econ.group16

Page1of10 NEW ERA UNIVERSITY COLLEGE OF ENGINEERING AND ARCHITECTURE NO.9 CENTRAL AVENUE, NEW ERA, QUEZON CITY SENSITIVITY ANALYSIS OF PUBLIC SECTOR PROJECTS- WATER SUPPLY PLANS Gregana, jeffrey Labos, jonel NOVEMBER 18,2024 ENGR. REYNALDO DELA CRUZ ENGINEERING ECONOMICS ES 123-18.

Table of Contents Executive Summary 3 Introduction 4 Analysis 5 Alternatives 6 Recommendation and Implementation Plan 7 Conclusion 8 Exhibits 9 References 10.

ExecutiveSummary Page3of3 Executive Summary Municipal governments play a crucial role in delivering safe and reliable water supplies, yet urban expansion often leads to challenges with inherited, outdated water systems. Addressing this, a countywide water and wastewater management plan was developed, focusing on water supply solutions for a growing study area. Out of a dozen proposed plans, an executive committee identified five potential methods for providing water, which were then evaluated based on six key attributes: ability to serve, cost, engineering feasibility, institutional issues, environmental considerations, and lead time. Following the initial assessment, the top three alternatives underwent a detailed economic evaluation that included capital investment costs amortized over 20 years at 8% interest, annual maintenance and operation (M&O) expenses, and the calculation of monthly household costs. This method ensured the selection of the most cost-effective and efficient water supply solution for long-term sustainability and service reliability..

Analysis Page4of4 Introduction The expansion of cities often brings about significant challenges related to infrastructure, particularly in providing a safe and reliable water supply. As municipalities extend their boundaries into surrounding areas, they frequently inherit older water systems that were not designed to meet modern city codes or the needs of growing populations. The need to upgrade these systems has become a pressing issue, as doing so is often more costly than building new systems from the ground up. To proactively address these challenges, some city officials have started installing water systems beyond current city limits to prepare for future growth. The problem being addressed in this report is how to select the most efficient and cost-effective water supply method for an expanding study area, which will be sustainable and serve the needs of a growing population. Several key factors must be considered when developing a recommendation, including the ability to serve the area effectively, relative cost, engineering feasibility, environmental considerations, institutional issues, and lead time requirements. Stakeholders such as city officials, local residents, and environmental agencies must also be involved in the decision-making process. This report will present a detailed evaluation of five proposed water supply alternatives, using a systematic approach to analyze each option based on the factors mentioned above. The report will include a preliminary evaluation to narrow down the most promising alternatives, followed by a thorough economic analysis of the top options. The final recommendation will be based on a combination of financial feasibility, engineering practicality, and environmental sustainability. The report will conclude with a roadmap for implementing the chosen water supply solution, ensuring long-term success and reliability..

