i is the discount rate or 7% Page 19 5200.9 3/15/04 n is the number of periods or 9 d. The present value of the annual maintenance and inspection costs for years 11 through 19 ( P ).
m19 Maintenance is not required for year 20 because that is the end of the life cycle. Calculate P using the following formula: m19 n P = P /(1+ i ) , where: m19 m9 P is the present value of maintenance and inspection for years 11-19 m19 P is the present value of maintenance and inspection for 9 years m9 i is the discount rate or 7% n is the number of periods or 10 [finding the present value of cost 10 years in future] Calculation Example Assume the following costs: EMAS installation = $5,000,000 EMAS replacement = $2,000,000 Annual inspection and maintenance = $20,000 P = $5,000,000 emas P = 2,000,000/(1+0.07) = 1,017,000 repl 9 9 P = 20,000((1+0.07) -1)/(.07(1+.07) ) = 130,300 m9 P = 130,300/(1+0.07) = 66,200 m19 P = $6,213,500 life Page 20 3/15/04 5200.9 Figure B1. Life Cycle Cash Flow Year 0 5 10 15 20 EMAS replacement Annual maintenance & inspection costs EMAS installation Standard EMAS EMAS RSA Year 0 5 10 15 20 RSA construction Standard RSA Page 21