Economic Appraisal of Highways in Ghana: A case study of the proposed dual carriageway between Accra and Kumasi

Abstract

Roads and Highways are vital lifelines. Roads are needed for accessibility and for transporting of people, goods and services.  Roads are therefore needed for socio-economic purposes. This research aims at assessing the suitability of asphalt as a suitable pavement material.  The objectives of the research are as follows; to determine the initial cost of  constructing the proposed road, to determine the lifecycle cost of  the proposed road, to carry out investment appraisal on the proposed road project. Findings were as follows; the initial cost of the proposed road project is GH¢604,642,500.00 and the lifecycle cost is GH¢1,654,794.51/Km. Investment appraisal methods gave the following results; Simple payback period is 15 years, 11months, Discounted payback period is 40 years, Net Present value is negative GH¢481.29 million, Internal Rate of Return is 6.278%, Average Rate of Return is 6.278% and Present Worth is GH¢ 910.137 million. Hence the road project is not profitable and economically not feasible .However, the proposed road project can still be undertaken because of social and political reasons.

Keywords: Road, Highway, Economic Appraisal, Pavement.