[sustran] trans-israel highway

[Paul Barter]

This appeared in the alt-transp list and is highly relevent to the other
countries in Asia and the Pacific where many major toll roads are being
built and planned.

>From: litman at IslandNet.com (Todd Litman)
>Date: Wed, 13 Aug 1997 08:33:50 -0700 (PDT)
>Subject: Trans-Israel Highway Study
>
>Israel, like many developing countries, is experiencing rapid motorization.
>To help "solve" the resulting congestion problems, the government there
>recently approved a plan to build a massive (up to 12 lanes) highway through
>the country. Proponents claim that it will be self-supporting through tolls
>and still provide benefits many times higher than its costs, but a recent
>study challenges many of the assumptions used to evaluate it.
>
>Some of you may be interested in this because it is an excellent critique of
>standard highway benefit assessment, and the effects of motorization in
>developing countries. The report is: Yaakov Garb, THE TRANS-ISRAEL HIGHWAY:
>DO WE KNOW ENOUGH TO PROCEED?, Floersheimer Institute for Policy Studies,
>Jerusalem, April 1997. It is available for $25 U.S. from the Floersheimer
>Institute, 9A Diskin Street, Jerusalem, 9/6440, Israel;
>floerins at actcom.co.il. It also raises an important issue about toll roads
>that I plan to describe in a separate posting.
>
>Below is a list of some of the distortions in the original highway
>assessment, each of which tends to skew the results toward overstating the
>project benefits:
>
>1. The project is justified on the assumption that Israel will reach per
>capita automobile ownership saturation rates similar to large North American
>and European countries. But the authors point out that because Israel is a
>small, urbanized country (most people live in a few cities), a better
>measure is automobile density, the number of vehicles per square kilometer.
>This indicates a much lower level of vehicle ownership that the study assumes.
>
>2. The project contradicts national transportation and land use goals and
>criteria, which emphasize alternative travel modes, and preservation of land
>for agriculture. The report author state, "the Trans-Israel Highway was
>proposed, planned, advanced, and evaluated mostly as a road project, rather
>than a transport solution, and emerged from bodies responsible for
>roadbuilding, rather than from those with more comprehensive regional and
>national planning considerations."
>
>3. The projects original cost-benefit analysis ignored virtually all
>environmental and social costs, including air pollution, accident injuries,
>severance and community disruption, traffic noise, visual intrusion, and
>loss of recreational, cultural and heritage amenities.
>
>4. The project's original benefit-cost analysis used a 4% discount rate, an
>extremely low value which overvalues long-term benefits. 8-10% is considered
>more conservative (cautious) for assessing long-term benefits. The 4%
>discount rate results in estimated benefits worth 2-1/2 times that of an 8%
>discount rate, and 5 times higher than a 10% discount rate.
>
>5. Project benefit-cost analysis ignored the effects of generated traffic.
>This significantly overvalues the net benefits of highway capacity
>expansion, but assuming that traffic congestion will really decline (it
>won't), that the additional travel has the same value as current travel (the
>generated traffic consists of trips that consumers are most willing to
>forego due to congestion, but will take if the road is uncongested), and
>ignores the incremental external costs of the additional trips). This report
>gives an excellent summary of recent research on generated traffic.
>
>6. Project traffic demand modeling was based on no toll, but the project is
>intended to be tolled. It also assumed that petroleum prices will not
>increase in real terms over the next 30 years. This essentially asks, "How
>many seats do we need to provide in a restaurant if meals are all free," and
>then being surprised if the seats are not filled when you charge the same as
>other restaurants. This omission will overstate demand, and therefore net
>benefits.
>
>7. The cost of land that will be used for the highway was calculated based
>on its restricted use (agriculture), although its market price would be 10x
>or more higher. Since Israel is land-poor, the true value of that land
>(i.e., the replacement cost of the agricultural land) is this higher market
>price.
>
>8. The highway project was presented to decision makers without any
>alternatives. Even if the projects benefits exceed the costs, alternatives
>(such as smaller highway improvements plus rail and bus transit
>improvements) may provide more benefits.
>
>
>The Floersheimer report argues that these omissions and distortions in the
>analysis have greatly overstated the net benefits of the project, and that
>this project (and the lack of support for travel alternatives) creates a
>self-fulfilling prophesy of increased motorization and automobile
>dependency. In fact, I suspect that this is intentional as a result of the
>fact that the highway is intended to be self-supporting through tolls.
>Increased automobile dependency is therefore necessary in order to help
>guarantee cost recovery for this individual project. This is an important
>issue, so I'll discuss it in a separate posting.
>
>
>Sincerely,
>
>Todd Litman, Director
>Victoria Transport Policy Institute
>"Efficiency - Equity - Clarity"
>1250 Rudlin Street
>Victoria, BC, V8V 3R7, Canada
>Phone & Fax: (250) 360-1560
>E-mail:     litman at islandnet.com
>Website:    http://www.islandnet.com/~litman