THE ECONOMIC EVALUATION OF FOREST ROAD BUILDING

Abstract

Forest road density in Latvia is insufficient, although the Joint Stock Company ‘‘Latvijas valsts meži” (“Latvian State Forestry”) performs active forest road building. The hypothesis of the research is that the resources invested in a forest road building pay off during its use. The goal of the research is to study the economic benefit from forest road building. The authors’ research showed that the total costs of forest road building and use could result in Ls 246,779 over 40 years or Ls 6,170 per year. The benefit from building a forest road could be Ls 42,661 in cash or 0.89 Ls/m3 . Thus the total net loss is Ls 204,118. The calculation of the net present value with the discount rate of 2% also showed that forest road building is not economically beneficial in the researched period.