J. M. Wright
| In the context of road construction a benefit-cost ratio (b/c ratio)
has been used to rank and compare various competing projects. Between 1988
and 1990, during the course of two Panel hearings, VicRoads manipulated
the b/c ratio to enhance their pro-freeway argument. In the 1987 Environmental
Effects Statement (EES) on the Eastern Freeway Extension from Doncaster
Road to Ringwood, VicRoads stated that benefits must exceed costs (ie the
b/c ratio must be greater than 1.0) to make a construction viable. They
then stated that the Extension had a b/c ratio of 1.0.
By 1988, at the Panel of Inquiry for the EES, Vic Roads had inflated the b/c ratio to 1.9. In 1990, at a later Review Panel hearing for the same construction, the b/c ratio had increased to 2.7. In dollar terms, the user benefit increased from $200 m. (1987) to $380 m. (1988) to $1190 m. (1990). The huge shift in the perceived benefit to the road user was partly achieved by manipulating the “discounted benefit”. Suffice to say, this economic indicator works in favour of the road user at the lowest end of a range commonly used in project analyses, which is why VicRoads expediently reduced the “discounted benefit” from 10 % to 4 % during the 1990 Panel hearing. At the same time VicRoads reduced the predicted maximum traffic flow (possibly to downplay the effect of air pollution in the vulnerable valley location). This makes it even more astounding that the user benefit (in $ terms) increased almost sixfold from the inception of the EES. The cost of “externalities”—the social and environmental costs not borne by those who use them—was barely acknowledged. Although it may be difficult to accurately quantify these costs, they should be acknowledged. The Victorian Transport Externalities Study (Environment Protection Authority, 1994) has made an attempt to do this. To use one example, the annual monetary value of cancer effects from toxic air emissions in Melbourne was estimated to reach $47.7 m. in 2005. If VicRoads expects to have any credibility in the community it should, at the very least, create the impression that it is following a Quality Assurance process. Quality Assurance requires that an analysis or proposal is “fit for the purpose” and “right the first time”. The obfuscation and evasion demonstrated by VicRoads has created the impression that Quality Assurance and community consultation have become the victims of expediency. It has been some ten years since the b/c ratio for the Mullum Mullum freeway extension was tested at a Panel hearing. The recent Scoresby Freeway Panel made critical comment about the b/c study undertaken by the proponent for that project. What is required now, before any extension of the Eastern Freeway, is a review of the b/c ratio. It remains to be seen if the options soon to be released for public comment include a sound evaluation of this important aspect. |