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4th International Conference on Managing Pavements (1998)

ROLE OF THE NEW HDM-4 IN HIGHWAY MANAGEMENT


H R Kerali1, R Robinson2 and W D O Paterson3
1

The University of Birmingham, School of Civil Engineering, Edgbaston, Birmingham, UK


Independent Consultant, UK.
3
The World Bank, 1818 H Street NW, Washington DC, 20048, USA.
2

Abstract
An international study has been carried out to extend the scope of the World Bank
HDM-III model, and to provide a harmonised systems approach to road management,
with adaptable and user-friendly software tools. This has resulted in the development of
a new set of Highway Development and Management Tools collectively referred to as
HDM-4. The scope of the new HDM-4 tools have been broadened considerably beyond
traditional project appraisals, to provide a powerful system for the analysis of road
management and investment alternatives. The paper describes the HDM-4 software
applications developed to cater for the following components within the highway
management process: Strategic Planning, Work Programming, and Project Preparation.
Strategic planning involves the analysis of the road system as a whole, typically
requiring the preparation of long term, or strategic, planning estimates of expenditure for
road development and preservation under various budgetary and economic scenarios.
Work Programming involves the preparation, under budget constraints, of multi-year
road work and expenditure programmes in which sections of the network likely to require
improvement, are identified and prioritised. Project preparation is the final stage where
the economic benefits of road schemes are analysed prior to implementation.
1.

INTRODUCTION

The Highway Design and Maintenance Standards Model (HDM-III), developed by the
World Bank (Harral et at, 1979), has been used for over two decades to combine
technical and economic appraisals of road investment projects, and to analyse
strategies and standards. An international study has been carried out to extend the
scope of the HDM-III model, and to provide a harmonised systems approach to road
management, with adaptable and user-friendly software tools. This has resulted in the
development of the Highway Development and Management Tool (HDM-4).
The scope of the HDM-4 tool has been broadened considerably beyond traditional
project appraisals, to provide a powerful system for the analysis of road management
and investment alternatives. Emphasis was placed on collating and applying existing
knowledge, rather than undertaking major new empirical studies, although some limited
data collection has been undertaken. Wherever possible, creative new approaches
were developed for applying technical knowledge to the management needs of different
countries.

TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
in state and local transportation agencies, researchers in academic institutions, and other members of the transportation research
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2.

ROLE OF HDM-4 IN HIGHWAY MANAGEMENT

2.1

Functions and cycles

When considering the HDM-4 applications, it is convenient to view the highway


management process in terms of the following functions (Robinson et al, 1997):

2.2

Planning
Programming
Preparation
Operations
Management functions

The above functions are normally carried out as a sequence of activities referred to as
the management cycle. These are described in the following sections.
2.2.1 Planning
This involves an analysis of the road system as a whole, typically requiring the
preparation of long term, or strategic, planning estimates of expenditure for road
development and preservation under various budgetary and economic scenarios.
Predictions may be made of expenditure under selected budget heads, and forecasts of
highway conditions in terms of key indicators, under a variety of funding levels.
The physical highway system is usually characterised at the planning stage by lengths
of road, or percentages of the network, in various categories defined by parameters
such as road class or hierarchy, traffic flow/capacity, pavement and physical condition.
The results of the planning exercise are of most interest to senior policy makers in the
road sector, both political and professional. Work will often be undertaken by a planning
or economics unit within a road agency.
2.2.2 Programming
This involves the preparation, under budget constraints, of multi-year road works and
expenditure programmes in which those sections of the network likely to require
maintenance, improvement, or new construction, are identified in a tactical planning
exercise. Ideally, cost-benefit analysis should be undertaken to determine the economic
feasibility of each set of works.
The physical road network is normally considered at the programming stage on a linkby-link basis, with each link characterised by pavement sections and geometric
segments, defined by their physical attributes. The programming activity produces
estimates of expenditure, under different budget heads, for different treatment types and
for different years for each road section. Budgets are typically constrained, and a key
aspect of programming is to prioritise works to find the best value for money in the case
of a constrained budget. Typical applications are the preparation of a budget for an
annual or rolling multi-year work programme for a road network, or sub-network.
Programming activities are normally undertaken by managerial-level professionals
TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
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4th International Conference on Managing Pavements (1998)

within a road agency, perhaps in a planning or a maintenance department.


