2020 - Netherlands - Review of Life Cycle Cost Methodologies

Life cycle cost analysis (LCCA) has received notable attention and application within the road industry. As one of the three pillars in sustainability assessment, LCCA offers an empirical framework to assess costs over the entire lifespan of road projects. To incorporate the agency and user cost for all different life cycle phases, a robust framework is needed. Thus, it is vital to gain insight into the application and limitations of LCCA in road projects. Reviewing the existing economic models and frameworks, with a particular focus on road projects, will be the first step in providing a robust and uniform model. The goal of this paper is to provide a state-of-the-art review of existing methodologies in the wider field of LCCA for road projects. Hence, it can highlight critical processes and identify hotspots so the robustness of LCCA frameworks can be increased. It is concluded that agency costs related to the end of life (EOL) phase, transport and road user costs are often excluded despite having a substantial impact. However, with sustainability in mind, these aspects are important and should always be incorporated. Modelling the EOL enables the user to include the effect of recycling, hence, lowering the economic impact of raw material extraction. Additionally, road user costs are closely related to the social aspect of sustainability assessment. Finally, this paper presents the inconsistent use of modelling parameters, e.g. discount rate and analysis period, which supports the conclusion of a missing conclusive and robust framework.