Analysis Page5of5 Analysis The core problem being faced is the challenge of providing a reliable and sustainable water supply to a growing municipal area, which has inherited outdated water systems that were not built to meet modern city standards. The city’s expansion beyond its original boundaries has compounded this issue, as the older systems may not be able to support the increased demand for water. Upgrading these systems to meet the needs of a growing population could be more costly and complex than building new infrastructure. Several contributing factors influence this problem: 1. Aging Infrastructure: The water systems inherited from outlying areas may not meet current city codes, leading to higher costs for upgrading. 2. Population Growth: The city is expanding, placing a greater strain on existing water resources and necessitating the installation of additional systems to serve new areas. 3. Cost Constraints: The financial resources available for upgrading or replacing these systems are limited, requiring a careful balance between cost and reliability. 4. Environmental Impact: New water supply methods must also consider their environmental effects, ensuring that the solution chosen is sustainable and doesn’t cause long-term harm to the local ecosystem. 5. Timeline for Implementation: City officials need a solution that can be implemented in a reasonable timeframe to ensure the water supply can meet growing demand without delay. Steps Used to Reach the Recommendation and Implementation Plan: 1. Initial Evaluation of Alternatives: Five water supply alternatives were identified and evaluated based on six criteria: ability to serve the area, cost, engineering feasibility, environmental considerations, institutional issues, and lead time requirements. Each factor was weighted equally to ensure a balanced assessment of all alternatives. 2. Ranking of Alternatives: After the initial evaluation, the top three most promising alternatives were selected for further detailed economic analysis. 3. Detailed Economic Evaluation: A comprehensive economic analysis of the top three options was conducted, which included calculating capital investment costs, amortizing those costs over 20 years at an 8% interest rate, and estimating annual maintenance and operation (M&O) costs. The annual cost was then divided by the population served to arrive at a monthly cost per household, ensuring that the solution would be affordable for residents. 4. Final Recommendation: Based on the results of the economic evaluation, the best alternative was identified, considering both financial feasibility and long-term sustainability. The chosen method would effectively meet the needs of the growing population while balancing environmental concerns and costs. 5. Implementation Plan: The report concludes with a roadmap for implementing the selected alternative, including key milestones, stakeholder involvement, and timeline for execution. Application of Course Concepts: This case applies several key concepts from engineering and economics, particularly in the areas of cost-benefit analysis, feasibility studies, and project evaluation. The approach taken mirrors the typical process used in engineering economics to assess different alternatives, weighing their costs, benefits, and risks. The evaluation of alternatives using both qualitative and quantitative criteria demonstrates the importance of balancing technical feasibility with financial viability—a key theme in engineering economy. Furthermore, concepts related to sustainability and environmental impact assessment are also integral to ensuring that the solution selected is not only financially viable but also ecologically responsible. Related Exhibits:  Exhibit 1: Evaluation Criteria Table — This exhibit outlines the six evaluation criteria used to assess the initial alternatives (ability to serve, cost, engineering feasibility, environmental considerations, institutional issues, and lead time). It provides a detailed breakdown of how each alternative was rated on a scale of 1 to 5.  Exhibit 2: Economic Evaluation of Alternatives — This exhibit shows the detailed financial analysis of the top three alternatives, including capital investment, amortized costs, and estimated monthly costs per household.  Exhibit 3: Implementation Timeline — This exhibit presents a timeline for the implementation of the selected water supply method, outlining key milestones and deadlines..

Conclusion Page6of6 Alternatives In the context of providing a sustainable water supply to a growing municipal area, the decision-maker has several potential alternatives to choose from. These alternatives are based on different methods of meeting the city's future water needs, considering both short-term and long-term goals. Below are five distinct alternatives for the decision-maker to consider: 1. Build New Water Supply System (Greenfield Approach) This alternative involves constructing an entirely new water supply system to serve the outlying areas beyond the city’s existing boundaries. This would be designed according to modern standards and codes. 2. Upgrade Existing Water System This option involves upgrading the inherited and outdated water supply systems in the outlying areas to meet current city codes and capacity requirements. It would involve modernizing the infrastructure to support increased demand. 3. Contract with a Private Company for Water Supply A private company could be contracted to build and manage the water supply infrastructure, providing water to the area for a specified period under a lease or contract agreement. 4. Implement Water Conservation Programs This alternative focuses on reducing the demand for water by encouraging conservation practices, such as promoting water-saving appliances, using recycled water, or implementing tiered pricing strategies. 5. Hybrid Solution: Combination of New Infrastructure and Conservation Efforts This alternative combines both constructing new infrastructure to meet growing demands and implementing water conservation programs to reduce overall consumption, thus creating a sustainable, cost-effective solution. Decision Criteria: To evaluate the above alternatives, the following decision criteria should be considered: 1. Cost: The total cost of each alternative, including initial capital investment, maintenance, and operational costs over a defined period (e.g., 20 years). It is important to calculate both the upfront costs and long-term sustainability costs for each alternative. 2. Feasibility: The technical feasibility of each alternative, including the availability of resources, materials, and technology required to implement the solution. This also includes engineering complexity and the ease of implementation. 3. Environmental Impact: The potential environmental consequences of each alternative, such as ecological disruption, water quality concerns, and sustainability of the water source over the long term. The environmental impact assessment is critical to ensuring the solution aligns with sustainable development goals. 4. Timeline for Implementation: The time required to implement each alternative and start providing a reliable water supply. This includes both the construction timeline and any necessary permits or regulatory approvals. 5. Capacity to Serve Growing Population: The ability of each alternative to accommodate the expected population growth over the next 20-30 years. It is crucial that the chosen method can handle the growing water demand without major upgrades. 6. Regulatory and Institutional Issues: Any legal, regulatory, or institutional challenges that may arise with each alternative, including zoning laws, environmental regulations, and governmental approvals. This would also involve assessing how each option aligns with city policies and future development plans. 7. Public Acceptance and Social Impact: The community’s acceptance of the solution, including any potential social, economic, or cultural impacts. Public perception and willingness to adapt to the new system can influence the success of the implementation..

