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 management 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 damage/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.