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MIT Civil Engineering 1.011 -- Project Evaluation Spring Term 2003Carl D. Martland Page 11.011 Project EvaluationCarl D. MartlandExample of the Ability of Civil Engineering Projects to Shape Cities and Channel Development:Roads, Canals, and Railroads in the Early 19th CenturyTransport Options, Early 19th CenturyRough Road$1-2,000/mile toconstruct1 ton/wagon12 miles/day12 tm/day/vehicle$0.20 to $0.40/tm forfreight ratesTurnpike$5-10,000/mile1.5 tons/wagon18 miles/day27 tm/d/v$0.15 to $0.20/tmCanal>$20,000/mile10-100 tons/boat20-30 miles/day200-3000 tm/d/v$0.05/tmRailroad$15-50,000/mile500 tons/train200 miles/day100,000 tm/d/v<$0.05/tmWhy Build Canals?Water is the most economical & efficient way to transport bulky, non-perishable goodsBUT - you need the waterway!High volume of goods so long as speed is not a great factorCanals are built so thatFreight rates declineFood can be delivered to citiesCities can become trade centersChina's Grand CanalGeography: N-S canal links major riversGeopolitics: transport improvements help unit the empireBenefitsSteady supply of grain from south to north 300,000 tons of grain per year in 7th centuryCosts:5.5 million laborers worked 6 years on one 1,500 mile stretch (20 man-years per mile) Bridgewater CanalBuilt in 1761 to link Manchester England with coal minesBenefits:Halved the price of coal in Manchester (a direct benefit of increased efficiency of transport)Helped Manchester become England's leading industrial center (development benefit for the region)Stimulation of infrastructure developmentBy 1840s, Britain had a network of 5,000 miles of canals & navigable riversTechnological improvements: straighter, deeper, wider canals; aqueducts to cross rivers Background on CanalsCapacity:Gross tonnage/boat equals water displaced, so width and depth are keySpace is needed for two boats to passIf canal is straight, rafts or barges can be linkedTow PathTow Pat hMIT Civil Engineering 1.011 -- Project Evaluation Spring Term 2003Carl D. Martland Page 2Excavation Costs Increase With the Size of the Canal Doubling the width and depth of the canal can lead to major increases in excavationLocks Reduce Excavation, But Reduce Speed & CapacityLocksAvoided ExcavationWater Supply is Essential for Operating a Canal with Locks Water SupplyVerticle AlignmentHorizontal AlignmentPotowmack Canal 1785-1802First extensive system of river navigation in USGeorge Washington was the "champion"$750,000 investmentPurposeOpen up the area west of Appalachia and linking to the Potomac River (current-day Washington DC)Cut freight cost in half (relative to wagon)185 miles in 3 days with a 16-20 ton payloadProblemsConstruction: shaky economy; lack of skilled workers, weatherOperation: only navigable 3 mo/yr; sediments; wooden locks decayedResultsSpurred canal investment & development of west$175,000 in debt by 1816Middlesex Canal 1793-1803Purpose: Improve efficiency of existing system by providing a better link from NH to Boston (chartered by Massachusetts)Reduced transfer from barge to wagon for delivery to Boston (cut costs by 75%)Costs50 bridges, 8 aqueducts, 27 locks$528,000 investment = $20,000/mile = 3% of assessed value of Boston (an early Big Dig!)Problems1-way freight - and not much of itDisruption of trade (Portsmouth & NH did not like this!)Erie Canal, 1817-1825First proposed in 1724; discussed widely in late 1700s and early 1800sThomas Jefferson: "A splendid project - for the 20th century."PurposeEasiest way to cross Appalachian MountainsConstructed 363 miles of canal with 83 locks and 18 major aqueducts from Albany to Buffalo for $8 millionIssuesHow to financeWhich route (avoid Lake Ontario - too close to the British!)Merchants using ground transport were against it Lack of engineers - in fact this project created CE schools at RPI and Union CollegeMIT Civil Engineering 1.011 -- Project Evaluation Spring Term 2003Carl D. Martland Page 3Erie Canal - ResultsProblems1000 died from malariaWhat depth: enough for freight, but no more than they could financeResultsToo many boats almost from day 1 - increased in 1835 to 70 ft wide with 7 ft depth (from 40 and 4)Revenues exceeded all expectationsOpening up Lake Erie was "decisive impetus for commerce to move E-W rather than N-SPopulation growth - Rochester and Buffalo became boom towns Morris Canal 1824-31Purpose: link coal fields of Lehigh Valley with NYCCost was $2.1 million vs. $1 million estimateCircuity (99 mile canal to go 55 miles)Elevation (up 914 feet then down 750 feet)NotableUse of rail cars to haul boats up an inclined planeActed as their own bank to finance canalInterfered with salmon spawningSpeeds restricted to < 3 mph to avoid washing out banksNeeded to widen for wider boats (increased loads from 25 to 50-75 tonsResults"Immediate and pronounced" - prices of coal and wood fell in NY, business was stimulated, towns grewPeaked 1860-70, then overtaken by RRMiddlesex Canal vs. Erie CanalMiddlesex ErieCost/mile$20,000 $22,000HinterlandNew Hampshire Northwest TerritoryDevelopmentBoston increases advantage over PortsmouthNYC gains w.r.t. Boston;Rochester, Buffalo growFinancialInvestors break even by 1860, replaced by RRVastly profitable;NYC becomes financial center of USUser's PerspectiveIssue: if costs are lower, then we will use the facilityAnalysis: can we reduce cost/ton-mile by providing an opportunity for larger or better vehicles to operate over a better infrastructureCompare equipment costs and operating costs for the current and the new optionsOwner's PerspectiveIssue: should I build the facility?Analysis:Compare annual revenues to annual costsCost:Construction costs can be converted to annual payments on a loanMaintenance costsRevenue:Tolls must be less than the savings that user gets from using the canal to attract trafficInvestor's PerspectiveIssue: if we invest in this, will we be able to recover our investment plus a reasonable return?Analysis: What will the project cost?How long will it take?How much revenue will it generate (and will the owner be able to repay our loans)Do we have better options for investing?MIT Civil Engineering 1.011 -- Project Evaluation Spring Term 2003Carl D. Martland Page 4Contractor's PerspectiveIssue: should we agree to build the facility for the amount proposed (or what should we bid?)Analysis:Construction costs as a function of technology, methods, labor productivity, availability of materials, and costsIs our estimated cost less than the proposed budget?Is the


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