Conclusion Page7of7 Recommendation and Implementation Plan The municipality should adopt Alternative 1A as the preferred water supply solution for the expanding areas. This alternative, while requiring a significant initial investment, offers the best balance of cost-effectiveness, long-term sustainability, and ability to serve the growing population. Action Plan: Step 1: Secure Funding and Permits - Responsible: City Council, Finance Department, Engineering Department - Timeline: Short-term (within 6 months) - Cost: $28,400,000 (initial capital investment) - Impact: Requires approval from City Council and securing necessary permits from relevant regulatory agencies. - Contingency: Develop alternative funding sources, such as grants or public-private partnerships, if initial funding falls short. Step 2: Land Acquisition and Infrastructure Development - Responsible: Engineering Department, Land Acquisition Department - Timeline: Medium-term (12-18 months) - Cost: $8,600,000 (land acquisition) + $2,560,000 (treatment plant) + $3,020,000 (transmission line) + $1,450,000 (distribution system) + $3,784,800 (additional distribution system) = $19,414,800 - Impact: Requires significant land acquisition, construction of a primary treatment plant, transmission lines, and distribution systems. - Contingency: Develop a phased approach to land acquisition and infrastructure development, prioritizing areas with the highest immediate demand. Step 3: Operationalization and Maintenance - Responsible: Water Department, Engineering Department - Timeline: Long-term (ongoing) - Cost: $2,000,000 (estimated annual maintenance and operation costs) - Impact: Requires hiring additional staff for operation and maintenance, establishing a comprehensive maintenance schedule, and implementing a water quality monitoring program. - Contingency: Develop a comprehensive training program for water department staff, ensuring they have the necessary skills and knowledge to operate and maintain the new infrastructure effectively. Step 4: Public Engagement and Education - Responsible: Public Relations Department, Water Department - Timeline: Ongoing - Cost: $50,000 (estimated annual budget for public engagement and education) - Impact: Requires engaging with the public to explain the benefits of the new water system, address concerns, and educate residents about water conservation practices. - Contingency: Develop a multi-channel communication strategy, using traditional media, social media, and community events to reach a wide audience. Anticipated Problems and Contingency Plans: - Environmental Concerns: The municipality must address potential environmental impacts, such as habitat disruption or water quality issues. Contingency: Conduct thorough environmental impact assessments, implement mitigation measures, and work closely with environmental agencies to ensure compliance with regulations. - Community Resistance: Some residents may oppose the new water system due to concerns about costs or potential impacts. Contingency: Engage in open and transparent communication, address concerns, and highlight the benefits of the new system. - Unexpected Delays: Construction projects can face unforeseen delays due to weather, permitting issues, or other factors. Contingency: Develop a flexible project schedule with contingency plans for addressing delays..

Conclusion Page8of8 Conclusion This case study has demonstrated the importance of a thorough and multi-faceted approach when selecting water supply alternatives for growing municipalities. We've seen how a combination of initial screening and detailed economic evaluation can lead to informed decisions that balance initial costs with long-term sustainability. The most important point of this report is that municipalities should prioritize a comprehensive evaluation process that considers both initial costs and long-term sustainability when selecting water supply alternatives. This approach ensures that the chosen solution is not only financially feasible but also meets the needs of the growing community while minimizing environmental impact. Implementing the recommendations outlined in this report will: 1. Ensure a safe, reliable, and affordable water supply for the growing community. By carefully evaluating the costs and benefits of each alternative, the municipality can select the most cost- effective solution that meets the needs of its residents. 2. Promote long-term sustainability. By considering environmental impacts and operational costs, the chosen solution will minimize the municipality's environmental footprint and reduce the long-term financial burden on taxpayers. In essence, a comprehensive evaluation process ensures that the municipality makes a wise investment in its water infrastructure, securing a sustainable future for its residents..

Page9of9 Exhibits.

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Page11of11 References References ■ McGraw- Hill-Blank-Engineering-Economy-7th-Ed.-2005.pdf.