2.2.3 Preparation
This is the short-term planning stage where road schemes are packaged for
implementation. At this stage, designs are refined and prepared in more detail; bills of
quantities and detailed costing are made, together with work instructions and contracts.
Detailed specifications and costing are likely to be drawn up, and any cost-benefit
analysis may be revised to confirm the feasibility of the final scheme.
Works on adjacent road sections may be combined into a package of a size that is costeffective for work execution. Typical preparation activities are: the detailed design of an
overlay scheme; the detailed design of major works, such as a junction or alignment
improvement, lane addition, etc. For these activities, budgets will normally already have
been approved.
Preparation activities are normally undertaken by relatively junior professional staff and
technicians in a technical department of a road agency, and by contracts and
procurement staff.
2.2.4 Operations
These activities cover the on-going operation of a road agency. Decisions about the
management of operations are made typically on a daily or weekly basis, including the
scheduling of work to be carried out, monitoring in terms of labour, equipment and
materials, the recording of work completed, and the use of this information for
monitoring and control. Activities are normally focused on individual road sections with
measurements often being made at a relatively detailed level. Operations are normally
managed by sub-professional staff, including works supervisors, technicians, clerks of
works, and others. As the management process moves from planning through to
operations, it will be seen that the changes summarised in Table 1 occur.

Table 1: Change in management processes

Activity

Time
horizon

Responsible Staff

Spatial
coverage

Planning

Long term
(strategic)

Senior management Network-wide


and policy level

Programming

Medium term Middle-level


(tactical)
professionals

Preparation

Budget year

Junior professionals Scheme level/


sections

Operations

Immediate/
very short
term

Technicians/
sub-professionals

Data detail
Coarse/
summary

Mode of
computer
operation
Automatic

Network or
sub-network

Scheme level/ Fine/detailed Interactiv


sub-sections
e

Source: Developed from Paterson and Scullion (1990), Paterson and Robinson (1991).

TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
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2.3

The management cycle

Traditionally, in many highway organisations, budgets and programmes for road works
have been prepared on a historical basis, in which each year's budget is based upon
that for the year before, with an adjustment for inflation. Under such a regime, there is
no way of telling whether funding levels, or the detailed allocation, are either adequate
or fair. Clearly, there is a requirement for an objective needs-based approach, using
knowledge of the content, structure and condition of the roads being managed. It will be
seen that the functions of planning, programming, preparation and operations, provide a
suitable framework within which a needs-based approach can operate.
In order to undertake each of these four management functions, a common system can
be used. An appropriate approach is to use the concept known as the management
cycle, which is illustrated in Figure 1 (Robinson et al, 1997). The cycle provides a series
of well-defined steps which take the management process through the decision making
activities. The process typically completes the cycle once in each year or budgeting
period.
As the management of any activity is only possible with appropriate and up-to-date
information, highway management information should be considered to sit at the heart of
the management cycle. The decisions that are made in each step of the cycle uses this
information. Hence it is the combination of decisions and information that enable a
management strategy to be put in place.
Policies

Performance
monitoring

Implementation

HIGHWAY
MANAGEMENT
INFORMATION
Inventory
Condition
Resources
Treatments
Productivity
Unit Costs
Economic
prameters

Classification
and standards

Needs assessment

Finance
and
Resources

Figure 1: Highway Management Cycle


2.4

Functions of HDM-4 within the management cycles

The highway management process as a whole can, therefore, be considered as a cycle


of activities that are undertaken within each of the management functions of planning,
programming, preparation and operations. This is summarised in Table 2 and provides
TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
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4th International Conference on Managing Pavements (1998)

the framework within which HDM-4 needs to be considered.


Table 2: Role of HDM-4 within the Management Cycle
Management
function
Planning

Programming

Preparation

Operations

3.

