Transportation Asset Valuation: Pre-, Peri- and Post-Fourth Industrial Revolution

Abstract

A critical component of transportation asset management, asset valuation has been applied historically largely to provide condition-based value assessments of transportation infrastructure. There are emerging opportunities for innovations in asset valuation methodology with applications in the MAP-21/FAST performance-based era, and the Fourth Industrial Revolution (4IR). Opportunities exist to incorporate a wider range of value factors to capture multiple objectives in planning, design, and rehabilitation, such as safety, mobility, economic advancement, resilience, sustainability, and equity, to reflect the growing importance of intangible assets, as well as consider more explicitly value-adding technologies in this era of smarter infrastructure and rapid technological change. The paper first examines existing methods in transportation asset valuation practice and trends in asset valuation thinking through a literature review on asset valuation methodology with transportation applications. It then outlines innovation pathways and future research directions in asset valuation that can enhance existing capabilities to capture an expanding notion of transportation infrastructure value in the 21st century. For transportation professionals with continuing interest in valuation approaches to enhance asset management, this paper offers a catalog for identifying appropriate valuation approaches. For researchers and practitioners interested in pursuing innovations to secure increasingly smart, effective, and efficient transportation systems, the paper outlines innovation pathways and research directions enabled by growing computing power and data collection capabilities in the 4IR.

Integrating Economic and Utility Concepts for a Comprehensive Bridge Valuation Model

“…A software package, Multi-Objective Optimization System (MOOS), was programmed to facilitate implementation of the methodologies, incorporating the concepts of value and utility theory to account for inherent risk and uncertainty associated with the decision parameters ( 19 ). Amekudzi conducted a comprehensive literature review of different valuation approaches in asset management and identified emerging opportunities for innovations in asset valuation methodologies ( 20 ). In 2016, FHWA released a report to provide guidance and describe potential challenges in incorporating asset valuation into asset management financial plans by comparing U.S. practice to that in other countries ( 7 ).…”

Asset Valuation Model for Highway Rigid Pavements Applicable in Public–Private Partnerships Projects

“…Infrastructures 2023, 8, 118 2 of 12 can be adjusted using either the "Depreciation" or "Modified" approach [3,11,12]. The former adjusts the cost according to a linear or curvilinear function predefined for the asset's service life, while the latter adjusts it based on the asset's current condition.…”

“…These methods are widely utilized by transportation agencies at the local and state levels worldwide to fulfill management and financial requirements [1,2]. The "Modified" approach is particularly advantageous for management purposes as it considers the asset's condition during valuation [3,11,12]. Examples of specific methods within this approach are the Net Salvage Value (NSV), Written-Down Replacement Cost (WDRC) and Adjusted Value with Respect to Condition Threshold (AVRCT) [11].…”

“…However, in the case of Portland Cement Concrete (PCC) pavements, also known as rigid pavements, a model with such characteristics has not yet been developed. In fact, most of the studies found in the available literature include valuation models for pavements at the network level, without differentiating between rigid and flexible pavements [1,3,11,[21][22][23]. On the other hand, rigid pavements can comprise up to 25% of the lane length in interurban highway concessions in Chile [16,17].…”

Performance Dashboard Tool to Visualize Adaptive Resilience Maturity of Transportation Agencies

“…In the US transportation system, federal funding is generally distributed based on the overall asset valuation of the state/regional agency ( 10 ). The valuation framework currently being followed only looks at the condition-based value of the asset ( 11 ). This undervalues the assets with adaptive capacity and favors investment in non-adaptive assets to avoid added costs.…”