A story out of Sydney on bad news for toll roads and bridges. Skip the details on the complications of BrisCon and get to the meat:
As the failed Cross City Tunnel and Lane Cove Tunnel projects in Sydney and the foundering performance of Connect East in Melbourne attest, forecasting is critical to the viability of a project.
For some time the critics such as Sydney University’s Dr John Goldberg have claimed that the traffic forecasts on many toll-road projects appear constructed to fit the financial model, not the other way around.
The recent traffic numbers for Transurban, Macquarie Infrastructure Group and other players in the space, and indeed the research from broking analysts who follow these stocks, would indicate that the assumption of perpetual growth is now flawed.
Toll roads around the world are proving susceptible to recession and oil prices. Toll revenue is, contrary to former assumptions, elastic. …
This is similar to the experience of many other OECD countries, which have seen motor vehicle use decline from 2004 or 2005, initially in response to high oil prices but subsequently due to the economic conditions. Data in the US has fallen off a cliff.
Sustainability advocate Peter Newman weighs in:
Now it would seem BrisCon faces more serious issues than its financial model.
Peter Newman, a member of the Infrastructure Australia board, recently noted falling traffic was ”part of a worldwide trend. In the United States there has been a significant drop in vehicle miles travelled, which began before the fuel price rises.
”I am predicting reductions in car use from here on. It’s the death knell for toll roads and indeed makes any new road capacity increases highly questionable.”
The economic downturn has also seen a migration to public transport. Sydneysiders took 22 million more train and bus journeys last year than they did the year before. CityRail experienced a 5.7% increase in patronage – about 17 million individual journeys – from December 2007 to December 2008.
And State Transit buses provided 5.6 million more trips last year even though many in the inner city and eastern suburbs are already operating at capacity.
Not to worry. Kevin Falcon is confident that Port Mann will be just fine.
I am getting confused.
I heard Anthony Perl on CKNW a few days ago. At one point, he claimed that a new Port Mann Bridge would be nearly empty because of rising gas prices. Five minutes later he said it would be congested again in short order. Which is it?
Either you are leaving out some key detail, Rod, or he didn’t have enough time to explain himself. You might want to talk to him or read his book.