Incorporating Environmental Factors into a Highway Maintenance Cost Model

Abstract

As infrastructure ages, the maintenance cost of highways is becoming a major international concern that hitherto has been overlooked by public sector researchers. This paper begins to fill this gap by focusing on the nature and extent of the impact of environmental cost drivers on costs of highway maintenance. By linking a cost driver framework with engineering theory, and using Geographic Information Systems methodology, it has been possible to demonstrate that the physical geological environment has a significant effect on the cost of highway maintenance activity.

In addition to advancing highway maintenance cost behaviour understanding, the research illustrates that to gain new insights, researchers must be prepared to base causality enquiries on theoretical foundations advanced by other disciplines and to work with data an d methods of analysis which are appropriate to each situation.

From a strategic cost management perspective, this study evaluates environmental factors in importance as major drivers of cost and in particular, highlights their related interaction with management strategy and policy. The paper discusses aspects of the cost driver framework and application to planning an control accountability, describes dynamic interrelationships between activity-based costing and activity-based management and suggests directions for further research.

Key Words: Accountability; cost models; Environmental studies; Maintenance; Planning; Control transport

JEL Classification: H11, M40, M46