Techniques for Assessing the Benefit-Cost Ratio and Net Present Value of Kaligunting-Bajulan Road Improvements in Madiun Regency

Pepiet Elyswisnoto; Budi Witjaksana; Hanie Teki Tjendanie

doi:10.55927/fjst.v4i12.355

Authors

Pepiet Elyswisnoto Universitas 17 Agustus 1945 Surabaya
Budi Witjaksana Universitas 17 Agustus 1945 Surabaya
Hanie Teki Tjendanie Universitas 17 Agustus 1945 Surabaya

DOI:

https://doi.org/10.55927/fjst.v4i12.355

Keywords:

Benefit-Cost Ratio, Net Present Value, Cost–Benefit Analysis, Road Infrastructure Improvement, Investment Feasibility, Transportation Infrastructure

Abstract

Only about 22% of the 4,975 km of the Kaligunting-Bajulan road stretch in Madiun Regency was considered to be in acceptable condition prior to the upgrading. The evaluation process used cost-benefit evaluations using Net Present Value (NPV) and Benefit Cost Ratio (BCR). Road conditions, routine maintenance costs, and vehicle operating costs (VOC) were assessed both before and after the intervention. By reducing routine maintenance expenses by about 80%, this innovation reduced vehicle operating costs by around Rp787 million annually and saved approximately Rp3.34 billion annually. The economic evaluation's NPV of Rp25.09 billion and BCR of 3.31 show that the project is very economically viable because the benefits far outweigh the costs.

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