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

  • February 25, 2015
    Substantial savings from smarter street lighting
    As authorities strive to reduce expenditure and carbon emissions, Colin Sowman looks at some of the smart ways of managing street lighting while containing costs and maintaining safety. Street lighting can account for 40% of an authority’s energy consumption. So, faced with the need to reduce outgoings, some authorities are looking for smart ways of managing street lighting or even turning off swathes of street lights in the small hours. Back in 2008 the E-street Initiative report concluded that authorities
    Read More
  • August 2, 2013
    Study shows significant savings from combining bus and HOT lanes
    David Crawford looks at some radical thinking that could see self-financing mass transit in Florida. Toll and transit agencies in the Tampa metro area on the west coast of the US State of Florida, have joined forces to put forward a pioneering combined bus and toll lane (BTL) scheme. The Tampa Hillsborough Expressway Authority is working in partnership with regional bus operator Hillsborough Area Regional Transit on the plans of which should be finalised this autumn. The Tampa Hillsborough Expressway Author
    Read More
  • March 6, 2018
    ITSA’s Shailen Bhatt looks to the future
    The new boss of ITS America is fizzing with ideas. Shailen Bhatt talks to Adam Hill about the need to rebrand the ITS industry, how technology can leverage tax dollars – and where the Star Wars universe fits in to his philosophy. Shailen Bhatt has a big job on his hands. The CEO and president of the Intelligent Transportation Society of America is the second to hold the post in two years following the resignation last July of his predecessor Regina Hopper. It has not been the easiest time for the
    Read More
  • November 13, 2012
    India to invest in transportation to boost urban economies
    Grand plans have been announced for transport investment in India aimed at boosting city economies. India’s Government Secretary for Urban Development Sudhir Krishna explains all to Jason Barnes. There are many reasons for developed countries’ high levels of urbanisation, not least of which is that the types of employment to be found in towns and cities tend to generate relatively greater wealth and so make greater contributions to a country’s economy. That creates the imperative for developing nations to f
    Read More

Highlighted Content