Keeping in mind that $2.6 billion worth of “Time Savings Benefits” have been ascribed to the Waterview Connection (almost single-handedly justifying the project), I guess it’d make sense to have a look internationally at these benefits, to make sure they’re robust and stack up well.
Luckily, a study in Melbourne into them has recently been conducted. Let’s have a look at its abstract:
The foremost economic benefit postulated and claimed for all road network investments is the value of travel time saved. This paper’s aim is to empirically test whether the very substantial economic resources that have been consumed over the last two or so decades in the construction and use of major road network additions in Melbourne have helped to achieve the travel time savings which formed the main foundation of their economic justification. The study uses the annual traffic system monitoring data prepared by VicRoads for the monitored urban road network, and compares these actual data against the results for Melbourne’s urban road system that were projected by various traffic modelling experts in the 1990s. In particular this study uses City Link as the case study to enable the comparison between such projections and actual traffic volumes and traffic behaviour.
One of the key findings of this study is that the average whole of day speed on Melbourne’s freeways overall has stayed at around the same level (78+ kms /hour) apart from 2000-01 (83.5 kms/ hour) and 2001-02 (79.5 kms’ hour). Second, the average speed in kilometres per hour in both the morning and evening peak periods for the whole monitored urban network in the most recent year for which data are available — the year ended June 30 2007 — is the lowest it has been since 1994-95. Third, average travel speeds in inner Melbourne post the opening of City Link have reduced in both the morning and evening peaks. Even more concerning is the fact that average speeds across the whole day for both freeways and all types of arterial roads in the inner Melbourne region have all similarly dropped over the years 2001-02 to 2006-07. Fourth, the projected volume of freeway traffic of 331,000 DVH by 2011 looks unlikely based on the reduced speed of freeway traffic volumes since 2003-04 and a total freeway volume of 244,700 DVH in 2006-07. Finally, the Net Present Value (NPV) of the extra travel time in actual daily vehicle hour equivalents over the years 1997-98 to 2006-07 as compared to the projected total saving in DVH of 161.2 million is -$349.4 million. Given this dissaving, the NPV of travel time savings on Melbourne’s’ urban road network from 2007-08 to 2030-31 inclusive would have to amount to $1.834.4 billion, as opposed to the projected NPV of $957.1 million by Allen consulting group and Cox (1996).
In sum, the results from this study suggest that the core of travel times savings benefits, which is an increase in average travel speeds, has not to date eventuated in Melbourne’s urban road network during the years under review. Indeed, based on the evidence presented and analysed in this paper, one could be led to the conclusion that investments in Melbourne’s urban road network have resulted in more time being used by Melbourne’s motorists rather than less time. Hence major road infrastructure initiatives and the consequent economic investments have not yet delivered a net economic benefit to either Melbourne’s motorists or the Victorian community. Equally concerning is the plausible conclusion from this analysis that over their remaining economic life such major urban road network investments are unlikely to result in major travel time savings.
I wonder if this will have implications into how we evaluate the anticipated benefits of the various transport projects we embark upon?