Examples of common descriptions

HDM-4 Application

Strategic analysis system


Network planning system
Pavement management system

Strategy Analysis

Programme analysis system


Pavement management system
Budgeting system

Programme Analysis

Project analysis system


Pavement management system
Bridge management system
Pavement/overlay design system
Contract procurement system

Project Analysis

Project management system


(Not addressed by HDM-4)
Maintenance management system
Equipment management system
Financial management/accounting system

HDM-4 SYSTEM STRUCTURE

The overall structure of HDM-4 is illustrated as in Figure 2. There are three main areas
of application for HDM-4 which can be undertaken using the following applications tools
(Kerali et al, 1996):

Project analysis
Programme Analysis
Strategy Analysis

The applications tools operate on core data objects defined in the following data
managers:

RoadNet manager - defines the road network or sub-network that will be the
basis of the analysis.
Vehicle fleet manager - defines the characteristics of the vehicle fleet that will be
operating on the road network being analysed.
HDM-4 Setup - defines all of the default data to be used with the data analysis; a
set of default data will be provided with the system, but users will have access to
this to modify the data to reflect local circumstances.

TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
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4th International Conference on Managing Pavements (1998)

USER INTERFACE
Analysis Tools
Project

Programme

Data Managers
Strategy

RoadNet

VFM

File Converter
HDM
Setup

MODELS
RD

RUC

MIE

SEC

CORE
DATA
OBJECTS

EXTERNAL
SYSTEMS

Figure 2: Conceptual Structure of HDM-4

There are four technical modules within HDM-4. The first three; Road deterioration
(RD), maintenance and improvement effects (MIE), and Road user costs (RUC), are
similar in scope to the equivalent models currently used within HDM-III. The fourth
module, Socio-economic costs (SEC) enables the prediction of road accident and
environmental impacts. HDM-4 can also interface to external systems such as:

Databases: road network information systems, pavement management systems,


etc., through a file converter
Technical models: can be accessed directly by external systems for research
applications or other studies

The system design is modular in nature, with an integrated interface between the
modules. The modular design enables users to substitute the default technical models
with their own. Existing technical relationships are all implemented in such a way that
they can easily be calibrated to local conditions; this is done through HDM-4 set-up.
4.

APPLICATIONS TOOLS

4.1

Project Analysis

Project analysis is concerned with the evaluation of one or more road projects or
investment options. The application analyses a road link or section with user-selected
treatments, and associated costs and benefits, projected annually over the analysis
period. Economic indicators are calculated for the different investment options. This is
essentially equivalent to HDM-III. Project analysis may be used to estimate the
economic or engineering viability of road investment projects by carrying out the
TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
in state and local transportation agencies, researchers in academic institutions, and other members of the transportation research
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4th International Conference on Managing Pavements (1998)

following (Bennett, 1996):


Life cycle predictions of pavement performance
Estimation of maintenance/improvements effects and their costs
Calculation of road user costs and benefits
Prediction of environmental effects
Economic comparisons of project alternatives
Typical appraisal projects would include the maintenance and rehabilitation of existing
roads, widening or geometric improvement schemes, pavement upgrading and new
road construction.
There are no fundamental changes to the HDM-III philosophy in this area, but improved
road deterioration relationships have been extended to cover a wider range of
pavements and the performance of materials in temperate and cold climates. In addition,
road user cost relationships have been updated and extended to include road accident
costs and environmental effects.
4.2

