ABSTRACT

This manual presents the Roads Economic Decision Model (RED) developed to improve the
decision-making process for the development and maintenance of low-volume rural roads. The
model performs an economic evaluation of road investments options using the consumer sur-
plus approach and is customized to the characteristics and needs of low-volume roads such as
the high uncertainty of the assessment of the model inputs, particularly the traffic and condi-
tion of unpaved roads, the importance of vehicle speeds for model validation, the need for a
comprehensive analysis of generated and induced traffic, and the need to clearly define all ac-
crued benefits. RED computes benefits for normal, generated, induced, and diverted traffic, and
takes into account changes in road length, condition, geometry, type, accidents, and days per
year when the passage of vehicles is further disrupted by a highly deteriorated road condition
(wet season). Users can add to the analysis other benefits, such as non-motorized traffic, social
services and environmental impacts, if computed separately. The model is presented on a series
of Excel 2000 workbooks that collect all user inputs, present the results on an efficient manner
and performs sensitivity, switching values and risk analyses.

ACKNOWLEDGMENTS

The RED model was funded by the Road Management Initiative (RMI), a key component of the
Sub-Saharan Africa Transport Policy Program (SSATP), which is a collaborative framework set
up to improve transport policies and strengthen institutional capacity in the Africa region. For
information regarding RMI, contact Stephen Brushett, RMI Manager, World Bank,
(sbrushett@worldbank.org). The model development supervisor was Pedro Geraldes, Principal
Transport Economist, World Bank, and the author is Rodrigo Archondo-Callao
(rarchondocallao@worldbank.org), Technical Specialist, World Bank, Transport and Urban
Development Department. Any views expressed in this paper are those of the author and not
necessarily of the sponsors.

DISCLAIMER

The World Bank and SSATP make no warranty in terms of correctness, accuracy, currentness,
reliability or otherwise regarding the model. The user relies on the products of the software
and the results solely at his or her own risk. In no event will the World Bank or anyone else
who has been involved in the creation of this product be liable for its application or misapplica-
tion in the field. The World Bank Reserves the right to make revisions and changes from time
to time without obligation to notify any person of such revisions and changes.