The Costs and Benefits of Induced Traffic on the Sydney Harbour Tunnel and Gore Hill Freeway

Abstract

Statistical analyses have been performed on the effect of the opening of the Sydney Harbour Tunnel (SHT) and Gore Hill Freeway (GHF) on public transport patronage and vehicular usage. The effect of toll increases has also been analysed. Statistically significant estimates have been obtained for the induced traffic and the effects of toll increases and these estimates have provided data for a calculation of consumer surplus gained from the provision of the SHT and GHF. The estimate for consumer surplus has been compared with measured gains calculated from actual changes in travel times, traffic volumes and vehicular speeds after the SHT and GHF opened, and the two measures of benefits were found to be consistent with each other. When external costs of the induced traffic are taken into account, it is found that the benefits gained by the SHT and GHF are outweighed by the external costs in combination with the maintenance and capital costs. It is found that the costs of loss of public transport patronage and congestion costs of induced traffic are significant and cannot be neglected in economic evaluations of future roadworks.