Are there any tools available in any GIS environment for route alignment? To be specific, the tool should take a DEM and road-construction parameters -- distance and gradient, roadfill, drainage crossings, starting point and end point -- as input? I have used path distance in ArcGIS but it is very basic. Are there any tools which have been developed completely for this specific task in GIS environment. Or is there any better option for this task?
While there is some degree of convergence happening between GIS and civil engineering CAD tools, you are probably much better off with the latter type of, much more specialized, tool.
Some examples of suitable civil engineering CAD tools:
Softree's RoadEng is very good (I worked on it briefly) and relatively low-cost.
Autodesk's (AutoCAD) Civil 3D is probably the most well-known.
Carlson's Carlson Civil is one that works on top of AutoCAD.
There are others.
Softree Technical Systems has been working with the University of British Columbia's Mathematics Department on vertical alignment and earthwork optimization technologies. See: http://www.publicaffairs.ubc.ca/2012/12/18/revolutionizing-road-design/
Please refer to our website http://softreeoptimal.com/ for further details or send me an email at email@example.com and I can answer any further questions there may be.