C-5. Costs. The foregoing description of rehabilitation focused exclusively on service flows in
describing the Base Condition and the range of rehabilitation alternatives. O&M and repair costs
also have time paths such as those shown in Figures C-1 and C-2. One would expect, however,
that the cost path, at least for the Base Condition, would be increasing over time and would
display increasing variance. The risk-based benefit-cost analysis must incorporate uncertainties in
project costs in each year for the Base Condition and all rehabilitation alternatives.
C-6. Conclusion. All rehabilitation plans result in some time path between Path II and Path IV.
Each plan contains elements that increase expected service levels by both increasing the reliability
of a fixed service flow, (with reduced frequency of repairs and costs), and by increasing the level
of "potential" service flows from the Base Condition. The analytical procedures for evaluating
any rehabilitation plan are the same. The analyst must first be able to quantitatively describe the
Base Condition in terms of service levels, costs and reliabilities both now and over the planning
period. Correspondingly, any rehabilitation option must also be quantitatively described in these
same terms.
C-4
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