D FOR SURFACE TRANSPORT INFRASTRUCTURE Component 1: Growth in PRCS Annual new construction is simply 1/10th the paved road asset value growth over the decade. - 10)/10 (for t = 2010, 2020, 2030) Component 2: Replacement capital due to PRCS depreciation In capital costing and accounting for roads, the economic useful life of the road asset is assumed to be about 30 years. This means that each year (in a steady state of no asset growth), about 1/30th of the asset value must be replaced per year. As there is new construction but no desire to construct a complicated depreciation/capital asset model, the 1/30th depreciation factor is applied to the PRCS lagged 10 years. NCt2 (PRCSt - 10)/30 (for t = 2010, 2020, 2030) The total annual value of new construction is the sum of these two components: = [(PRCS,-PRSt-10)/10]+[(PRCSt-10)/30] = [(PRCSt - (2/3 PRCSt 10))/10] (for t = 2010, 2020, 2030) It should be noted that the replacement capital is much the greater of the two, accounting for 81% of NC in 2010, falling to 72% in 2030 (i.e. is 3-4 times as large as the new construction which results in net addition to the PRCS asset value). C. Rail variables Rail-track (rkm): Base-level railway lengths (roughly 2000) are from US- CIA (2005). Rail-track Capital Stock (USD billion): Base-level rail-track capital stock (RTCS) is estimated based on rail-track length (rkm) and an estimate of asset value per rkm. The latter was based on many discrete railway sources, and varied from a high of USD 3.33M/rkm in Japan, to an assumed low of USD 0.25M/rkm in developing countries - with an observed low of USD 0.31M/ rkm for Canada.³ The same "model" was applied to rail as in road - with various parameters (principally dealing with asset value per rkm) both to allow for rising quality of infrastructure over time, and (more importantly) to boost the rail new construction levels to be consistent with published spending intentions for China railways, 4 and for OECD (TEN-T High-Speed Rail). 5 Rail-track new construction (USD billion): Base-leve