Programme and Strategy Analysis

It is in the areas of programme and strategy analysis that HDM-4 offers significant
improvements over HDM-III.
Programme analysis is concerned with the preparation of a multi-year rolling work
programme for a road network in which candidate investment options are identified and
selected, subject to resource constraints. Road networks are analysed section by
section and estimates are produced of road works and expenditure requirements for
each section in each year of the funding period.
Strategy analysis is concerned with the long term performance of a chosen network as a
whole, for preparing long range planning estimates of expenditure needs for road
development and preservation under different budget scenarios. The road network is
characterised by lengths of road in different categories defined by parameters such as
road class, surface type, pavement condition or traffic flow. Estimates are produced of
expenditure requirements for medium to long term periods of 5-40 years.
The main difference between strategy and programme analysis is the way in which links
and sections are physically identified. Programme analysis deals with links and
sections, that are unique physical units identifiable from the road network throughout the
analysis. In strategy analysis, the road system essentially loses its individual link and
section characteristics. These are grouped into representative sections of the road
network to be analysed.
For both types of analysis, the problem can be posed as one of seeking the combination
of treatment alternatives across a number of sections in the network that optimises an
objective function under budget constraint. If, for example, the objective function is the
maximisation of NPV, the problem can be defined as:
Select the combination of treatment options for sections that maximises NPV for
the whole network subject to the sum of the treatment costs being less than the
TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
in state and local transportation agencies, researchers in academic institutions, and other members of the transportation research
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4th International Conference on Managing Pavements (1998)

budget available.
Another key difference between strategic and programme analysis and that for project
analysis is in the detail at which data are defined. Use is made of the concept of
information quality levels (IQL) recommended by the World Bank (Paterson and Scullion
1990). Project level analysis data are specified in terms of measured defects (IQL-II),
whereas the specification for strategic and programme analysis is more generic (IQL-III).
For example: for project level analysis, roughness would be specified in terms of the IRI
in m/km. For strategic and programme analysis, roughness could be specified as
good, fair or poor. The relationship between IQL-II and IQL-III level data depends
on road class, pavement surface type and traffic class, and is user-defined in the HDM
set-up, with defaults provided.
4.3

Life Cycle Analysis

The underlying operation of HDM-4 is similar for each of project, programme or strategy
analysis. In each case, HDM-4 simulates total life cycle conditions and costs for an
analysis period under a user-specified scenario of circumstances. The primary set of
costs for the life cycle analysis include the costs of capital investment, maintenance,
vehicle operation, travel time, and accidents as an option. The cost of environmental
pollution is not currently included, but will be added in a later release.
The broad concept of the life cycle analysis is illustrated in Figure 3. Interacting sets of
costs, related to those incurred by the road agency and those incurred by the road user,
are added together over time in discounted present values. Costs are determined by
first predicting physical quantities of resource consumption and then by multiplying
these quantities by their unit costs or prices. Economic benefits are then determined by
comparing the total cost streams for various maintenance and construction alternatives
with a base case (do nothing or do minimum alternative), usually representing minimal
routine maintenance.
4.4

Estimation of economic benefits at network level

In programme and strategy analysis, it is expected that a large number of network


elements may need to be analysed. This could result in very long run times when an
extended analysis period is specified. A short analysis period is therefore provided as
an alternative to full life cycle analysis. A budget period analysis is therefore provided as
an alternative for calculating the economic benefits of investment alternatives:
In the full life cycle analysis method, the costs and benefits incurred over a long analysis
period, typically between 15 to 30 years, are calculated and discounted to determine the
NPV, IRR and BCR. This may be appropriate in situations where only a few potential
projects are being analysed, for example when preparing programmes for new
construction projects. A short period analysis may be more appropriate under one or
more of the following circumstances:

INPUTS

MODEL

OUTPUTS

TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
in state and local transportation agencies, researchers in academic institutions, and other members of the transportation research
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INPUTS

MODEL

Vehicle type, volume, growth,


loading, physical parameters,
terrain, materials, rainfall,
geometry, thickness, unit
costs

Start of analysis loop

Pavement type and strength,


ESA, age, condition

ROAD
DETERIORATION

Road geometry and


roughness; vehicle speed,
type; congestion parameters;
unit costs

ROAD
USER
COSTS

Maintenance strategy

MAINTENANCE
EFFECTS

Road geometry and surface


texture, vehicle
characteristics

Developmental, accident,
environmental, and other
exogenous costs and benefits

OUTPUTS

SOCIAL
and
ENVIRONMENTAL
COSTS

ECONOMIC
ANALYSIS

Return to start of
Analysis loop

Cracking, ravelling, pot-holes,


rut depth (paved); gravel
thickness (unpaved);
roughness

Fuel, lubricant, tyres,


maintenance, fixed costs,
speed, travel time, costs

Cracking, ravelling, pot-holes,


rut depth (paved); gravel
thickness (unpaved);
roughness, maintenance
quantities

Levels of emissions and


traffic noise, number of
accidents

Costs and benefits, including


exogenous benefits

Total costs by component;


net present values and rates
of return by section

Figure 3: Life cycle analysis using HDM-4

TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
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(i)
(ii)

