PPP Supporters Take Heart From Aust Study
September 18th, 2008
Supporters of a plan to use a Public Private Partnership (PPP) to build the $1.89bn Waterview motorway tunnels project in Auckland have seized on a new study into benefits from Sydney’s orbital network of toll roads to justify the move. Accountants Ernst & Young, a lead adviser to the New South Wales and Queensland Govts on PPPs for big transport projects, calculate $27.6bn in direct economic benefits from Sydney’s 110km orbital motorway system. built with tolls. The figure does not extend to “network” benefits from the system as a whole. Ernst and Young Australian partner, David Cochrane, predicts these will reach an annual $1.095bn by 2020 up from $730m last year, representing about 30% of the orbital’s overall economic worth.
Study Flawed. Council for Infrastructure Development CEO, Stephen Selwood welcomes the study but his enthusiasm for PPPs based on this data indicates he is only selecting the parts of the study which support his position and ignoring the others. Cochrane shot down the validity of his own argument by also saying the study did not determine whether the economic benefits would have been greater or fewer had the toll roads been publicly funded. Cochrane is being somewhat coy as it is obvious the calculated benefits would have accrued without tolls, as the benefits relate to the existence of the road, not how it was funded. In fact they could have been even higher if you take away the upfront cost of having to use the motorway in the first place.
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