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

  • Parking provision dictates commuters’ modal choice
    March 16, 2016
    Researchers from two American Universities have found the provision of parking spaces can encourage automobile use and increase traffic congestion. It is well understood that increased automobile use is linked to congestion, environmental degradation and negative health and safety impacts. Trials of smart parking technology has shown a reduction in circulating traffic (looking for parking) can ease congestion and that the cost of parking can influence commuters’ modal choice. Now, researchers at the univers
    Read More
  • Report on the impact of recession on infrastructure funding worldwide
    May 10, 2012
    A new report examines how aggressive government belt-tightening and financial market deleveraging restrained worldwide infrastructure investments for 2012 and probably for the next five years. In the US, for instance, Infrastructure2012: Spotlight on Leadership, released by the Urban Land Institute (ULI) and Ernst & Young, says that constrained public budgets and a growing recognition at the local level of the importance of infrastructure, combined with lack of action at the federal level, are causing state
    Read More
  • Cooperative road infrastructures - progress and the future
    February 1, 2012
    Robert Bertini, deputy administrator of the USDOT's Research and Innovative Technology Administration, discusses the research and deployment paths of cooperative road infrastructures. High-level analysis by the US's National Highway Traffic Safety Administration (NHTSA) of the potential of Vehicle-to-Infrastructure/Infrastructure-to-Vehicle (V2I/I2V) and Vehicle-to-Vehicle (V2V) technologies indicates that V2V could in exclusivity address a large proportion of crashes involving unimpaired drivers. In fact,
    Read More
  • Mega trends will challenge transport technology
    June 5, 2015
    Jon Masters investigates some of the longer term trends that will shape transportation over the next 20 years. Business analysts and investors have already placed their bets on a future of technological smart mobility services. In December last year, the Wall Street Journal reported that Uber, the on-demand taxi and lift share smartphone app and start-up business, had been valued at $41.2 billion which, as the Journal reported, is an incredible vote of confidence for a company only five years old.
    Read More

Highlighted Content