(iii)

Uncertainty in predicting traffic growth over a long period of time into the future.
Uncertainty in the long term prediction of pavement deterioration and
maintenance effects, for example, when there is insufficient historical data for
calibrating the HDM-4 deterioration models.
Uncertainty about budgets in the long term, since these affect decisions on future
maintenance or construction options.

A shorter analysis period, equal to one funding period or budget period, of typically
five years, may be used to reduce run times where a large number of network elements
are involved. In this case, the discounted costs and benefits are evaluated only for the
specified budget period. There are two issues to be considered with this approach:
firstly the determination of the residual value of the investment at the end of the short
budget period, and secondly the estimation of benefits accruing due to the investment
beyond the budget period.
In order to account for these, benefits are estimated by comparing investments made
during the budget period with a corresponding base alternative of the investment
deferred to the next budget period, as illustrated in Figure 4. For example, an overlay
applied in the second year of the budget period would be compared with an overlay
carried out in the following budget period. A simplifying assumption is made that the
overlay required for the base alternative (i.e. in the following budget period) will improve
pavement condition to the same level as an overlay applied during the first budget
period. It is also assumed that the pavement performance after the budget period will be
similar for both alternatives. Hence, there is no need to calculate pavement deterioration
and road user costs beyond the first year after the budget period. This approach is
similar to that in the United States Highway Economics Requirements System (FHWA,
1994).

IRI
Budget Period

Base Alt.
Project Alt.
Benefits during budget period
Years

Figure 4: Calculation of benefits during budget period

TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
in state and local transportation agencies, researchers in academic institutions, and other members of the transportation research
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4th International Conference on Managing Pavements (1998)

4.5

Optimisation methods

The strategy and programme analysis modules provide two methods for optimisation:
Total enumeration.
Incremental benefit/cost ranking.
The total enumeration method is the same as that used in the Expenditure Budgeting
Module of HDM-III (Watanatada et al, 1987). It requires the following parameters:
Length of analysis period.
Budget periods.
Objective function (maximise NPV or network condition improvement).
Resource constraints for each funding period.
If the problem to be solved is too large for total enumeration, then the incremental
benefit/cost or efficiency frontier method offers an alternative (Harral and Faiz, 1988).
This searches through investment options by comparing the incremental benefit of one
option with another. The objective is to select options successively with the largest
incremental benefit, since this maximises NPV for any given budget constraint. The
incremental benefit is defined in Equation 1 below. The method is similar in principle to
that defined for the UK Pavement Management System (Phillips, 1994)
Eji
where:E
NPV
cost
i, j
4.6

(NPVj - NPVi) / (costj - costi)

=
=
=
=

incremental benefit
net present value
investment cost
lower, higher cost alternatives, respectively

(Eq.1)

Outputs

The main output from the programme analysis modules is a schedule of section options
assigned to each year of the funding period, as shown in Table 3. The main type of
output produced by the strategy analysis are future projections of network condition and
funding requirements.

Section
No.
A10031
A10004
B30106
A20122
:
C34567
:
B32109
:

Table 3. Example of Multi-Year Rolling Work Programme


Length
Work Type
Year
Cost
Total cost
(km)
($m)
($m)
12.5
Reconstruct
1997
5.4
5.4
23.4
Resurface
1997
2.9
8.3
19.8
Reconstruct
1997
7.6
15.9
5.5
Patch & Reseal
1997
1.4
17.3
:
:
:
:
:
22.6
Reconstruct
1998
9.7
237.1
:
:
:
:
:
15.0
Resurface
1999
1.2
296.8
:
:
:
:
:

TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
in state and local transportation agencies, researchers in academic institutions, and other members of the transportation research
community. The information in this paper was taken directly from the submission of the author(s).

