Tuesday, February 7, 2012

Material-Specific Discount Rate Flaws Raised in Media

During NAPA's Annual Meeting in California, a press conference was held to inform industry journalists about the white paper "An Economic Analysis of the Proposed Material-Specific Discount Rate for Commodity Pricing in Highway Construction Life-Cycle Cost Analyses" (NAPA Special Report 203). The white paper highlights flaws in using material-specific discount rates in LCCAs — a unique approach with no support in accepted economic practices — as promoted by the Portland Cement Association. The approach is based on information from a 2011 report by the Concrete Sustainability Hub (CSH) that attempts to model differing inflationary pressures for different materials within an LCCA.
NAPA's Dr. Audrey Copeland, Vice President for Engineering, Research, & Technology, and Jay Hansen, Executive Vice President, briefed members of the media about the findings in the white paper, as well as legislative initiatives that use the CSH report in an attempt to mandate the use of a material-specific discount rate.
Since the press conference, the NAPA report has been covered by Better Roads,ForConstructionPros.com (the Web portal for Asphalt Contractor, Pavement Maintenance & Reconstruction, and other titles), Public Works Magazine,InfraStructures, and Rebuilding America's Infrastructure. The white paper has also been reported on by Engineering News-Record.
A copy of the white paper and supporting materials are available at www.asphaltpavement.org/SR203.

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