Life-Cycle Cost Analysis with Natural Hazard Risk

Abstract

Life-cycle cost is an important factor that should be estimated in the design and optimal manage- ment of infrastructure expected to be functional for a long period of time. In addition to initial construction cost, the estimation should include expenditures for maintenance, retrofit, and upgrading. This represents a relatively new concept whose application in the United States has been encouraged by passage of the 1991 Intermodal Surface Transportation Efficiency Act (ISTEA) for bridges. One problem associated with life-cycle cost estimation, as currently implemented, is that the costs associated with natural hazards, particularly future earthquakes, are not taken into consideration. The present paper provides a framework in which not only the initial capital and discounted maintenance cost but also the discounted cost for seismic retrofit and damagel repair cost from seismic events can be combined for a more realistic life-cycle cost estimation for bridges that are located in earthquake-prone areas. The framework provides economic insight into the various components of cost and identifies the specific information required for life-cycle cost estimation.