4th International Conference on Managing Pavements (1998)

5.

DATA MANAGERS

5.1

Road Network Manager

The Road Network manager provides the basic facilities for network referencing within
HDM-4. It allows users to define different networks and sub-networks, and to define
sections of road, which are the fundamental unit of analysis within HDM-4. Whereas
sections are lengths of road over which physical characteristics are reasonably
constant, the network referencing system also supports the concept of links, over
which traffic is reasonably constant, and nodes which connect links. All network data
are entered using Road Network manager, and facilities are also available for
modifying, deleting and maintaining these data. The approach to network referencing is
considerably more flexible than that used in HDM-III, and is designed to handle a wide
range of external referencing conventions that are used by other systems with which
HDM-4 may need to interface.
5.2

Vehicle Fleet Manager

The Vehicle Fleet Manager provides facilities for the storage and retrieval of vehicle
fleet details used for calculating vehicle speeds, operating costs, travel time costs and
other vehicle effects. The method used to represent vehicle fleets is considerably more
flexible than that used in HDM-III. Motorcycles and non-motorised vehicles can be
included, and there is no limit on the numbers or types of vehicles that can be specified.
Multiple vehicle fleet data sets can be set up for use in different analyses, and a wide
range of default data are provided.
5.3

HDM Setup

It is recognised that HDM-4 will be used in a wide range of environments, and HDM-4
Setup provides the facility to customise system operation to reflect the norms that are
prevalent in the environment under study. Basic data and calibration coefficients can be
defined in a flexible manner to minimise the amount of data that must be changed for
each application. Default values are supplied with HDM-4, but these are all userdefinable and facilities are provided to facilitate this data modification.
5.4

HDM-4 File Interchange

The HDM-4 set of tools may be used as additional modules to existing pavement
management systems. File interchange facilities are provided within HDM-4 for data
transfer with existing databases used in other pavement management systems. The
data exchange format is based on international data transfer specifications to
encourage its adaptation by road agencies.
6.

CONCLUSIONS

One of the key objectives of the ISOHDM was to provide an international standard tool
to be used by road agencies as part of their highway management functions. The HDM4 new provides a set of tools which can be integrated either individually or as a set
within road management systems used by road agencies. The modular system design
adopted for HDM-4 should facilitate the adoption of HDM-4 as the standard tool for
TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
in state and local transportation agencies, researchers in academic institutions, and other members of the transportation research
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4th International Conference on Managing Pavements (1998)

project analysis, work programming and long term strategic analysis of road network
requirements. The technical modules permit extensive calibration of the models used in
HDM-4 in order to cover the range of environment experienced world-wide. In addition,
the HDM-4 software modules can be replaced, if necessary to customise their use within
existing road agency management information systems.
ACKNOWLEDGEMENTS
The development of HDM-4 has been sponsored by several agencies, including the
World Bank, the United Kingdom Overseas Development Administration (ODA), the
Asian Development Bank (ADB), the Swedish National Road Administration (SNRA),
the Federation of Intra-American Cement Manufacturers (FICEM), and the Finnish Road
Administration (FinnRA). Many other organisations and individuals in a number of
countries have made significant contributions by providing information, or undertaking
technical review of products. The study has been co-ordinated by the ISOHDM
Secretariat based within the Highways Management Research Group in the School of
Civil Engineering at the University of Birmingham in the United Kingdom.
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system. Third International Conference on Managing Pavements, San Antonio, Texas,
22-26 May 1994, Volume 2. Washington DC: National Academy Press, 227-236.

TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
in state and local transportation agencies, researchers in academic institutions, and other members of the transportation research
community. The information in this paper was taken directly from the submission of the author(s).

4th International Conference on Managing Pavements (1998)

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KEYWORDS
Road Management, Pavement Management Systems, Road User Costs, Work
Programmes, Road Maintenance.

TRB Committee AFD10 on Pavement Management Systems is providing the information contained herein for use by individual practitioners
in state and local transportation agencies, researchers in academic institutions, and other members of the transportation research
community. The information in this paper was taken directly from the submission of the author(s).

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