Monetising time savings makes toll roads financially stack up, says research

Putting a financial value on the savings from traffic congestion, noise and air pollution as a result of toll roads and tunnels will make large infrastructure projects more cost effective, according to a new study by Australia’s Queensland University of Technology (QUT). Sae Chi, from the university’s Science and Engineering Faculty, has compared the financial and economic cost of public and privately operated toll roads and tunnels, and found the net impacts to the community should be taken into account
September 29, 2017 Read time: 2 mins
Putting a financial value on the savings from traffic congestion, noise and air pollution as a result of toll roads and tunnels will make large infrastructure projects more cost effective, according to a new study by Australia’s Queensland University of Technology (QUT).


Sae Chi, from the university’s Science and Engineering Faculty, has compared the financial and economic cost of public and privately operated toll roads and tunnels, and found the net impacts to the community should be taken into account in decision-making about transport infrastructure investment.

The research has been published in the Journal of Transportation Engineering titled Measuring impacts and risks to the public of a privately operated toll road project by considering perspectives in cost-benefit analysis.

The report claims that the financial bottom line should not be the only consideration when determining whether or not to invest in toll roads and tunnels.

Governments often partner with the private sector to share the costs and risks of building and operating toll road and tunnel projects. However, the report says that while private operators were looking for a bottom line return on investment, governments needed to consider benefits in addition to toll charges and traffic flows that can result in profits. Even when partnering with the private sector, it is important that governments consider the public benefits and monetise savings such as travel time, reduced costs to drivers and the positive outcomes for the environment. Chi believes that when governments put a financial cost on these factors the cost-benefit analysis sways much more heavily in favour of supporting infrastructure investment.

Chi said current cost-benefit analysis for road and tunnel projects was limited in Australia, and in most cases focused on the financials and not the public benefits. “But governments are responsible for public decision making for the good of their constituents and this includes ensuring that public funds are invested wisely and that regulation of private sector activity ensures a net benefit to society,” she said.

Chi believes the study findings would help support increased infrastructure investment across the nation, especially in high-growth population areas.

Charging, Tolling & RUC

Related Content

  • July 18, 2014
    No evidence California cellphone ban decreased accidents, says researcher
    In a recent study, a researcher at the University of Colorado Boulder found no evidence that a California ban on using hand-held cellphones while driving decreased the number of traffic accidents in the state in the first six months following the ban. The findings, published in the journal Transportation Research Part A: Policy and Practice, are surprising given prior research that suggests driving while using a cellphone is risky; past laboratory studies have shown that people who talk on a cellphone wh
    Read More
  • May 18, 2016
    Car traffic in London is down but congestion is up, says new study
    London Congestion Trends, an in-depth study of the causes of traffic congestion in London between 2012 and 2015 published by Inrix, indicates that congestion in London is increasing, with journey times in Central London growing by 12 per cent annually. Inrix says this is consistent with data that shows that the London economy and population are growing, which normally results in an increase in gridlock. Further, unemployment and fuel prices are down, both of which usually mean a rise in traffic. Despite thi
    Read More
  • September 26, 2017
    Self-driving cars ‘could make traffic congestion worse’
    The University of Sydney has released the results of a survey that indicates that Australian drivers are unlikely to share their vehicles with other travellers and increasing congestion, contrary to predictions made by transport experts and the motor industry. The University’s University of Sydney Business School’s latest Transport Opinion Survey, conducted by the School’s Institute of Transport and Logistic Studies
    Read More
  • April 29, 2015
    Foundation funds research for informed campaigning
    ITS International talks to Professor Stephen Glaister, director of the transport research and lobbying organisation, the RAC Foundation. It is through the eyes of an economist that Professor Stephen Glaister, emeritus professor of transport and infrastructure at Imperial College London and director of the RAC Foundation, views current and future transport problems. Having spent 30 years at the London School of Economics and another 10 at Imperial, the move to the RAC Foundation was a radical departure from
    Read More

Highlighted Content